Gramercy Group's Lawsuit in Hawaii

Case 1:16-cv-00114-JAO-RT Document 15 Filed 05/27/16 Page 1 of 31 PageID #: 62
Of Counsel:
BAYS LUNG ROSE & HOLMA
HARVEY J. LUNG 2991-0

Attorney at Law
A Law Corporation
GRANT FASI ALLISON 10368-0
Topa Financial Center
700 Bishop Street, Suite 900
Honolulu, HI 96813
Telephone: (808) 523-9000
Facsimile: (808) 533-4184
E-mail: hlung@legalhawaii.com
gallison@legalhawaii.com
Attorneys for Plaintiff

GRAMERCY GROUP, INC.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
GRAMERCY GROUP, INC., ) CIVIL NO. 16-00114-JMS-KSC

)
Plaintiff, ) PLAINTIFF GRAMERCY GROUP,
vs. ) INC.’S FIRST AMENDED
) COMPLAINT; SUMMONS
D.A. BUILDERS, LLC a/k/a D.A. )
BUILDERS; DAVID A. ALCOS III; )
JOHN DOES 1-20, JANE DOES 1-10, )
DOE CORPORATIONS 1-10, DOE )
PARTNERSHIPS 1-10, and OTHER )
ENTITIES 1-10 )
)
Defendants. )
)
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PLAINTIFF GRAMERCY GROUP, INC.’S

FIRST AMENDED COMPLAINT
Plaintiff GRAMERCY GROUP, INC. (sometimes referred to as
“Plaintiff” or “Gramercy”), by and through their attorneys, Bays Lung Rose &
Holma, asserts the following Complaint against Defendants D.A. BUILDERS,
LLC a/k/a D.A. BUILDERS (“DA”), DAVID A. ALCOS III (“David Alcos”), and
JOHN DOES 1-10, JANE DOES 1-10, DOE CORPORATIONS 1-10, DOE
PARTNERSHIPS 1-10, and OTHER ENTITIES 1-10 (“Defendants Does”):
PARTIES
1. Plaintiff Gramercy is and was at all times relevant herein a
corporation formed under the laws of the State of New York. Gramercy has its
headquarters and its principal place of business in the State of New York.
2. Upon information and belief, Defendant DA is and was, at all
times relevant herein, a limited liability corporation formed under the laws of the
State of Hawaii, with its principal place of business located in the City and County
of Honolulu, in the State of Hawaii. DA is a construction contractor specializing
in drywall installation.
3. Upon information and belief, Defendant David Alcos is and
was, at all times relevant herein, a resident of the City and County of Honolulu,
State of Hawaii.
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4. John Does 1-10, Jane Does 1-10, Doe Corporations 1-10, Doe
Partnerships 1-10, and Other Entities 1-10 (collectively, “Doe Defendants”) are
sued herein under fictitious names for the reason that their true names and
identities are presently unknown to Plaintiffs except that they caused, contributed
to causing or were substantial factors in causing one or more of the injuries sued
for herein and Plaintiff prays for leave to certify their true names, identities,
capacities, activities, and responsibilities when the same are ascertained.
JURISDICTION AND VENUE
5. This Court has subject matter jurisdiction pursuant to 28 U.S.C.
§ 1332 in that at the time this action is being commenced, there is complete
diversity of citizenship between Plaintiff and Defendants and the amount in
controversy exceeds $75,000 exclusive of interest and costs.
6. Venue properly lies in this Court under 28 U.S.C. § 1391(a)
because Defendants’ acts or omissions giving rise to Plaintiff’s claims occurred
within this district and because the property that is the subject of this action is
situated in this District.
PROPERTY
7. The property subject to this Complaint is known as the
International Market Place and is located at 2330 Kalakaua Avenue, Honolulu,
Hawaii 96815 (“Property”).
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8. The Property is currently undergoing renovations to convert its
prior use into a retail shopping mall facility
9. The renovations taking place on the property will herein be
referred to as the “Project.”
