Land developer Will Perry has filed suit against Sugar Land Mayor David Wallace and two other former business partners, saying they’re trying to collect on a fraudulent real estate commission contract.
Wallace and Bajjali allegedly conspired with Tanner to create a fraudulent contract showing that W.C. Perry Brokerage Service Group LLC, general partner of Perry Properties, owes Tanner for real estate commissions on 38 properties, the lawsuit says.
Perry’s attorney, Derrick Carson, said the total commission being sought through the contract is in six figures.
“I have not been served,” Bajjali said of the suit. “I’ve heard rumors about it.”
“I’m not at liberty to comment on it since I haven’t seen it,” Tanner said, adding, “it’s preposterous.”
Wallace could not be reached for comment Friday afternoon.
The suit states that on Oct. 6, Wallace sent Perry Properties’ attorney “a proposed brokerage fee sharing agreement” between Tanner and Perry Brokerage Services. The agreement was signed by Tanner, but not dated, and referred to an “Exhibit A” that wasn’t included with the contract.
Then on Dec. 1, 2006, according to the suit, Tanner sent an email demanding that Perry pay a commission based on the fee-sharing agreement, which was attached to the email.
However, the suit states, the emailed version of the contract had been changed and included a date of July 1, 2006, along with Wallace and Bajjali’s signatures, “claiming to sign on behalf of Perry Brokerage.” The new version of the contract also included the formerly missing “Exhibit A,” which contained a list of 38 properties for which Tanner said he was owed a commission.
Tanner sent the email from Wallace Bajjali Development Partners LP, Wallace and Bajjali’s new business venture, the suit states.
Perry states in the lawsuit that he was never consulted about the agreement and never agreed to its terms.
“Perry Properties responded to Tanner’s demand and copied Wallace and Bajjali on that correspondence allowing them an opportunity to disavow the apparently fraudulent conduct,” the suit states. “They did not. Moreover, they have authorized Tanner to use the resources of their company to attempt to perpetrate this fraud upon Perry and his companies.”
The suit accuses Wallace and Bajjali of fraud, conspiracy and breach of fiduciary duty. It accuses Tanner of fraud, conspiracy and “aiding and abetting breach of fiduciary duty.” Perry seeks a jury trial, a declaration that the real estate commission agreement is fraudulent, and damages and attorney fees.
According to court documents, Perry and his former partners began negotiating a settlement, and on Jan. 10 Perry filed a notice of nonsuit without prejudice, saying he no longer wished to pursue the suit. But then, Perry “learned that defendants were no longer willing to settle.”
So two days later, Perry filed a motion seeking to reinstate the suit “so that plaintiffs may proceed on its clams against defendants or, in the alternative, negotiate a final settlement with defendants. Fort Bend County 400th District Judge Clifford Vacek signed the motion on Jan. 12.
Carson said Perry “obviously would have preferred to negotiate a resolution” rather than file suit, but negotiations didn’t work out.
Wallace and Bajjali had issued a press release in December that hinted at a less-than-amicable parting of the ways with Perry.
Saying they’d sold their two-thirds interest in Perry Properties to “remaining one-third partner” Perry, the two added that they “were formerly responsible for all of the development and investment activities of Perry Properties until their ownership interests were acquired today for an undisclosed amount of cash.”
Announcing creation of Wallace Bajjali Development Partners, the two men said “a number of the development and investment personnel from Perry Properties have joined their firm and they intend to continue their investment and development activities with their new $25 million investment fund.”
Perry’s lawsuit could conceivably have political implications. His father is local homebuilder Bob Perry, one of the nation’s top contributors to Republican candidates and causes. Wallace made a run last year for former congressman Tom DeLay’s seat in Congressional District 22, and is widely rumored to be interested in running for the seat again in 2008. It’s unclear whether the legal flap would affect Wallace’s plans, but it appears the suit could cost him any potential support from the Perry family.
The relationship between Perry and Wallace made waves two years ago, when an entity called Cherokee Sugar Land LP announced it was negotiating with Imperial Sugar Co. to buy the refinery property as part of a major residential/commercial development. At the time, the partnership included general partner Verturo Sugar Land LP, Cherokee Investment Partners LP of Raleigh, N.C. and W.C. Perry Land Development.
That February 2005 announcement drew notice at Sugar Land City Hall when it was revealed that Mayor Wallace had begun a business relationship with Perry and had moved his offices into Perry’s building.
In March 2005, Sugar Land City Manager Allen Bogard asked that the City Council in effect create a firewall – in the form of a development oversight committee – between Wallace and negotiations over development of the Imperial property and adjoining land.
To further persuade the public that there would be no impropriety between the tasks of serving as mayor and officing with a partner seeking assistance from the city in a real estate project, Wallace was asked by Bogard and the City Council to issue a public statement assuring he would have no involvement in the real estate project.
Nine months later, in a surprise move in December 2005, Cherokee Investment Partners and W. C. Perry Land Development announced they’d ended their partnership – and Perry was no longer associated with the Imperial Sugar redevelopment.
