Image courtesy of Khalsa Design
The developer of a delayed West Roxbury apartment complex claims that its general contractor engaged in “rampant misconduct” by withholding over $2.2 million in payments to subcontractors.
A realty trust affiliated with developer DivcoWest claims that Boston-based Rise Construction Management responded to its request for project documents by loading them into a dumpster and having them carted away on April 14.
“Defendants disposed of and removed these project records, documents and materials that owner requires to complete the project, which was scheduled to be substantially complete as of April 22, rather than return them to owner,” attorneys from Boston-based Mintz wrote on behalf of DivcoWest.
The civil complaint filed April 19 in Suffolk Superior Court alleges breach of contract, violations of the Consumer Protection statute Chapter 93A, fraud and negligent misrepresentation. DivcoWest attorneys are seeking an injunction preventing Rise Construction Management from destroying project records as attorneys attempt to assess and collect damages. A hearing is scheduled for Wednesday afternoon on a request to place attachments on Rise Construction Management founder James Grossmann’s properties in Dorchester and Bourne equal to the disputed payments.
The dispute centers on The Ellery, an 85,000-square-foot apartment complex that broke ground in early 2023 at 199 Gardner St. in West Roxbury. The project was approved by the Boston Planning & Development Agency in 2019.
DW RT Ellery acquired the site for $7 million in June 2022, according to a Suffolk County deed, and signed a contract with Rise Construction Management in August 2022. The project was scheduled for completion on April 22, according to the lawsuit.
Attorneys from Boston-based Mintz, which represents DivcoWest, allege that Rise billed ownership for work and failed to pay subcontractors, falsely certified that it had paid subcontractors for work performed, and failed to furnish sufficient labor and equipment to meet the construction schedule.
The lawsuit seeks an audit of Rise’s financial records as authorized by the August 2022 contract, and an injunction on bank accounts held by Rise and Grossmann, a former executive for construction manager Suffolk before founding Rise in 2019.
Construction fell behind schedule in late 2023 and Rise missed a deadline to complete the weather-tight building facade before winter, the lawsuit states. Developers issued a failure to perform notice in January 2024 and issued a notice of termination for the contract on March 29.
After the termination notice, Rise’s audit consultant requested project records and documents stored in a field office at the West Roxbury site. On April 10, Rise had project records including building permit cards with inspectors’ approvals placed in a dumpster and removed from the property, DivcoWest claims.
The lawsuit also claims that Rise failed to notify DivcoWest in a timely fashion of its defaults on other projects, as required by the contract. It cites alleged defaults on projects at 143 Washington St. in Brighton and 23 Upton St. in Boston, which resulted in lawsuits also filed in Suffolk Superior Court.
DivcoWest has paid over $10.1 million for subcontractor work, of which approximately $7.9 million has been passed along to the subcontractors, the lawsuit states.
Rise declined to comment. The case has been assigned to Suffolk Superior Court’s business litigation session, with a hearing on the real estate attachment request scheduled for Wednesday at 2 p.m.