FACTUAL ALLEGATIONS
10. The owner of the Property, TRG IMP LLC (“Owner”), entered
into a contract with dck/FWF (“Construction Manager”) to manage the Project.
11. The Construction Manager entered into a contract with
Gramercy whereby Gramercy was to furnish certain scope of work necessary for
the Project (“Prime Contract”).
12. DA was aware of the Prime Contract.
13. Pursuant to the DA Subcontract, Section 2. SUBCONTRACT
DOCUMENTS, the Prime Contract was incorporated into the DA Subcontract.
14. Pursuant to the Prime Contract, Gramercy entered into a
subcontract with DA, dated February 13, 2015 (“DA Subcontract”), whereby DA
was to provide, among other things, a scope of work for the Project that included
installation of the Project’s drywall and other interior and exterior features of the
Project.
15. On May 7, 2015, the DA Subcontract was signed and executed
by Gramercy and DA.
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16. Prior to entering into the DA Subcontract, DA and its Principal,
David Alcos, represented to Gramercy that DA was solvent and in good standing
with the State of Hawaii Department of Commerce and Consumer Affairs
(“DCCA”).
17. Prior to entering into the DA Subcontract, DA and its Principal,
David Alcos, represented to Gramercy that DA would not perform any other
contract work for any other entities or projects during the course of DA’s work on
the Project.
18. The DA Subcontract is governed by the Laws of the State of
Hawaii.
19. The DA Subcontract, Section 3. ITEM INCLUDED WITHIN
SCOPE OF WORK, requires, among other things, that DA complete all work in
strict accordance with the DA Subcontract and all documents attached to the DA
Subcontract, and that all work be completed in a good workmanlike manner with
new material of the best grade and quality.
20. Upon information and belief, DA failed to complete its work in
compliance with the scope of work contained in the DA Subcontract and its
attached documents.
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21. Upon information and belief, DA failed to complete its work in
a good workmanlike manner and failed to use materials of the highest grade or
quality.
22. The DA Subcontract, Section 7. LAWS, REGULATIONS,
ETC., requires, among other things, DA to complete all work on the Project and
under the DA Subcontract in strict compliance with all Federal, State, Local, and
Municipal laws, as well as the laws, rules, regulations, statues, ordinances, and
directives of all other governing jurisdictions. Further, DA is required to
indemnify and hold harmless Gramercy to the extent of any claims, loss, or
expenses caused by DA’s failure to comply with this obligation.
23. Upon information and belief, DA failed to comply with all
Federal, State, Local, and Municipal laws, as well as the laws, rules, regulations,
statues, ordinances, and directives of all other governing jurisdictions.
24. The DA Subcontract, Section 12. PROGRESS AND
PERFORMANCE: TIME IS OF THE ESSENCE, requires, among other things:
a. DA must begin the DA Subcontract work promptly upon
Gramercy’s order to do so;
b. DA is bound by the construction schedule Gramercy
provided;
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c. DA is liable to Gramercy for all direct and consequential
damages arising out of any breach of the DA Subcontract;
d. Should DA delay the progress or performance of the
work under the DA Subcontract, DA is in breach of the DA Subcontract and must
defend Gramercy, at Gramercy’s request, and indemnify and hold Gramercy
harmless from all damages suffered as a result; and
e. Gramercy is entitled to terminate the DA Subcontract due
to DA’s late performance.
25. Upon information and belief, DA failed to complete the work
under the DA Subcontract in a timely manner, did not adhere to its own
construction schedule, and, as a direct and proximate result thereof, delayed the
Project.
26. The DA Subcontract, Section 13. INDEMNIFICATION,
requires, among other things, DA indemnify, defend, and hold harmless Gramercy,
the Owner, and anyone else acting for or on behalf of any of them from any claims,
liability, damage, losses, expenses, demands and causes of action of any nature
whatsoever which arise out of or are connected with or are claimed to arise out of
or be connected with the performance of work by DA, or any act or omission by
DA, including all claims relating to DA’s subcontractors, vendors, agents, or
employees.
