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Durango business owners hit by predatory lawsuits

Sixteen federal complaints filed by single plaintiff in ruse that’s become old hat to attorneys
Bill Hermesman stands in the handicap parking spot he recently installed in front of his business, North Point Furnishings at North Point Mall, after being served a lawsuit he said felt like a shakedown for $10,000. (Jerry McBride/Durango Herald)

Business and property owners across Durango were hit with a rash of lawsuits in mid-October that have left them scrambling to protect themselves against what they characterize as a shakedown for $10,000.

At least 16 establishments were served with lawsuits because they lacked a handicap parking spot, which is a violation of the Americans with Disabilities Act. Steven Daniel Felix, address unknown, is the plaintiff listed on the lawsuits. His attorney is a Texas-based lawyer, and former wrestling promoter Richard Bruce Tharpe. Self-identified “testers” for compliance like Felix are freelance operators that do not represent the government.

These ADA Title III federal lawsuits are no anomaly. The same thing happened in Durango in 2016 with a different plaintiff with a different attorney citing different ADA violations. A quick internet search reveals some simple facts. The lawsuits are a plague across the country that all follow the same pattern.

The pattern goes something like this: 1) Lawsuits are filed against business owners threatening thousands if not hundreds of thousands of dollars in federal fines for ADA violations. 2) The vast majority of business owners address violations immediately. 3) The plaintiffs’ lawyer agrees to drop the lawsuit for a cash payoff.

The Americans with Disabilities Act enacted by Congress in 1990 prohibits discrimination against people with disabilities in several areas, including employment, transportation, public accommodations, communications and access to state and local government programs and services.

Organizations and businesses can be fined up to $75,000 for a single ADA violation, and $150,000 for additional violations. Fines that large can shut down a business – as would be the case with Clark Kelman who owns North Main Laundry and Town Plaza Laundry in Durango.

Kelman was served for not having handicap parking in front of Town Plaza Laundry. The lawsuit threatens a federal fine in the neighborhood of $100,000, he said. Kelman had no idea he was supposed to have handicap parking out front, but he hired a contractor, purchased the necessary signage, and had one completed within days.

“I contacted the lawyer Tharpe and told him sorry and that I had fixed it and he responded that was fine but he refused to drop it,” Kelman said. “Now he wants me to settle out of court for $10,000.”

The Durango Herald was able to contact seven of the 16 businesses served, and all reported the exact same thing. All were taken by surprise by the lawsuits. All were told they faced a fine in the neighborhood of $100,000. All had handicap parking spots installed immediately. And all were told by Tharpe that he would drop the lawsuits if they paid him $10,000.

Six of them hired lawyers. Kelman contacted a Denver-based firm that quoted him nearly $10,000 just for representation. And the firm said he would still likely have to pay $5,000 to Tharpe. Kelman decided to try to negotiate with Tharpe on his own.

“So yeah, I have since tried to negotiate the amount down,” he said. “And I offered to donate to the local VFW because the guy who filed the suit, Steven Felix, claims in the lawsuit that he is a disabled war veteran. And I offered to donate to the Southwest Center for Independence here in Durango. But Tharpe said no.”

Longmont lawyer Courtenay Patterson, who practices labor and employment law, including ADA Title III cases, has seen this all before. She is representing two of the Durango businesses that were served.

“I’ve done probably 35 of these lawsuits and I’ve done it in multiple states including Colorado,” she said. “I’ve represented clients in Pennsylvania, Washington and Arizona. And I’ve dealt with Tharpe before when he sued businesses in the Denver area.”

The $100,000 in fines Kelman and others mention from the lawsuits is to scare them into settling, she said. The penalties if found guilty in federal court are real enough, but lawyers like Tharpe who are behind these lawsuits are entitled to nothing more than attorney’s fees and costs.

“That is why they file these suits,” Patterson said. “It’s basically just a scam to try and extort attorney fees and costs out of businesses. And they throw out these numbers like $75,000 and $100,000 to scare people.”

In cases in which the defendants have brought their business or property into ADA compliance, what happens is the attorney reports to the court that the work is done, which makes the case “moot,” meaning the court does not have jurisdiction, and the case goes away, Patterson said.

“In (Kelman’s) case, the attorney is just trying to scare the guy. I will not let my clients pay the other side money,” she said. “With these unrepresented businesses that’s what they are going to try to do, just strong-arm them into some sort of settlement.”

But she said the cases are hard to navigate for those unfamiliar with the law and the federal court system. Defendants cannot represent themselves if they are a business in Colorado, that’s just the law, Patterson said. Or in federal court if they are an LLC or a corporation.

“So that’s the other problem,” Patterson said. “These businesses get backed into a corner where they don’t want to have to hire an attorney and so they just pay this guy because it will be cheaper to pay $10,000 than to pay for an attorney.”

But for those who do hire an attorney it’s pretty straightforward.

“The attorney provides the necessary information and it’s dismissed,” Patterson said. “And if not, it’s: ‘Fine. Don’t dismiss. I’ll take it to motions and I’m going to come after you for fees and costs.’ So they don’t want to have to deal with an attorney.”

Durango business owner Jay Bruton was served his lawsuit while he was raking leaves on Saturday. He owns the property where Animas Glass is located. He was pretty stunned to get served, he said. He supports doing everything possible to make things handicap accessible, thinks it should be that way. He had the handicap parking spot taken care of immediately.

“But I will guarantee you, they are not going to get 10 grand out of me,” he said. “I’d rather pay my attorney who is working on my behalf and deprive this other attorney for what he thinks is his just reward.”

Bruton also had questions about Felix, the plaintiff listed on all the lawsuits.

“It would be very interesting to hear from him because as far as I can tell and from some other people who have been sued, they have cameras and they don’t think this guy ever got out of his car,” Bruton said. “They just drive by and take pictures. They never went into the business. They have never purchased anything. It’s just such a bogus deal. It’s so frustrating.”

Durango business owner Bill Hermesman, who had a couple of properties that were served lawsuits, also wonders about Felix, saying the lawsuits claim how much pain and suffering the businesses have caused him by not having handicap parking.

“I was like Jesus, give me a break,” Hermesman said. “We put in the parking spots and now he just wants the $10,000. For what? For what?”

All of the people the Herald spoke with who were served lawsuits support ADA requirements but all say the law should require businesses be given a warning with time to comply before being faced with lawsuits. As it stands now, the loophole for predatory lawsuits is big enough to drive a convoy of semi-trucks filled with “ambulance chasing” lawyers through, Hermesman said.

“It gets tabled in Congress all the time,” Patterson said. “Apparently, our country has bigger issues to deal with. Fixing it was actually proposed by Rep. Ted Poe out of Texas back in 2017 or maybe ’18 and I was going to testify before Congress but the whole thing got tabled.”

Calls to attorney Richard Bruce Tharpe were not returned. And the Herald was unable locate Felix or to confirm his military record before Thursday afternoon.

gjaros@durangoherald.com



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