YOUNGSTOWN — Developer Dominic Marchionda and two of his companies named in Youngstown’s $834,608 civil lawsuit against them asked the judge to dismiss the case while ex-city Finance Director David Bozanich, the other defendant, called the claims “frivolous and time-barred.”

Meanwhile, the city’s legal counsel didn’t oppose a request from the attorney for Marchionda and his two companies to withdraw from the case because of an alleged conflict of interest and asked for the city to have more time to file motions while it looks for new representation.

The city’s lawsuit contends Bozanich, Marchionda, U.S. Campus Suites LLC and Erie Terminal Place LLC participated in a “calculated scheme” to defraud Youngstown of $834,608.

Attorneys for Marchionda and his two companies as well as for Bozanich responded that the lawsuit should be dismissed because it’s past the statute of limitations and barred by a previous plea bargain agreement, among other issues.

Gregg Rossi, the attorney for Marchionda and the two companies, asked visiting Judge W. Wyatt McKay, who is hearing the case, to grant summary judgment in favor of his clients that would dismiss the lawsuit without a trial “to promote judicial economy and terminate this litigation to avoid a formal trial where there is nothing to try.”

In a Feb. 11 motion similar to a Jan. 2 answer and counterclaim, Rossi wrote that summary judgment should be granted because a plea agreement with his clients prohibits the city’s lawsuit. He also wrote the city first became aware of the one issue it raised in the lawsuit in a state audit issued Dec. 20, 2012, and the other in a Dec. 19, 2013, audit — and chose to do nothing about it for years and thus exceeding the statute of limitations. The city contends it has not gone past the statute of limitations on the matter.

The city filed the lawsuit Nov. 21 against Marchionda, the two companies and Bozanich for their involvement in a public corruption case. Marchionda, Bozanich and U.S. Campus Suites all pleaded guilty to felonies after taking deals on Aug. 7, 2020. Charges against Erie Terminal Place were dismissed as part of the deal.

The plea agreement signed the day the deals were taken, Rossi wrote, prohibits “any governmental body seeking restitution in any form or amount from” Marchionda related to the case.

He added: “The terms of this agreement are clear and unambiguous and, therefore, enforceable.”

In his Tuesday answer to this lawsuit, Bozanich’s attorney Timothy Cunning wrote: “For a number of reasons, the city should never have filed this case. After all, the city’s claims are wholly frivolous, as they are based on decades-old transactions that were approved by the Youngstown City Council and the city’s board of control.”

Cunning wrote: “The city has suffered no economic harm or loss as a result of Mr. Bozanich’s actions and the city should not be wasting taxpayer dollars pursuing what it knows to be frivolous and time-barred claims.”

Cunning listed 19 defenses for Bozanich in the Tuesday answer, including the city’s claims are barred “by the due process clauses of the Ohio and United States Constitutions,” “the separation of powers doctrines,” “the Home Rule Amendment,” “the statute of limitations,” “the plea agreement,” as well as the city not suffering any harm or damages and lacking standing in the case.

The Tuesday filing was Bozanich’s first response to the lawsuit.

CITY’S ATTORNEYS WITHDRAW

Rossi filed a Jan. 2 motion asking McKay to disqualify attorneys with the Roetzel & Andress law firm, which were representing the city in this lawsuit. Roetzel & Andress acquired the law firm of Brouse McDonald with two partners from the latter firm — Timothy Reardon and Ed Smith — employed in 2022 as Marchionda’s personal attorneys and corporate attorneys for the two companies.

The attorneys, Rossi wrote in that motion, obtained confidential information regarding the finances of Marchionda and the companies.

In a Tuesday filing, Benjamin Chojnacki of Roetzel & Andress didn’t oppose the motion and the law firm is helping the city to hire other attorneys in its place.

“Given the complicated nature of this case, substitute counsel will need time to be engaged, familiarize him / herself with the case, and file the requisite pleadings, motions and brief in response to defendants’ pending counterclaim and motion for summary judgment. These activities take time,” Chojnacki wrote.

Chojnacki asked McKay to give the city a second extension until March 31 to respond to the counterclaim and until April 28 to respond to the summary judgment request.

