Sugar Land Mayor David Wallace has filed a counterclaim against a former business associate, accusing Will Perry of defamation and breach of contract.
Wallace filed the countersuit along with his business partner, Costa Bajjali, as part of their response to a lawsuit Perry filed against them in January. In that suit, Perry accused the two and a third man, R.D. Tanner, of trying to collect on a fraudulent real estate commission contract.
In their response, filed in Fort Bend County’s 400th District Court, Wallace and Basjjali say Perry was aware of and approved details of the commission contract with Tanner, told Tanner he would be paid under the contract’s terms but later disavowed all knowledge of the agreement.
The response also says Perry has told people he filed the suit against the Sugar Land mayor with the intent of keeping Wallace “out of politics forever.”
Wallace called Perry’s suit “a frivolous case,” and said his response “will speak for itself.” Perry didn’t immediately return a call seeking comment on Friday. His attorney, Derrick Carson, withheld comment because he hadn’t yet seen the resonse filing.
In addition to denying allegations in the lawsuit, that response provides a window on the inner workings of W.C. Perry Properties L.P. and related businesses, and on the break-up between Perry, Wallace and Bajjali, who each had been one-third owners in the partnership.
Before Wallace and Bajjali joined W.C. Perry Properties, the partnership and an associated corporation by the same name, both being managed by Perry, were insolvent, according to Wallace and Bajjali’s response. Perry Properties had a negative net worth of $84,000 and an operating loss of more than $125,000 for the year ended Dec. 31, 2004, the response states.
Then Bajjali joined Perry, followed by Wallace in January of 2005. According to the response document, Bajjali became responsible for real estate development, Perry was responsible for third-party real estate brokerage operations, and Wallace was in charge of real estate acquisitions and investments.
Within 18 months, “Wallace and Bajjali transformed Perry Properties into a profitable company,” with a net worth of more than $650,000 and a cash balance of more than $900,000 by June 30, 2006, the filing states.
“Yet during the same 18 months, the third-party brokerage revenues generated as a result of Perry’s activities continued to flounder,” Wallace and Bajjali’s response document states. “Perry’s contribution to Perry Properties was far less than the amount of cash he removed from Perry Properties to pay his salary and expenses” at the time.
Once Perry Properties became profitable, Wallace and Bajjali allege in their filing, Perry decided he wanted to “trigger a buy-sell provision he had” with his two former partners.
But Perry caused “turmoil” and that disrupted productivity to such an extent at the firm that terms of the trigger provision couldn’t be immediately met. According to the filing, Perry denied Bajjali and other employees access to the company computer server, brought in an outside firm to “scan for suspected electronic listening devices or ‘bugs’ in the office,” and hired security guards “to ‘protect’ Perry.”
Wallace and Bajjali said in their filing that because of the “turmoil,” they offered Perry “a separation term sheet, by which the company would be divided along divisional lines.”
But after weeks of failed negotiations over terms of the separation agreement, Perry “triggered the buy-sell provision” and Wallace and Bajjali accepted his buy-out offer. In connection with that offer, “Perry expressly agreed not to make disparaging or other negative remarks concerning Wallace or Bajjali,” the response documents says. According to a press release, the three men parted ways in September of 2006.
One of several employees who left Perry Properties along with Wallace and Bajjali was Tanner. The response document says Tanner struck an agreement in June 2006 “by which Tanner would receive commissions on the sales of properties that he had worked on while at Perry Properties.” The filing says Perry stated both verbally and in writing that he understood the agreement and would pay Tanner.
“Incredibly, after Wallace, Bajjali and Tanner left Perry Properties, Perry disavowed all knowledge of the agreement with Tanner,” Wallace and Bajjali’s filing states, “thereby forcing Tanner to file a claim.
“To excuse his wrongful behavior and to punish Wallace and Bajjali for impeding his efforts to avoid paying Tanner, Perry alleges Wallace and Bajjali fraudulently agreed to pay Tanner on behalf of Perry Properties,” the filing by Wallace and Bajjali states.
Wallace and Bajjali also say in their filing that Perry filed the fraud suit against them in an attempt to damage the Sugar Land mayor – considered a likely future candidate for Congress – politically.
“Upon information and belief, Perry has told various people he knows his lawsuit is without merit, but believes Wallace will be damaged politically if his name is linked to newspaper headlines alleging fraud,” Wallace and Bajjali’s response filing states. “Perry also has told various individuals his goal is to keep Wallace out of politics forever.”
(Ironically, Wallace had made a $15,000 pledge and, until recently, retained the right to introduce the keynote speaker at Saturday’s GOP fund-raiser, the Lincoln Reagan Day Dinner. But Perry’s father, Houston homebuilder Bob Perry, made a $20,000 contribution to the event, and was given the right by the Fort Bend County Republican Party to pick someone else to introduce the speaker.)
“In addition to his slanderous conduct, Perry has sent numerous emails and other written communications falsely accusing both Wallace and Bajjali of criminal action and informing people that the Fort Bend sheriff and district attorney are going to arrest Wallace and Bajjali for such conduct,’ the response filing states.
Despite the counterclaims of defamation and breach of conduct, and despite serving notice they intend to seek exemplary damages, Wallace and Bajjali say in the filing they will drop all claims against Perry if he withdraws his suit against them permanently, “contacts all individuals and entities he has discussed this frivolous lawsuit with and retracts his false allegations,” and sends the two men a written apology.
Wallace filed the countersuit along with his business partner, Costa Bajjali, as part of their response to a lawsuit Perry filed against them in January. In that suit, Perry accused the two and a third man, R.D. Tanner, of trying to collect on a fraudulent real estate commission contract.
In their response, filed in Fort Bend County’s 400th District Court, Wallace and Basjjali say Perry was aware of and approved details of the commission contract with Tanner, told Tanner he would be paid under the contract’s terms but later disavowed all knowledge of the agreement.
The response also says Perry has told people he filed the suit against the Sugar Land mayor with the intent of keeping Wallace “out of politics forever.”
