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Welk Resorts, builder tangled in court cases

Longtime business relationship ends with $6 million legal battle

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After more than a decade of building timeshare resort complexes together, Welk Resort Group Inc. had a falling out with a general contractor, and the two now face each other in court.

According to the filings in three related lawsuits, many design changes, delays and increased costs put a strain on contracts signed in 2015 between Quality Structures of Arkansas LLC and Timber Ridge Escapes LLC – a subsidiary of  California-based Welk Resorts – to construct two four-story buildings at the Branson resort. One of those buildings was destroyed by fire during construction in December 2016, and the other was halted near its completion following an argument over money, according to Gary Shaver, owner of the 27-year-old Quality Structures.

“I had a 12-year relationship with them where they always paid their bills,” Shaver said. “And now, all of the sudden, they are delinquent.”

After being fired from the project in February, Quality Structures filed suit June 6 against Timber Ridge in an attempt to retrieve $725,000 worth of equipment that was left on the job site. Six days later, Timber Ridge countersued claiming breach of contract over that same faltering project, and in turn, Quality Structures last month registered another suit, this one for unpaid labor and supplies.

Jon Fredricks, CEO of Welk Resorts, declined to comment on his company’s lawsuit filed in U.S. District Court for the Western District of Missouri Southern Division. But the suit alleges Timber Ridge officials repeatedly expressed concerns about Quality Structures’ safety, workmanship and staffing levels, as well as what it called unsupported multimillion-dollar price increases on the projects.

Shaver said the delays and $1.2 million in increased costs were associated with changes Timber Ridge made to the plans and 40,000 cubic yards of rock that unexpectedly had to be removed from the site before construction.

Attorney Richard Ashe, who represents the construction company, said the contract allowed Quality Structures to rebid the project as plans changed. The suit filed in Taney County Circuit Court asks for $6.2 million to cover labor and supplies.

“More than a million of that is owed to material suppliers and contractors – all of whom really are put in a financial bind,” he said.

The suit alleges after Shaver complained in February about the lack of payments, Timber Ridge officials fired his team and seized their equipment. Timber Ridge’s lawsuit acknowledges this fact, but states it was allowed under the contract.

“We got into it about them not paying their bills,” Shaver said. “So they had us leave the job. But we were getting ready to leave it at the time.”

Timber Ridge officials instructed Quality Structures’ workers to leave all equipment on the site, Shaver said, or deal with a call to the police. Shaver heeded the warning and left without his excavators, lifts and other tools. Through the June 6 lawsuit and mediation, about 90 percent of the property was eventually recovered, he said.

“But when we went to retrieve it, they would only pick pieces and parts. Even though the mediation said ‘equipment,’ they would only let us have it if it had a battery or tires – which was their interpretation of ‘equipment’ I guess,” Shaver said.

Branson Fire Chief Ted Martin said no cause was determined after the Missouri Division of Fire Safety investigated the blaze. Shaver said the condo that was 45 days from being finished when he was fired was never completed.

Quality Structures has worked in the Branson area since the early 1990s, including jobs for Bluegreen Vacations’ The Falls Village, Holiday Hills Resort & Golf Club, and Top of the Rock restaurant and museum renovations. Shaver currently is building a 10,000-square-foot addition to a Big Cedar Lodge sales building.

Shaver said this is his company’s first lawsuit over payment.

Welk Resorts also is in court with a timeshare exit service for allegedly persuading timeshare owners to cancel payments to Welk, while claiming there would be no legal or financial consequences.

Welk attorneys filed the suit July 25 against Lynwood, Washington-based Reed Hein & Associates LLC, dba Timeshare Exit Team, in federal district court in Southern California.

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