Basement finishing company owner sues co-owner

Kelly Holleran Jun. 8, 2009, 5:10am

The owner of a basement finishing company is suing his co-owner, alleging the co-owner started a competing business and wrongly kept profits from the original company for himself.

Mike Otte and Pro Basement Finishers filed a lawsuit June 1 in St. Clair County Circuit Court against Larry Otte and Pro Basement.

Mike Otte says Larry Otte started Pro Basement, which is a company competing directly with Pro Basement Finishers. Both install basement finishing systems from Impressive Basement Systems.

"On information and belief, Larry Otte represented to Impressive Basement Systems that Defendant Pro Basement is affiliated with Pro Basement Finishers, Inc., and that Larry Otte has falsely obtained consent and/or misrepresented from Impressive Basement Systems to market, sell and install its products," the suit states.

To start his company, Larry Otte began using Pro Basement
Finishers's equipment and employees, leaving the company with no equipment or employees to perform its work, according to the complaint.

While conducting business for Pro Basement Finishers, Larry Otte would pocket the money rather than turning it over to the company, the complaint says. He took $133,000 from Pro Basement Finishers, according to the complaint. His pay, though, was supposed to equal only eight percent of sales, which would have been $95,000, the complaint says.

In addition, Mike Otte claims Larry Otte agreed to take a customer's boat in exchange for finishing the customer's basement. However, he failed to account for the boat to the company.

"Defendant Larry Otte has also converted 2 vehicles, a Pontiac Vibe and a Ford F150, which was either owned by the Plaintiff and/or Pro Basement Finishers, Inc., and that Defendant Larry Otte has used both of these vehicles in his new company, Pro Basement, Inc. while the Plaintiff continues to make the monthly loan payments and insurance payments on each of the vehicles," the complaint says.

Mike Otte is also suing for breach of contract, saying Larry Otte agreed to purchase Mike Otte's home and to pay the existing mortgage and real estate taxes on the house, but has failed to do so.

"In violation of the agreement, Defendant Larry Otte failed to make mortgage payments on the subject house for 30 months totaling $22,500.00, and continues to accrue at a rate of $750.00 per month, and caused more than $20,000.00 worth of damage as a consequence of his beginning to remodel the house, but not completing it," the suit states. "Furthermore, Defendant Larry Otte failed to pay real estate taxes upon the home for more than 2 years, and owes more than $5,400.00 in real estate taxes, which also continues to accrue."

In the three-count suit, Mike Otte and Pro Basement Finishers are seeking a judgment of more than $150,000, plus costs.

Matthew J. Marlen of Belleville will be representing them.

St. Clair County Circuit Court case number: 09-L-287.

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