Shelter Island owner wins $12 million judgment

 The owner of a $41 million home on Flathead Lake who wants his property taxes reduced won a $12 million judgment in Flathead County — by suing his own construction company.

Don Abbey began building his mansion on Shelter Island on Flathead Lake in 2001 with Brendon Retz of Whitefish. Abbey and Retz formed Timberland Construction, a development company that bought and developed land in the Flathead Valley. After two years in business together, Abbey and Retz got into a legal battle, with Retz accusing Abbey of trying to destroy the company when — according to court documents — Abbey would no longer provide financing. Abbey, through his company, Abbey Land LLC, filed a countersuit, accusing Retz of stealing from Timberland Construction LLC. Retz eventually filed for bankruptcy, but several of the debts that he incurred as manager of Timberland were not dismissed in bankruptcy proceedings, as the bankruptcy court said Retz commingled his own funds with the LLC, used company funds to buy a Harley-Davidson motorcycle, helicopter and hangar, and spent thousands of dollars on gambling.

In his legal battle with Abbey — his former partner — Retz had sought a restraining order against Abbey to have him stop communicating with local banks about Retz’ management of Timberland Construction LLC. Retz claimed Abbey told Whitefish Credit Union and Glacier Bank to refrain from further cash advances to Timberland. At one point in this high-stakes drama, Retz took out a $500,000 line of credit at American Bank in Whitefish, then immediately withdrew it for his own use, Abbey’s counter lawsuit against Retz alleges.

Abbey and Retz had initially worked together on the Shelter Island home, a luxury mansion and outbuildings that is listed for sale for $59.5 million.

Retz and Abbey started having difficulties as partners in about 2002. When Retz told Abbey that the project was going to run $4 million over budget Abbey put in another $2 million and arranged for another $2 million line of credit at American Bank in Whitefish, court filings show. Abbey began to have suspicions that Retz was mismanaging their development company, court records show. Retz maintained that he was managing Timberland Construction LLC in the manner set forth in their operating agreement, but Abbey claimed Retz was not authorized to make the kind of large loans he was taking out in order to run the company, court documents say.

When Abbey claimed that Retz may have been using Timberland’s and Abbey’s resources for personal gain, things got ugly between the two men in about June 2003.

The men eventually parted ways. After Retz’s and Abbey’s construction and development business ceased to exist, court documents show that Abbey Land LLC formed Glacier Construction Partners in 2006, to continue building the Shelter Island project.

Glacier Construction Partners oversaw construction of Abbey’s Shelter Island home and boathouse, and the construction business hired Interstate Mechanical Inc. to install a specialized water and septic system.

In his lawsuit Abbey claims that the home’s water system overloaded the septic system and contaminated the water well with e-coli bacteria. Abbey sued 16 defendants over what he called improper engineering and placement of the septic and water system. The defendants were Glacier Construction Partners, Interstate Mechanical, WGM Group, Glacier Precast Concrete, Rowland Environmental Consulting, Jeffrey Glazier and Kelvin Stinger, both doing business as Glazier Drilling, Dawson Glazier dba Davis Pipe and Machinery, MEP Consulting, Davis Pipe and Machinery, Siemens Industry, Siemens Corporation, Timberland Construction LLC, Stephen Tygart and Roger Lemons.

Glacier Construction Partners was originally listed as a plaintiff in the case, but was subsequently moved to a defendant. Abbey was awarded a $12 million judgment last year.

 The case is on appeal to the Montana Supreme Court and remains open.

The home and boathouse were finished in 2011 and Abbey has it listed for sale for $59.5 million, which also includes most of a wooded island near Rollins.

According to court documents, accountant Paul Pederson says the damages due to Abbey Land LLC came from four areas: direct costs; future costs; loss of property and loss of use of Shelter Island.

Pederson says, in California District Court filings, direct costs on the Shelter Island project were over $1.5 million; future cost damages of the water system are approximately $406,000; loss of property damages resulting from construction defects are $3.7 million; and loss of use of Shelter Island, including “reasonable rental value,” is over $9.875 million, for a grand total of damages over the construction project totaling $15.5 million.

Pederson based his loss-of-use damages partly on the Shelter Island property renting for over $300,000 a month, including interest, from October 2009 to March 2012.

U.S. District Court documents show that the costs incurred by Abbey Land LLC on the Shelter Island project were $47.9 million, including:

Land         $1.76 million

Docks         $776,289

Main house         $33.1 million

Boat House         $4.4 million

Power/generator building         $439,000

Management costs         $274,000

Abbey Land LLC has left a trail of court cases in Flathead County district court and Lake County district court. In 2002, Abbey Land LLC sued its architectural firm, Oz Architects, over their handling of the Shelter Island project.

Abbey Land LLC claimed Oz Architects were paid $600,000 but their work was “grossly inadequate” and the firm was “utterly failing” in its responsibility to Abbey and caused $5 million in cost overruns on the Shelter Island project.

That suit was later dismissed.

Former Montana Supreme Court Justice Terry Trieweiler, who is now a Whitefish attorney, once represented Abbey — but now has filed lawsuits against his former client.

After the landmark $12 million judgment was reached, Abbey Land LLC fired Trieweiler in an e-mail, according to Trieweiler’s court case.

Trieweiler has filed an attorney lien in Lake County against Abbey for not paying $175,000 in attorney’s fees, and $32,000 in attorney’s costs.

Trieweiler filed an attorney lien against Abbey Land in Flathead County on April 11, 2013, in the amount of $231,747.

Trieweiler’s Lake County court case says Abbey Land LLC reneged on its contract, which would have given Trieweiler a 30 percent share of money or property recovered in the suit against Glacier Construction Partners et al.

The $12 million judgment is one of the largest in Flathead County history.

Insurance companies that insured the defendants in the $12 million case are now in on the action. Charter Oak Fire Insurance is listed as a plaintiff against Interstate Mechanical — the firm that designed Abbey’s water system — in a U.S. District Court case in California.