Hopkinton Secures $900,000 Settlement

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The Town of Hopkinton is pleased to announce that it has secured a $900,000 settlement in a long-standing dispute with the developer of the Hearthstone subdivision off Ash Street.

“This settlement is a tremendous victory for Hopkinton. It shows that the Town takes enforcement of its ordinances and regulations seriously,” said RJ Dourney, Chair of the Board of Selectmen.

On March 24, 2007, after a jury trial, the Middlesex Superior Court entered judgment in favor of the Town of Hopkinton and against Gilford Construction, Inc. in the amount of $749,942.71. The Town’s claims had arisen from Gilford’s failure to complete and repair the Hearthstone subdivision. Gilford appealed, and on March 26, 2009 the Massachusetts Appeals Court affirmed the judgment. On May 28, 2009, the Superior Court entered an amended judgment, awarding the Town post-judgment interest in the amount of $194,288.23, for a total award of $966,129.53.

Gilford failed to pay the judgment. The Town then conducted post-judgment discovery and determined that a viable claim could be made against Gilford’s president and others on a “piercing the corporate veil” theory, whereby the officers of a corporation may be held liable for the corporation’s debts.

On November 4, 2009, the Town filed suit against Gilford's president and others, asserting that the defendants were liable for Gilford’s debt. The Town secured comprehensive pre-judgment security, including attachments on the defendants' properties and an order restricting the defendants from transferring their assets except to pay for bona fide personal living expenses.

The Town subsequently discovered bank records suggesting the defendants had violated the Court's order concerning pre-judgment security. The Town, therefore, filed a complaint for civil contempt. A contempt trial was held on August 6, 2010, and the issue was taken under advisement by the Court. While the contempt action was pending the parties settled for $900,000.

Under the terms of the settlement agreement, the defendants must make an upfront payment of $240,000, with $200,000 to be paid on or before June 30, 2011, $200,000 paid on or before September 30, 2011, and $260,000 paid on or before December 31, 2011. To secure the payments, the Town maintains attachments on the defendants’ properties. Additionally, the parties have filed an agreement for judgment in the amount of $1,250,000, which will be enforced in the event of a breach of the settlement agreement.

The Town of Hopkinton was represented by Kurt B. Fliegauf, a partner at Conn Kavanaugh Rosenthal Peisch & Ford, LLP in Boston. Mr. Fliegauf is a resident of the Town.

Norman Khumalo
Town Manager