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27. The DA Subcontract, Section 16. TAXES, ESCALATION,
ETC., requires, among other things, DA to pay any and all taxes, costs, fees, etc.,
imposed directly or indirectly on account of DA’s work, labor, materials, and
services provided under or relating to the DA Subcontract. DA is required to
substantiate, on demand, that all taxes and other charges are being properly paid.
28. The DA Subcontract’s Attachment #3, titled “Attachment G,”
SCOPE OF WORK, Paragraph F, requires DA to pay all applicable federal, state,
and local taxes, fees, insurance costs, labor union costs, and other necessary
expenses to complete the scope of work in a timely and workmanlike manner.
SCOPE OF WORK, under subheading “Related Sections,” requires DA to pay all
applicable federal, state and local taxes, fees, bond costs, insurance costs, union
dues and other necessary expenses and to complete the scope of work in a timely
and workmanlike manner.
30. Upon information and belief, DA did not pay all applicable
federal, state, and local taxes, labor union costs, vendor invoices and other
necessary expenses, and did not perform the work in a workmanlike manner in
accordance with the plans and specifications and best construction practices.
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31. Upon information and belief, DA did not pay all taxes and other
costs set forth above according to the DA Subcontract, Section 16, and was not
able to substantiate that such taxes and costs were paid upon Gramercy’s demand.
32. The DA Subcontract, Section 20. TERMINATION, provides
that should DA “become insolvent, [DA] may be deemed to be in material breach
of the [DA Subcontract].”
33. Further, the DA Subcontract defines insolvency as including,
among other things:
a. Filing for bankruptcy;
b. Any assignment for the Benefit of Creditors;
c. Any transfer to avoid creditor liability of Hawaii’s
Debtor and Creditor Laws; and
d. Any failure to pay financial obligations as they become
due including tax liability and union agreement fringe benefits.
34. The DA Subcontract, Section 20. TERMINATION, also
provides that Gramercy may deem the DA Subcontract materially breached if DA:
a. Fails to prosecute and perform any part of its work;
b. Fails to exert its best performance efforts;
c. Becomes the subject of any claim of failure to pay the
appropriate wage rates (including fringe benefits);
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d. Is terminated under any other contract with Gramercy.
that in the case of a material breach, Gramercy may, at its own discretion,
terminate the DA Subcontract, by giving DA three (3) days written notice. In the
case of such a termination, Gramercy may take and use any and all materials,
equipment, tools, or chattels furnished by or belonging to DA either at or for the
Project.
that upon the occurrence of a termination for cause, Gramercy may, at its own
discretion, withhold from DA any monies otherwise due under the DA Subcontract
to offset damages incurred as a result of any DA breach. Further, in the case of a
breach by DA, DA is liable to Gramercy for any and all additional costs, expenses,
attorneys’ fees, and other damages, both liquidated and unliquidated, which
directly or indirectly result from DA’s breach.
that if it is determined that a termination for cause under Section 20 was wrongful
or unjustified, such a termination shall be deemed a termination for convenience.
38. The DA Subcontract, Section 32. TERMINATION FOR
CONVENIENCE, states that Gramercy shall have the right to terminate and cancel
the DA Subcontract by three (3) days written notice. Such a termination is for
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Gramercy’s own convenience, without DA being at fault, and requires DA to stop
work immediately. Upon a termination for convenience, Gramercy would be
required to pay DA only for work actually performed in an amount proportionate
to the DA Subcontract price and not for any other costs, including prospective
profits on unperformed work, less any appropriate back charges.
39. Upon information and belief, DA was not solvent at the time
DA entered into the DA Subcontract.
40. Upon information and belief, DA was not solvent throughout
the duration of the DA Subcontract.
