LoHi lawsuit precedes design and contracting firm’s bankruptcy

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The apartments at 3327 Tejon St. in LoHi. (Justin Wingerter/BusinessDen)

A local design and contracting firm that is being sued for allegedly botching its work on an apartment building in LoHi has filed for bankruptcy.

Cline Design Group, of Littleton, was founded 25 years ago by owner Jeff Cline and has hundreds of projects under its belt across the metro area and in the mountains, it said.

The company filed for Chapter 11 bankruptcy on Dec. 8 because it has less than $500,000 in assets but owes as much as $1.1 million to banks, suppliers and governments.

Most of that debt is disputed, however. Cline Design doesn’t believe that it owes $800,000 for its work in Highlands and, in fact, claims it is the company that is owed money.

In August 2021, Cline Design was hired as the general contractor for a 13-unit apartment project at 3327 Tejon St. developed by Scott Riopelle, owner of Interstate Roofing in Denver. In a lawsuit filed Sept. 7, Riopelle lists dozens of mistakes that he says Cline Design made.

Months went by without work; there was no on-site management; flooring was installed too early and left unprotected; Cline used the wrong hardware, which had to be replaced; sprinklers were shoddily installed; drywall had to be torn out and nearly half the walls repainted; and Cline left a room unheated in winter, causing “a flood throughout the building,” Riopelle said.

The project was finished in mid-2023 rather than the start of 2023 as anticipated, costing Riopelle $200,000 in lost rent, he says. He also lost $100,000 fixing Cline’s mistakes and another $100,000 in interest on a construction loan, according to his lawsuit.

On Sept. 12, Cline Design countersued Riopelle. The homebuilder denied doing anything wrong, blamed the project’s flaws on Riopelle, claimed that it is still owed $101,000 for its work, and asked Judge Andrew Luxen to let it foreclose on the apartments and sell them.

A five-day trial in the case is scheduled for August 2024 in Denver District Court, though that will likely be canceled as a result of Cline Design’s bankruptcy.

In that Chapter 11 case, Cline Design lists Riopelle as a creditor who is owed $400,000 and lists his LLC for the Tejon Street property as another creditor owed $400,000, while making clear it disputes both claims. Cline Design also owes $125,000 to BMO Bank, $70,000 to the Internal Revenue Service and $60,000 to Red Line Heating in Arvada, among other debts.

Attorney Aaron Conrardy of Wadsworth Garber Warner Conrardy in Littleton represents Cline Design in the bankruptcy case. In the construction case, David Law and Noel Trujillo of Miller & Law, also in Littleton, represent Cline Design. They and Jeff Cline declined to comment.

Riopelle’s lawyer is Damian Stone, of Denver. He also declined to discuss the case.