A battle over payments involving a failed Wright Township development and two former local figures linked to the Luzerne County juvenile justice scandal is playing out in a Florida court.
The Powell Law Group, a firm established by disgraced attorney Robert Powell, filed a suit in Palm Beach County in June against former Luzerne County judge Michael T. Conahan and his wife, Barbara, trying to force them to pay a portion of past loans on the Mountain Top development, court records show.
Barbara Conahan has argued the signature on the loan guarantee is not hers, and both she and her husband allege Powell failed to disclose information he had received indicating the proposed development was “not financially viable and not likely to be successful,” court records show.
Powell and the Conahans are all in Florida now.
Powell has lived in a Palm Beach Gardens mansion since serving an 18-month prison sentence for failing to report a $2.8 million kickback scheme involving Conahan and former Luzerne County judge Mark Ciavarella and two juvenile detention centers Powell had co-owned, court records show.
The two former judges are serving federal prison sentences — 28 years for Ciavarella and 17.5 years for Conahan. Conahan is at the Federal Correctional Center in Coleman.
Barbara Conahan, who was not implicated in the corruption probe, resides in Palm Beach County.
Powell cannot practice law because he was disbarred, but he is still listed as president of Powell Law Group, which is now housed in a nondescript suite at a Hazle Township office complex.
The 37-acre Wright Township development along Church Road, named The Sanctuary, is owned by W-Cat Inc., a company set up by Powell and Jill Moran, a former Luzerne County prothonotary and partner with Powell at his law firm. Moran is listed as the only officer of W-Cat in state corporation records, and she is still listed as secretary of the Powell Law Group in state corporation records.
Work on the development stopped several years ago, with only one single family home and three two-unit townhomes built. The windowless shell of a fifth residential structure continues to deteriorate at the center of the development. W-Cat has racked up $24,560 in delinquent real estate taxes for 2014, county records show.
The pending suit focuses on the repayment of $4.62 million in loans W-Cat owed to Dunmore-based First National Community Bank, which had filed an action to recoup the money in 2011.
According to Palm Beach County court records:
The Powell Law Group, P.C., repaid the debt in May 2014 but argues Barbara and Michael Conahan should provide reimbursement for a share because they also had guaranteed the loans.
The action seeks damages over $15,000 but doesn’t spell out exactly what Powell Law Group wants the Conahans to pay, saying “the amount is confidential pursuant to the terms of the settlement agreement but will be disclosed pursuant to a confidentiality agreement.”
The filing, which was prepared by Attorney Keith D. Skorewicz in Tampa, Florida, also seeks attorney fees and costs.
The Conahans filed a motion to dismiss, which was denied in October.
They said Barbara Conahan did not sign the loan guarantee, and the signature she maintains was not hers was not notarized on the guarantee document. The purported witness was a Powell Law Group employee.
Any loan guarantees should be voided, they said, arguing that Powell Law Group and Robert J. Powell both misrepresented the viability of the project by failing to disclose warnings about the project allegedly made to Powell by a local real estate professional.
“This was never disclosed to any of the purported ‘loan guarantors.’ To the contrary, Powell only described the real estate project in glowing, positive terms, representing the project was assured to be successful and profitable,” said their action, filed by Miami attorney Leonard A. Sands.
The Conahans also said they never received stock or evidence of any interest in the real estate venture.
They also sought to move the trial to Pennsylvania, arguing the action involved a property located about 1,200 miles away from south Florida.
The Powell Law Group’s response: “The Conahans’ arguments are preposterous and are seemingly only intended to cause delay.”
Barbara Conahan also raised counterclaims that Powell and Moran have treated the development project “as if it were exclusively their own” and should return or credit $1.2 million that Michael Conahan lent the Powell Law Group, Powell and Moran for the W-Cat project.
The Palm Beach County civil court office said Thursday that no trial has been scheduled by presiding Judge Catherine M. Brunson.
Skorewicz said he won’t comment on pending litigation.
Michael Conahan filed paperwork indicating he is now representing himself.
Sands, who is still representing Barbara Conahan, could not be reached for comment.
Moran, who could not be reached for comment, was never charged in the corruption probe. She resigned from the prothonotary seat in March 2009 as part of an agreement with federal prosecutors.
It’s unclear how the Powell Law Group came up with millions of dollars to pay off the First National Community Bank loans in May 2014.
A UCC filing with the state indicates The Powell Law Group borrowed an undisclosed amount of money through Fortress Credit Corp. in New York City that month.
Another UCC filing indicates more borrowing by the Powell firm in May 2015 through Fox, Swibel, Levin & Carroll, LLP, in Chicago.
The Powell Law Group is in the process of collecting legal fees in a massive environmental case involving the former Kerr-McGee Corp., which manufactured railroad ties in Avoca from 1956 to 1996. Powell Law has brought in New York City firm Weitz & Luxenberg, P.C., to handle this litigation, although the Powell firm is still acting as co-counsel, according to court paperwork filed in October.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.