41. Upon information and belief, DA performed work on other
contracts and at other projects during the course DA’s work at the Project.
42. Upon information and belief, DA failed to prosecute and
perform all of its work under the DA Subcontract and DA failed to exert its best
performance efforts under the DA Subcontract.
43. Upon information and belief, DA failed to compensate its
employees for work performed on the Project and under the DA Subcontract’s
scope of work for the weeks ending in February 12, 2016, February, 19, 2016, and
February 26, 2016.
44. Upon information and belief, DA has failed to meet its
obligations as they became due, including, but not limited to, failure to fully
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compensate or pay union trust funds, failure to fully compensate or pay DA’s own
employees, failure to fully compensate or pay DA’s own subcontractors, failure to
fully compensate or pay DA’s own vendors and materials suppliers.
45. Upon information and belief, DA failed to provide adequate
staff and supervision to maintain the job schedule under the DA Subcontract such
that Gramercy, at its own expense had to supplement both supervision and workers
to maintain the Project schedule.
46. Upon information and belief, DA failed to pay State and
Federal payroll taxes and General Excise Taxes.
47. Upon information and belief, DA misappropriated Gramercy
funds by charging Gramercy for workers’ wages, administrative wages and
expenses, and materials and supplies which were not used on the Project or under
the DA Subcontract.
48. Upon information and belief, DA charged Gramercy for
workers’ wages including union and statutory benefits, administrative wages and
expenses, and materials and supplies which were used for the benefit of other DA
contracts that were not the DA Subcontract, not for the Project, and not for
Gramercy’s benefit.
49. Pursuant to DA Subcontract Section 20. TERMINATION, on
February 24, 2016, Gramercy timely and properly notified DA by writing of
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Gramercy’s termination of the DA Subcontract for cause effective February 26,
2016.
50. Despite the requirement that DA immediately stop work upon
receiving a termination notice, DA workers and employees remained on the
Property and at the Project and executed unsanctioned job actions on February 25,
2016, after receiving the termination notice (“Unsanctioned Job Actions”).
51. The DA Subcontract, Section 21. LABOR RELATIONS AND
STRIKES, requires DA to take all actions necessary to assure harmonious labor
relations at the Project and to prevent strikes or other labor disputes. DA’s failure
to do so may be deemed a material breach of the DA Subcontract.
52. Upon information and belief, the Unsanctioned Job Actions
included, but are not limited to, DA workers destroyed work already in place and
completed, and DA incited an illegal strike on February 25-26, 2016.
53. Upon information and belief, David Alcos incited and
encouraged the Unsanctioned Job Actions including, but not limited to, the
destruction of work already in place and completed, and an illegal strike.
54. February 25, 2016 was a milestone turnover date under the
Prime Contract.
55. DA was aware that February 25, 2016 was a milestone turnover
date under the Prime Contract.
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56. The DA workers’ Unsanctioned Job Actions were unsanctioned
by any union, disrupted the Project, and caused Gramercy to miss the Prime
Contract’s milestone turnover date on February 25, 2016.
57. On February 26, 2016, the Construction Manager notified
Gramercy by email that DA’s workers’ Unsanctioned Job Actions had “totally
disrupted the Project,” that a separate electrical contractor is “now forced to work
extended hours today and all through the weekend to make up the lost production
in an attempt to stave off consequential damages,” that “there will be more impacts
that have been caused by the DA Builders [Unsanctioned] Job Action,” and that
Gramercy is “hereby advised that any impact costs associated with the job action
by Gramercy or your subordinate subcontractor (past and current) that disrupts the
construction of the [Project] will be borne by Gramercy.”
58. The DA Subcontract, Section 41. QUALITY, requires DA to, at
all times, provide first-quality new materials, and workmanship conforming to the
DA Subcontract and in accordance with the best standards of the construction
industry where the Project is located.
