A Pensacola, Fla., woman has filed suit against a St. Clair County law firm, alleging she was forced to pay $100,000 after leassees stopped paying rent.
Tracy Bardin, a managing member of Lighthouse Chocolates, says she and her former spouse, Matt Howland, told Timothy J. Bates of the Bates Law Firm they were interested in selling their franchise and being released from their lease at St. Clair Square.
Later, Bates told Bardin he found financially sound and solvent buyers – Tom and Sandi Peters -- for their franchise who would assume the lease at St. Clair Square, according to the complaint filed April 9 in St. Clair County Circuit Court.
For providing the buyer, Bates told Bardin and Howland he would charge a fee of $5,000 when the sale was consummated, Bardin says.
At a meeting between Bardin and the Peters, Bates informed the two parties it would be a conflict of interest for him to represent both the buyer and seller in a transaction, but did not go into further detail.
"At no time did Defendant Bates explain the conflict inherent in arranging for and charging a fee for finding a buyer for Plaintiffs' franchise and assumption of Plaintiffs' lease and representing both the buyer and seller in this transaction, nor that it was a conflict that could not be waived because his representation of the seller, Plaintiffs and his representation of the buyers would be materially limited by Defendant Bates' personal interest in the completion of the sale and assignment, all in violation of Illinois Rule of Professional Conduct 1.7," the suit states.
Nevertheless, Bates went on to represent both Bardin, Howland and the Peters, according to the complaint.
On Oct. 10, 2006, Bardin and Howland paid Bates the $5,000 fee he had requested for finding a buyer, Bardin says.
However, on April 5, 2007, Bates told Bardin he could not negotiate her release from the lease at the St. Clair Square because of the financial position of the Peters. He also told her she would be unlikely to collect any money from the Peters because of their financial condition, a direct contradiction to what he promised before the sale, according to the complaint.
Bates renegotiated the lease so that Bardin and Howland could be out of St. Clair Square by Feb. 1, 2008.
However, on July 1, 2007, the Peters moved out of the square and stopped paying rent, the suit states.
St. Clair Square demanded more than $1.2 million from Bardin and Howland for full payment of the lease, Bardin says.
In the end, Bardin and Howland were required to pay $100,000 to settle the claim for lease payment by St. Clair Square.
Bardin is seeking a judgment is excess of $200,000, plus costs.
She is represented by George R. Ripplinger of Ripplinger and Zimmer in Belleville.
St. Clair County Circuit Court case number: 09-L-183.