Niles says he didn’t know of case

Published 9:45 am Tuesday, March 12, 2013

One of the owners of former Medford-based contractor Niles-Wiese Construction Co. Inc. said Monday he will fight a $3.8 million judgment issued last week in favor of Eagle’s Rest developer Scott LaFavre.

Dan Niles said he plans to request Freeborn County District Court Judge Steve Schwab vacate the default judgment because the claims are false and he did not have a chance to defend himself.

“I had never seen anything about this until it was in the paper,” Niles said.

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The Tribune published a story Friday that described the court ruling in LaFavre’s favor. Niles and other owners didn’t show up in court to defend themselves. However, on Monday, Niles told the Tribune that he never received a summons or any sort of communication from Freeborn County District Court.

His company, Niles-Wiese Construction, has been closed for three years. It was hired almost six years ago to transform the former century-old 18-hole Albert Lea Golf Club into the Eagle’s Rest housing development. The development ultimately foreclosed and a portion of the property remains for sale.

LaFavre, in the lawsuit, alleged Niles made false and defamatory statements against him that directly affected the sale of lots in the development and led to the foreclosure of the property.

He also claimed that Niles and the other owners of Niles-Wiese Construction diverted part of the $726,000 he paid that was supposed to have been held to pay the subcontractors. When subcontractor Rud Excavating did not receive its payment, it placed a mechanic’s lien on the property and ceased to do further work.

Schwab stated in the ruling that Niles-Wiese failed to complete the work on the property as outlined in the contract, and as a result LaFavre was entitled to consequential damages, or damages that would have been realized had the contract been completed.

The judge also ruled in favor of LaFavre for $50,000 for defamation by Niles.

Schwab was the Albert Lea city attorney at the time of the golf course’s purchase in May 2006. He became a judge in 2008.

According to the ruling, Niles made statements that Eagle’s Rest was not paying the construction company sufficient funds to pay the subcontractors. LaFavre argued the statements injured his reputation and the reputation of the development.

Schwab wrote in the ruling that the owners did not file an answer to LaFavre’s claims though they were reportedly served with notification of the filings.

Court documents state Niles and owner Joseph White were reportedly served with a summons to the claims through legal publication in the Tribune on three days in August of 2012, after unsuccessful attempts to reach them by mail. Niles, who resides in Owatonna, said he did not see the publication.

Owner Gary Wiese signed a notice in June 2012 that he received the summons by U.S. mail, according to the court ruling. It states a notification also was sent to Niles-Wiese Construction by mail and signed by Laurie Schultz at the company’s Medford address in June 2012.

Niles said the company disbanded about three years ago and said he no longer has contact with Wiese and White.

Asked about his view of Niles’ intentions to fight the default judgment, LaFavre said, “He’s a little late, and the court order speaks for itself.”

LaFavre, who grew up in Albert Lea but now lives in Bloomington, purchased the golf course for $1.07 million in May 2006 from its Des Moines-based owners.