59. Upon information and belief, DA did not at all times provide
first-quality workmanship conforming to the DA Subcontract and in accordance
with the best standards of the construction industry where the Project is located.
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60. The DA Subcontract’s Attachment A, titled Price And Scope
Of Work, requires DA to perform work under the DA Subcontract in accordance
with the Project’s schedules.
61. Upon information and belief, DA failed to perform its work
under the DA Subcontract in accordance with the Project’s schedules.
SCOPE OF WORK, in the final bullet point, requires DA to maintain good
standing with the State of Hawaii throughout the duration of DA’s work on the
Project and under the DA Subcontract.
63. Upon information and belief, DA did not maintain good
standing with the DCCA throughout the duration of DA’s work on the Project and
under the DA Subcontract.
64. The DA Subcontract includes an “Attachment ‘H’ Guaranty
Agreement” (“DA Guaranty”). The DA Guaranty was signed by David Alcos,
DA’s Principal, on May 7, 2015, and pledged as security the real property located
at 91857 Pohakupuna Road, Ewa Beach, Hawaii 96706 (“Pledged Ewa Beach Real
Property”).
65. Upon information and belief, David Alcos caused the Pledged
Ewa Beach Real Property to be encumbered with a mortgage of approximately
$400,000.00 on or about May 14, 2015.
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66. Gramercy was wrongfully and fraudulently induced to enter
into the DA Subcontract as a result of the pledge of this asset for which it has now
been damaged.
67. Gramercy is entitled to execute on the guarantee and against the
Pledged Ewa Beach Real Property.
68. The DA Subcontract Sections 7, 12, 13, and 23, among other
things, all include clauses that require DA to indemnify, defend, and hold harmless
for claims, losses, and expenses arising from DA’s performance under the DA
Subcontract.
69. Upon information and belief, Gramercy has suffered and shall
suffer damages for which DA is obligated to indemnify, defend, and hold harmless
Gramercy.
70. Upon information and belief, DA has been paid certain amounts
for work not performed and advanced amounts for materials, work, or services not
rendered.
workers’ wages and administrative wages and expenses that were paid to David
Alcos, friends and family members of David Alcos, and workers who were
working on projects for DA other than the Project for work that was never
completed or performed for the Project.
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72. Upon information and belief, DA submitted overtime costs for
reimbursement or approval that were not supported or which it was not entitled
(“Unsupported Overtime Costs”).
73. Upon information and belief, DA sought change orders for
work that was already specified in the base contract under the FM Global
Requirements (“Unsupported FM Global Requirements Change Orders”).
74. Upon information and belief, DA sought change orders for
work that was not approved or not paid to Gramercy by the Owner.
75. Upon information and belief, DA breached other provisions of
the DA Subcontract.
76. As a result of DA’s conduct, Gramercy has suffered and will
continue to suffer substantial damages.
COUNT I
(Breach of Contract)
77. Gramercy repeats, realleges, and incorporates by reference
herein the allegations contained in the preceding paragraphs of this Complaint.
78. The DA Subcontract was a valid and enforceable contract.
79. At all times, Gramercy performed all its obligations or was
ready, willing, and able to perform its obligations under the DA Subcontract.
80. DA materially breached the DA Subcontract by, among other
things, their conduct described herein in this Complaint.
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81. DA’s breaches are not excusable or justifiable by law,
necessity, or otherwise.
82. As a direct and foreseeable result of DA’s breaches of the DA
Subcontract, Gramercy has been damaged in an amount, in excess of $75,000, to
be determined at trial.
COUNT II
(Breach of Good Faith and Fair Dealing)
84. In all contracts, including the DA Subcontract, there is an
implied covenant of good faith and fair dealing.
85. DA’s conduct, as described above constitutes violations of the
covenant of good faith and fair dealing.
86. As a direct and proximate result of DA’s breaches of the
covenant of good faith and fair dealing, Gramercy has been damaged in an amount,
in excess of $75,000, to be determined at trial.
