Defendant Gateway Rail Services files answer to second amended complaint

Christina Stueve Jun. 14, 2012, 12:00pm



Defendant Gateway Rail Services answered the second amended complaint June 13, in a lawsuit filed against the company, stating the plaintiff failed to state a cause of action against Gateway.

Gateway Rail Services is a defendant in a lawsuit filed by the owners of a railroad museum in California who claim they lost hundreds of thousands of dollars after multiple entities conspired against them to deprive them of lawsuit money.

Feather River Rail Society filed a lawsuit Sept. 13 in Madison County Circuit Court against Gateway Rail Services, Mid-America Rail Services, Illinois Transit Assembly Corp., Leslie M. Kasten, Mark Greve, Phillip Sheridan, John Gigante, Benjamin Butterworth, Roger J. Verbeeren Jr., Frank Dziama, Clyde Hentz and Robert Jackson.

In its complaint, Feather River Rail claims it filed a lawsuit in 2000 against Illinois Transit Assembly Corp. and Kasten, alleging breach of contract, conversion and fraud.

The plaintiff's claims against Gateway are barred, according to the answer to the second amended complaint. Gateway bought assets from Illinois Transit Assembly Corp. or Leslie Kasten, paying a fair market value for the assets, exceeding the debt owed from Illinois Transit Assembly Corp. and Kasten to the plaintiff. Gateway defendants acquired assets unfettered by the plaintiff's claims, according to the answer to the second amended complaint.

The plaintiff did not have a final non-appealable judgment in its lawsuit against Illinois Transit Assembly Corp. when Gateway defendants bought assets from those parties, according to the second amended complaint.

Gateway defendants reserve the right to amend the affirmative defenses upon subsequent investigation and discovery, according to the second amended complaint.

On June 19, 2003, Madison County Circuit Court entered a judgment in favor of Feather River Rail Society by ordering ITAC and Kasten to pay $825,284 in damages, according to court records.

ITAC and Kasten lost every attempt to appeal the judgment, the suit states. Since then, ITAC and Kasten avoided paying judgment money to Feather River Rail Society, the complaint says.

"All defendants stood to gain financially if a judgment in favor of Feather River could not be collected from ITAC or Kasten," the complaint says.

Feather River Rail Society wants to see the court invalidate ITAC and Kasten's transfer of property to Gateway. The society also seeks damages of $241,334 interest at 9 percent per annum, punitive damages of $750,000, plus attorneys' fees and other relief.

Richard E. Boyle and Michael C. Hermann of Boyle Brasher in Belleville represent the plaintiff.

Jeffrey Schmitt of Danna McKitrick in St. Louis represents Gateway Rail Services and Mid-America Rail Services.

Madison County Circuit Judge Clarence Harrison is assigned to the case.

Madison County Circuit Court case number: 11-L-919.

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Danna McKitrick
7701 Forsyth Boulevard
St. Louis, MO 63105

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