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Judge dismisses part of developer's lawsuit; Skretny calls racketeering claims ‘plausible,' moves rest of NRP's case against city forward

A federal judge gave Mayor Byron W. Brown a partial victory Thursday in his legal battle over allegations of a pay-to-play scheme at City Hall.

The judge allowed the civil suit by a Cleveland housing developer to continue but dismissed many of its claims, most notably breach of contract.

In ruling both for and against the city, which was seeking to dismiss the suit, U.S. District Judge William M. Skretny found enough legal reasons for the case to stay alive.

Chief among them are the racketeering allegations by NRP Corp., which Skretny said he found "plausible." Both sides claimed they were pleased with the ruling, although the city's attorney called it a major win.

"It's rare to achieve a dismissal of 60 percent of a case before you even step into a courtroom," said Terrence M. Connors, a lawyer for Brown and the city. "And we're just as confident about the remaining 40 percent."

Skretny's ruling is the latest development in a lawsuit that accused Brown of conspiring with others to scuttle a $12 million housing project on the city's East Side.

The suit by NRP alleges that Brown killed the deal because of the developer's refusal to give an $80,000 service contract to the Rev. Richard A. Stenhouse, a key political supporter.

In his ruling Thursday, Skretny said NRP's racketeering claim should continue.
"We're very pleased that part of the case will proceed," said Thomas S. Lane of Webster Szanyi, a lawyer for NRP. "I've always said that's a very important part of the case."

Lane is quick to suggest that the most important aspect of the judge's ruling was his decision to keep the suit active and moving toward a trial.

With that, he said, will come a discovery phase that could lead to more evidence.

"NRP is certainly overall very pleased with the decision," said Lane. "The decision demonstrates that this case is about more than a single breach of contract claim."

Connors insists just the opposite is true and suggested the breach of contract claim is vital to NRP's case.

He referred to Skretny's decision to dismiss the claim because it "is based on a letter that can not plausibly be deemed a contract."

"That was the cornerstone of their original complaint," Connors said.

The judge dismissed several other legal claims by NRP but otherwise let the suit continue.

The case has its roots in a housing project that was supposed to result in 50 rental homes in the Masten and Cold Spring neighborhoods.

In early 2009, the project stalled when Brown refused to transfer to NRP the land the city had set aside for the development. The mayor also declined to give NRP the funding that previously had been approved by the city.

At the time, Brown said he was uncomfortable with the project, in part because of a requirement that the rental housing not be sold for 15 to 30 years.

NRP's suit is based on the contention that Brown and Stenhouse orchestrated a pay-to-play scheme that ultimately killed the project.

A settlement has since removed Stenhouse from the NRP suit.