COUNT III
(Promissory Estoppel)
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88. DA promised and represented to Gramercy that it was capable
of completing the work under the DA Subcontract, and that DA was, at that time,
both solvent and in good standing with the DCCA, and that DA would maintain
solvency and good standing with the DCCA throughout the duration of DA’s
work on the Project and under the DA Subcontract and DA would not perform
work on any other job and/or project throughout the duration of DA’s work on the
Project.
89. In exchange for DA’s representations and promises, Gramercy
chose DA over other subcontractor’s bids and executed the DA Subcontract with
DA rather than another subcontractor.
90. DA should have reasonably expected its representations and
promises as set for the above would induce Gramercy to enter into the DA
Subcontract with DA.
91. Gramercy relied, to its detriment, on DA’s representations and
promises when they executed the DA Subcontract with DA rather than executing
the DA Subcontract with another subcontractor.
92. As a result of Gramercy’s reliance upon the representations and
promises made by DA, Gramercy has suffered damages in an amount, in excess of
$75,000, to be determined at trial.
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COUNT IV
(Unjust Enrichment)
94. DA has been unjustly enriched as a result of having been
compensated by Gramercy despite its deficient performance of the DA
Subcontract.
95. DA has been unjustly enriched as a result of DA’s
misappropriation of Gramercy’s funds by charging Gramercy for workers’ wages,
administrative wages and expense and materials and supplies which were not used
on the Project or under the DA Subcontract.
96. As a direct and foreseeable result of DA’s unjust enrichment,
Gramercy has been damaged in an amount, in excess of $75,000, to be determined
at trial.
COUNT V
(Fraud in the Inducement/Misrepresentation)
98. As part of the DA Subcontract, DA pledged the Pledged Ewa
Beach Real Property, and represented that DA or David Alcos was the owner of
this real estate.
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99. Approximately seven (7) days after signing the DA Guaranty,
David Alcos encumbered the real estate with a mortgage of approximately
$400,000.00.
100. DA and David Alcos represented to Gramercy that its payroll
correctly reflected work actually preformed on the Project and under the DA
Subcontract.
101. Upon information and belief, DA put workers and
administrative staff who had not worked on the Project or under the DA
Subcontract on the payroll.
102. DA and David Alcos represented to Gramercy that at the time
DA entered into the DA Subcontract and throughout the duration of the DA
Subcontract, DA was both solvent and in good standing with the DCCA.
103. Upon information and belief, DA was not solvent at the time
DA entered into the DA Subcontract, and DA did not maintain solvency
throughout the duration of the DA Subcontract.
104. DA did not maintain good standing with the DCCA throughout
the duration of the DA Subcontract.
105. At the time of these representations, DA and David Alcos knew
that they were false, or made the representations with a reckless disregard for their
truth or falsity.
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106. DA and David Alcos made these promises and representations
with the intent to deceive Gramercy and for the purpose of inducing Gramercy to
execute the DA Subcontract and to continue with its obligations under the DA
Subcontract.
107. In reliance on DA’ and David Alcos’ promises and
representations, Gramercy executed and continued with its obligations under the
DA Subcontract.
108. As a proximate result of DA and David Alcos’ promises and
representations, Gramercy has been damaged in an amount, in excess of
$75,000.00, to be proven at trial.
COUNT VI
(Interference With Contract)
110. The Prime Contract was an enforceable contract between
Gramercy and the Construction Manager.
111. DA and David Alcos were aware of the existence of the Prime
Contract prior to entering into the DA Subcontract.
112. On February 25, 2016, DA and David Alcos, through their
conduct, were responsible for the Unsanctioned Job Action, including, but not
limited to, destroying work already in place and inciting an illegal strike among
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other workers not employed by DA or working under the DA Subcontract at the
Project.
113. DA’s Unsanctioned Job Action interfered with the Prime
Contract.
114. David Alcos’ actions inciting and encouraging the
Unsanctioned Job Action interfered with the Prime Contract.
