NORRISTOWN – A planning, engineering and architecture firm has denied allegations made by Cheltenham Township that it overbilled the municipality by hundreds of thousands of dollars in a Montgomery County court.
Cheltenham Township initially filed suit in the Montgomery County Court of Common Pleas on Sept. 20, 2021 versus Boucher & James, Inc. Consulting Engineers and Judith Stem Goldstein of Doylestown, David R. Jones of Pennlyn, Mark Eisold of Hartsville and Ross Boucher of Venice, Fla.
“Defendant Boucher & James was a family-owned business from 1962 through 2012 that specialized in land planning, civil engineering, landscape architecture, surveying, and building code compliance. Many of its clients were Pennsylvania municipalities but the company also provided services to individuals, developers, institutions and private corporations as well as out-of-state municipalities like the City of Millville, New Jersey,” the suit said.
“In 2012, Boucher & James’ lone proprietor, defendant Boucher, sold his interest in the company to its employees by way of an Employee Stock Ownership Plan. By way of background, an ESOP is an employee benefits plan that provides a company's employees an opportunity to buy company stock, thereby permitting them to obtain an ownership interest in the company. By the time the company transitioned to the ESOP, it employed approximately 50 employees in a variety of roles including accounting.”
Cheltenham Township continued that from 2012 through 2020, the Board of Directors, which included Boucher until 2018, controlled the company and met once a year. Four Managing Directors controlled the company’s day-to-day operations after the ESOP was created in 2012: Defendant Eisold, defendant Jones, defendant Stem Goldstein and Jon S. Tresslar.
“From 2011 through 2018, the Township contracted with Boucher & James for various engineering and landscape architectural projects on and/or involving Township property. In and around December 2012, the Township contracted with the Company for services not to exceed $12,154 for the months of November and December 2012 and further contracted with the company for services not to exceed $12,549 for the months of January and February 2013. Said contract between the company and the Township was executed and returned to defendant Boucher on Jan. 8, 2013,” the suit stated.
“Between 2012 and 2018, Boucher & James routinely billed the Township for work it claimed to have completed by sending invoices detailing the allegedly completed work as contracted between the parties. Between 2012 and 2018, the Township routinely paid the invoices sent by Boucher & James for work it claimed to have completed. In that time span, the Township paid Boucher & James with taxpayer funds collected by the Township on behalf of the residents of Cheltenham Township and which had been earmarked for Township needs.”
The suit added that Boucher & James overbilled over 150 clients for services by an estimated $2,083,377 and inflated its invoices to its clients, including the Township, between 10 percent and 25 percent.
Additionally, between 2012 and 2018, the Township paid Boucher & James $5,463,398.64 for services rendered – and of the $5,463,398.64 paid by the Township to Boucher & James, $3,877,748.19 was paid based on “a substantial number of invoices later determined to contain discrepancies and/or irregularities.”
“Between 2012 and 2018, Boucher & James overbilled the Township by at least $62,572.10, according to the Pennsylvania Office of the Attorney General. Based on the Pennsylvania Office of the Attorney General’s inflation percentage range of 10 percent to 25 percent as applied to the Township’s total amount for invoices paid, the Township overpaid Boucher & James by an amount ranging from $546,339.86 to $1,365,849.66,” the suit said.
“Based on the $3,877,748.19 reflected in invoices with discrepancies and/or irregularities as applied to the range presented by the Pennsylvania Office of the Attorney General, the Township overpaid Boucher & James by an amount between $387,774.82 and $969,437.05.”
The defendants removed the case to the U.S. District Court for the Eastern District of Pennsylvania on Oct. 20.
“This basis for plaintiff’s complaint are various allegations regarding alleged over-billing for work completed by defendants for plaintiff, and includes a civil claim under RICO 18 U.S.C.A. Section 1962(c), along with claims for conversion, common law fraud, unjust enrichment, breach of contract, intentional misrepresentation, negligent misrepresentation and civil conspiracy against all defendants, additional claims for negligence & negligence per se just against defendant Marc Eisold, defendant David Jones & defendant Judy Goldstein, and lastly a claim for vicarious liability just against defendant B&J,” the removal notice stated.
“By this notice of removal, B&J does not waive any objections or defenses that it may have as to service of process, jurisdiction, or venue, or any other defenses or objections that it may have to this action. B&J intends no admissions of fact, law, or liability by this notice of removal, and expressly reserves all objections, defenses and motions.”
After Goldstein filed a motion to remand the case to the Montgomery County Court of Common Pleas on Oct. 25, on the grounds that B&J removed the case without obtaining her permission and that of the other co-defendants, U.S. District Court for the Eastern District of Pennsylvania Judge Karen S. Marston granted the motion on Nov. 9.
“Upon consideration of defendant Judith Stern Goldstein’s motion to remand and no opposition having been filed by the removing party, defendant Boucher & James, Inc., it is hereby ordered that plaintiff’s motion is granted, and this matter is remanded to the Montgomery County Court of Common Pleas,” Marston said.
UPDATE
Boucher & James filed an answer along with new matter in the case on Feb. 3, along with a counterclaim for restitution against Cheltenham Township and cross-claims against their co-defendants.
“Plaintiff’s claims against B&J are barred, in whole or in part, by waiver, estoppel, plaintiff’s own acts and/or omissions and/or the omissions of third-parties presently not named, plaintiff’s unclean hands, laches, release and failure to mitigate damages,” the defendant’s answer stated, in part.
“B&J performed all of its obligations and any valid claim by plaintiff was due to the fraudulent, negligent and/or criminal acts of the managing directors named as co-defendants. B&J has a pending breach of contract action against Cheltenham Township in the Montgomery County Court of Common Pleas, alleging failure by Cheltenham to pay for services provided. B&J hereby incorporates its averments set forth against Cheltenham as an affirmative defense to the above-captioned matter. B&J reserves its right to raise such additional defenses that become known to it during discovery.”
For counts of procedural and substantive due process violations of the Fourteenth Amendment to the U.S. Constitution and 42 U.S.C. Section 1983 and negligence, the plaintiff is seeking, jointly and severally, compensatory and punitive damages.
The plaintiff is represented by Mark F. Himsworth of Hamburg Rubin Mullin Maxwell & Lupin, in Lansdale.
The defendants are represented by Kimberly A. Bonner of JSDC Law Offices in Hershey, Frank S. Nofer of Brehm Nofer & McCarter in Conshohocken, Mark Cedrone of Cedrone & Mancano in Philadelphia, Andrew L. Riemenschneider in North Wales and Ross Boucher in Venice, Fla.
Montgomery County Court of Common Pleas case 2021-11363
U.S. District Court for the Eastern District of Pennsylvania case 2:21-cv-04241
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com