FORT WORTH, Texas — This article was originally published by our content partners at the Dallas Business Journal. You can read the original article here.
Contractors who allege they weren't paid by the former owner of Fort Worth's tallest tower are starting to win lawsuits to recover some of that money, but the wider legal dispute between Pinnacle Bank and Opal Holdings rolls on.
For months, contractors who have completed work on Burnett Plaza have pursued lawsuits to receive money they alleged wasn't paid by its former owner, Burnett Cherry Street LLC, which is tied to New York-based Opal.
Pinnacle Bank wrestled back control of the building from Burnett Cherry Street LLC by foreclosing in May on one of the loans for the building. But recent legal maneuvers have cast a fresh spotlight on the conflict between a contractor, Burnett Cherry Street and Pinnacle, which now has the keys the building.
In recent months, judges have sided with contractors that filed suits against Burnett Cherry Street in attempt to recover money owed for work on the 40-story building at 801 Cherry St.
On July 2, Tarrant County 236th District Court Judge Tom Lowe ruled in favor of contractor Larry Short & Associates LLC for $240,436.20, plus attorney fees and court costs. Another ruling by a Tarrant County judge on June 26 went in favor of Hopwood RE LLC for $271,777 plus attorney and court fees after Burnett Cherry Street "wholly failed to answer or otherwise appear within the time allowed by law." A Tarrant County judge also ruled in favor of JLL against Burnett Cherry Street for $399,553.80.
But one significant lawsuit is still ongoing. At the heart of legal arguments is whether to place the blame on Pinnacle Bank or Opal Holdings for nonpayment of $1 million to contractor Tarrant Construction Services.
Opal and related entities allege Pinnacle Bank has tried to push the building into default. Pinnacle argues that another entity tied to a ground lease for the tower, Burnett Plaza Holdings LLC, is affiliated with Burnett Cherry Street and that Opal founder Shaya Prager has engaged in a "string-along fraud" by misrepresenting the relationship between the companies.
In legal filings, Pinnacle claimed it has nothing to do with the suit with Tarrant Construction Services and requested the judge separate that matter into a separate case.
"The [Tarrant Construction Services-Burnett Cherry Street] vendor dispute and the [Burnett Cherry Street-Pinnacle] lending dispute do not belong in the same case," the filing stated. "An impecunious entity’s failure to pay a vendor does not justify or require joinder of separate claims by and against its lender."
However, lawyers representing Tarrant Construction Services at Barlow Garsek & Simon LLC opposed the request to sever the lawsuit into two different disputes. If Pinnacle blocked Burnett Cherry Street from accessing a reserve account to pay for the service on the building, the lawyers wrote, "then Pinnacle Bank should remain a party in this proceeding at least until those issues are investigated through discovery and in the absence of any new claims against Pinnacle Bank."
Tarrant County Judge Melody Wilson on Aug. 12 denied Pinnacle's request without prejudice, meaning Pinnacle's lawyers could bring up the request again in the future.
A court hearing is scheduled for Feb. 10, 2025.