115. As a proximate result of DA and David Alcos’ interference with
the Prime Contract, Gramercy has been damaged in an amount, in excess of
$75,000.00, to be proven at trial.
COUNT VII
(Conversion)
workers’ wages, materials, supplies, and other items which were not used on the
Project or under the DA Subcontract.
workers’ wages, materials, supplies, and other items which were used on other DA
contracts. These materials, supplies, and other items were not used on the Project,
under the DA Subcontract, or for the benefit of Gramercy.
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119. In fact, upon information and belief, DA charged Gramercy for
workers’ wages, materials, supplies, and other items, which DA used for jobs and
contracts other than the Project and/or the DA Subcontract.
120. As a direct result of DA’s conversion of materials, supplies, and
other items, Gramercy has been damaged in an amount, in excess of $75,000.00, to
be proven at trial.
COUNT VIII
(Declaratory and Injunctive Relief)
122. Gramercy believes that DA will dispute some or all of the
allegations set forth in this Complaint and that an actual controversy, within the
jurisdiction of this Court, exists with regard to the relative rights, duties, and
liabilities of the parties under the DA Subcontract.
123. Gramercy seeks an order declaring that:
a. DA materially breached the DA Subcontract and that the
Gramercy properly terminated the DA Subcontract for cause, effective
February 26, 2016;
b. Due to DA’s material breach of the DA Subcontract, DA
is prohibited from enforcing any other provisions of the DA Subcontract, and that
DA is liable to Gramercy for any and all additional costs, expenses, attorneys’ fees,
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and other damages, both liquidated and unliquidated, which directly or indirectly
result from DA’s breach;
c. DA is not entitled to the Unsupported Overtime Costs,
the “Unsupported FM Global Requirements Change Orders” or the change orders
not approved or not paid to Gramercy by the Owner;
d. Gramercy is entitled to offset any monies due to DA with
any back charge by the Construction Manager and Owner as well as any costs
incurred by Gramercy to maintain the Project schedule or in its performance of
work that was part of DA’s Subcontract.
e. DA is obligated to defend, indemnify, and hold harmless
Gramercy from any and all third party damages incurred as a result of DA’s
material breaches of the DA Subcontract.
124. Based on DA’s numerous material breaches of the DA
Subcontract, Gramercy is entitled to the following prospective relief:
a. The Court should enter a temporary restraining order
enjoining, restraining and prohibiting DA, and each of its agents, officers,
representatives and employees, and all person or agencies acting on behalf of or in
concert with any of them, from taking any further action with regards to the
Property, the Project, or the DA Subcontract, and requiring DA to act in
accordance with the Subcontract’s termination;
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b. The Court should enter a preliminary and permanent
injunction enjoining, restraining and prohibiting DA, and each of its agents,
officers, representatives and employees, and all persons or agencies acting on
behalf of or in concert with any of them, from taking any further action with
regards to the Property, the Project, or the DA Subcontract, and requiring DA to
act in accordance with the Subcontract’s termination;
c. The Court should further award additional prospective
relief, either alternatively or cumulatively, as may appear appropriate to the Court
based on the irreparable injuries and harm to Gramercy that has not yet been
realized. Gramercy expressly reserves the right to supplement its request for
prospective relief as further damage is realized by DA’s illegal and improper
actions.
COUNT IX
(Gramercy’s Interests in the Pledged Ewa Beach Property)
126. DA is a debtor to Gramercy by virtue of its breach of the DA
Subcontract and the claims that arise in this Complaint.
127. DA has refused to pay or is unable to pay its debts to Gramercy
arising under its breach of the DA Subcontract.
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128. The DA Subcontract includes an “Attachment ‘H’ Guaranty
Agreement” (“DA Guaranty”). The DA Guaranty was signed by David Alcos,
DA’s Principal, on May 7, 2015, and pledged as security to the DA Subcontract the
real property located at 91-857 Pohakupuna Road, Ewa Beach, Hawaii 96706
(“Pledged Ewa Beach Real Property”).