“Plaintiff believes it can retain substitute counsel who will be able to move, plead or otherwise respond to defendants’ counterclaim on or before March 31,” Chojnacki wrote.

THE CASE

The city’s lawsuit accuses Bozanich, Marchionda and the companies of defrauding Youngstown out of $834,608.

Marchionda, Bozanich and U.S. Campus Suites LLC all pleaded guilty to felonies after taking plea deals on Aug. 7, 2020.

Bozanich pleaded guilty to one count each of bribery and tampering with records, both felonies, and two misdemeanor counts of unlawful compensation of a public official. Bozanich spent nearly a year in a state prison for his crimes.

Marchionda pleaded guilty to four felony counts of tampering with records, all occurring on Oct. 6, 2011, admitting he used false invoices to get money from the city for his Erie Terminal Place downtown-housing project to pay bills he owed for the Flats at Wick.

U.S. Campus Suites LLC pleaded guilty to a felony count of receiving stolen property for illegally obtaining money from the city.

The city received $100,000 from Hartford Fire Insurance Co., Bozanich’s bonding company when he was finance director, as partial payment of the $614,608 it is seeking specifically related to funding given at Bozanich’s behest to Marchionda to develop the Flats at Wick.

The $100,000 from Hartford would be deducted from the amount the city is seeking though the company filed a motion to intervene in this case on Jan. 17 seeking to get that money from Bozanich.

Bozanich’s tampering with records conviction was for him giving $1.2 million from the city’s water and wastewater funds, divided evenly, to Marchionda if he gave $1 million of it to the city’s general fund in December 2009 to buy the property for a Madison Avenue fire station, which was subsequently closed. That transaction allowed Bozanich to balance the city’s general fund that year.

The lawsuit states the fire station purchase “was a calculated scheme, facilitated by U.S. Campus Suites and orchestrated by Dominic Marchionda and David Bozanich to illegally transfer money from the city’s water fund and wastewater fund to the city’s general fund in violation of” state law.

Marchionda, who wasn’t convicted in the scheme, got to keep the extra $200,000 from the city grant.

The city also paid $3,220 in closing costs.

The appraised value of the fire station at the time was $411,388, according to the lawsuit.

As for the $200,000 from the original $1.2 million grant, Rossi wrote in his Jan. 2 filing that more than that amount was used for water and wastewater work related to the student-housing project.

The fire station, Rossi wrote in a Jan. 2 answer and counterclaim, was deemed as surplus property by the city “with no value and no use” so the monetary recovery claim “is unfounded.”

If U.S. Campus Suites LLC is liable for the value of the fire station, Rossi wrote the fair market value is zero with the county auditor valuing it at $46,000 for property tax purposes.

If it’s determined that the lawsuit is not barred by the statute of limitation, Rossi wrote U.S. Campus Suites LLC seeks the $1 million “in grant money improperly received by the city of Youngstown as a result of the transaction.”

The lawsuit seeks a total of $614,608 from the two men and two companies: $411,388 for the fire station purchase, $3,220 for the closing costs, $100,000 from the wastewater grant and $100,000 from the water grant.

The city is also seeking $220,000 from Marchionda and Erie Terminal Place LLC — $110,000 each for water and wastewater grants given to that project that Marchionda pleaded guilty to creating false invoices.

INDICTMENT

Bozanich, Marchionda and 10 of Marchionda’s companies — as well as former Youngstown Mayor Charles Sammarone — were indicted Aug. 30, 2018, on 101 criminal counts that accused them of engaging in a pattern of corrupt activity and dozens of other felonies. As part of the plea bargain, most of the charges were dismissed.

A 2021 “public interest report” by the state auditor’s office of the city’s finances between 2009 and 2015 listed the $834,608 in findings for recovery against Bozanich, Marchionda and the two companies.

Finance director from Nov. 15, 1993, to Dec. 31, 2017, Bozanich “had the power to recommend the issuance of city grant funds from the city’s water fund and wastewater fund for city economic development projects,” according to Youngstown’s lawsuit.

In addition to the $834,608, the city is seeking costs and interest on the money, and for Bozanich to “forfeit and disgorge any and all compensation he received from the city during the relevant time period pursuant to the faithless servant doctrine in an amount to be determined at trial.”