Suit filed over bungled auction

Robert Smith rsmith@pawhuskajournalcapital.com
The Kennedy Building on Kihekah Avenue is the subject of a lawsuit against the county Board of Commissioners. Robert Smith/Journal-Capital

A California man who owns several real estate parcels in the Pawhuska area filed suit Friday in Osage County District Court against the county Board of Commissioners, alleging breach of contract and possible conspiracy in regard to a property deal.

Jay Mitchell filed suit against the commissioners in regard to his attempt to purchase the downtown Pawhuska structure known as the Kennedy Building. The commissioners auctioned the building in August 2017, and Mitchell submitted the high bid — $232,000.

In September, a member of the Board of Commissioners told the Journal-Capital that the sale had been voided due to an error by the board. District 3 Commissioner Darren McKinney told the newspaper that the board failed to officially declare the building “surplus” property before putting it up for sale.

“It was no one else’s fault other than the county commissioners, and it would have happened regardless of who it was that bought the building. This is not a reflection on Mr. Mitchell at all,” McKinney told the Journal-Capital last September.

Mitchell’s lawsuit alleges that: “On information and belief, other unnamed parties conspired with (the) defendants (the commissioners) to interfere with the closing of the real estate transaction that is the subject of this dispute.”

Mitchell’s complaint adds that records of the Board of Commissioners indicate that “public discussions occurred regarding the plaintiff’s intended use of the building and whether the board or any other governmental authority could impose restrictions upon said use.”

The complaint also cites an Oct. 3, 2017, resolution by the Pawhuska City Council to “direct” the Board of Commissioners to set new “guidelines on the sale and usage of the Kennedy Building.”

According to Mitchell’s lawsuit, the commissioners refused to act in good faith and says the plaintiff has suffered damages in excess of $75,000.

The suit asks the court to grant quiet title to the Kennedy Building to Mitchell, to require the defendants to compensate Mitchell for damages suffered and to cover his attorney fees and costs.

District Attorney Rex Duncan, speaking on behalf of the Board of Commissioners, said it isn’t clear that Mitchell and his attorneys have complied with legal requirements that come into play when suing a county government.

“There is a set procedure that must be followed before filing a lawsuit against the county,” Duncan said, “and I don’t believe that this individual, who resides in another state, fulfilled those procedures before filing suit.”

Mitchell’s complaint represents that he has attempted to submit the disagreement to mediation, but adds that the county commissioners “wholly have refused.”

Mitchell is represented by Bransford Shoemake, of Pawhuska. Shoemake said in an interview that he disagrees with the view articulated by Duncan.

Shoemake said Tuesday that breach of contract doesn’t fall within the scope of the requirement for compliance with tort claim provisions of law.

“It’s a specific exception to that,” Shoemake said. Mitchell’s complaint alleges that he entered into a real estate contract with the county based on the Kennedy Building auction and that Mitchell kept his part of the bargain by promptly putting up $11,600 of earnest money.

“Plaintiff is ready, willing and able to close on the sale accepting the Kennedy Building as is, both in condition and title,” Mitchell’s complaint says.

Shoemake said he doesn’t think the lawsuit is very complex.

“I think the petition speaks for itself,” he said.