VIP to consider eliminating transportation amid lawsuit

Wednesday, May 11, 2011

The $200,000 breach-of-contract lawsuit VIP Industries filed against the Cape County Board for Developmental Disabilities inched forward in court Tuesday, and VIP's chief executive said afterward that the company is already feeling the pinch of the lost income.

In fact, VIP's board of directors will consider the first cut at its meeting Monday night -- eliminating transportation to and from its sheltered workshop for the 150 or so disabled Cape Girardeau County residents who work there, said VIP CEO Hilary Schmittzehe.

"Transportation would be the thing to start with," Schmittzehe said of belt-tightening measures. "It's on the agenda, and the board members will take a look at it."

The board will go into closed session at 7 p.m. Monday to discuss the transportation issue, Schmittzehe said.

But the cuts could go deeper, he said, and the lack of funding could culminate with the closing of the sheltered workshop at 1330 Southern Expressway in Cape Girardeau.

Schmittzehe suggested finding a ride to work may be the least of clients' worries.

"In the long range, they may have to find another program," he said.

VIP filed a lawsuit Feb. 14 in Cape Girardeau Circuit Court seeking nearly $200,000 from the Cape County Board for Developmental Disabilities, an amount VIP claims it's owed for six months of insurance, maintenance and other costs related to operating one of the state's largest sheltered workshops. The lawsuit also says that amount will increase with every payment that is missed.

The lawsuit, which Judge William Syler transferred to Stoddard County during a change-of-venue hearing Tuesday, also says the board must resume making payments and will be in breach of contract until it does. The board responded in March with a motion to dismiss the suit.

The board, created by a 1969 law, collects about $870,000 annually in property taxes and spends it through its contracts with VIP. But the board stopped making those payments nearly a year ago, citing questions about the way VIP spends the money.

Cape Girardeau lawyer J. Michael Ponder represents the board in the suit and he said the next step is written discovery, which allows both sides to send questions to each other to determine facts about the case. Documents may also be requested, and Ponder said he will request VIP's financial information, calling it a "primary concern for us." He would not say what he was specifically looking for.

Once a judge is assigned to the case in Stoddard County, he said, he expects the motion to dismiss will be taken up.

"We believe that VIP has failed to state a claim because they allege we breached a contract that expired by its own terms," Ponder said.

But VIP doesn't see it that way, said its St. Louis lawyer, John E. Toma. He said the contract requires six months' notice before termination and that the contract is self-renewing without notice. He also said the board is obligated to renew the contract each year because of the results of a special election in 1975 that authorized the collection of the property tax to pay for the creation and maintenance of a sheltered workshop. VIP and the board, formerly known as the SB40 board, have had a contract since 1975.

The dispute started over a $60,000 kitchen renovation, which caused the board to want to renegotiate the contract, which VIP was unwilling to do.

Toma said he would provide Ponder with any information he is obligated to by law. But he said he had no way of knowing whether the issue would go to trial or be settled.

"It's too early to tell," he said. "But we think they are not in conformity with the enabling statute and more specifically the ballot language. That's why lawsuits happen. People disagree. Obviously, the other side disagrees."


Pertinent address:

1330 Southern Expressway, Cape Girardeau, MO

Map of pertinent addresses

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