129. As a result of DA’s breaches of the DA Subcontract, Gramercy
has been damaged in an amount that DA is unable or unwilling to pay. Therefore,
Gramercy seeks an order declaring:
a. Gramercy has a valid, attached security interest in the
Pledged Ewa Beach Real Property; and
b. Gramercy has a right to foreclose on the Pledged Ewa
Beach Real Property.
130. Gramercy seeks an order foreclosing on the Pledged Ewa Beach
Real Property.
131. Gramercy seeks an order placing an equitable lien on the
Pledged Ewa Beach Real Property in favor of Gramercy.
132. Gramercy seeks an order that Defendants must hold the Pledged
Ewa Beach Real Property as trustees in constructive trust for Gramercy’s benefit
until Defendants’ debts to Gramercy are satisfied.
27
436877-1
COUNT X
(Fraudulent Transfers – Violation of HRS § 651C-4(a)(1))
134. DA is a Debtor of Gramercy due to the claims that arise in this
Complaint.
135. DA is insolvent pursuant to HRS Chapter 651C and HRS §
651C-2.
136. DA funds that, upon information and belief, were used to pay
David Alcos’ friends and family members’ salaries for alleged administration of
DA’s operations were transfers of an interest of the Debtor in property. These
transfers were to “insiders” and DA did not receive reasonably equivalent value or
consideration in exchange for these transfers.
137. The transfers of DA funds cited in the preceding paragraphs of
this Complaint were made with the actual intent to hinder, delay or defraud future
creditors, such as Gramercy.
138. The transfers cited in the preceding paragraphs of this
Complaint were concealed or attempted to be concealed.
139. Gramercy is entitled to a judgment avoiding the transfers cited
in the preceding paragraphs of this Complaint under HRS § 651C-4(a)(1), and
other transfers to be determined following discovery.
28
436877-1
COUNT XI
(Fraudulent Transfers – Violation of HRS § 651C-4(a)(2))
Complaint.
142. DA funds that, upon information and belief, were used to pay
salaries for supposed administrative work completed by friends and family
members of David Alcos were an interest of the Debtor in property. These
transfers were to “insiders” and DA did not receive reasonably equivalent value for
these transfers.
143. At the time DA made the transfers described in the preceding
paragraphs of this Complaint, DA was engaged or was about to engage in a
business or transactions for which the remaining assets of the debtor would
become unreasonably small in relation to its business.
144. Alternatively, DA believed or reasonably should have believed
that it would incur debts beyond its ability to pay as they came due.
145. Gramercy is entitled to a judgment avoiding the transfers cited
the preceding paragraphs of this Complaint under HRS § 651C-4(a)(1), and other
transfers to be determined following discovery.
29
436877-1
COUNT XII
(Pierce the Corporate Veil – Alter Ego)
Complaint.
148. DA is now insolvent, or in the alternative, does not have the
necessary cash to reimburse Gramercy for amounts that may result from judgments
arising from this Complaint.
149. Upon information and belief, David Alcos caused DA to pay
his friends and family members’ salary from DA funds for work that was never
completed.
150. David Alcos treated and used the assets and property of DA as
if they were his own personal assets and property.
151. David Alcos is the sole owner and principal of DA.
152. DA is an alter ego of Davis Alcos.
153. Because David Alcos has treated DA as his alter ego, DA now
lacks the cash and/or guaranty and security to meet its obligations to Gramercy,
and as a result, Gramercy has been or will be injured.
30
436877-1
154. Gramercy is entitled to a judgment that pierces DA’s corporate
veil and imposes DA’s liability owed to Gramercy on Davis Alcos in his personal
capacity.
WHEREFORE, Plaintiff Gramercy prays that judgment be entered
against Defendant DA and in favor of Plaintiff Gramercy as follows:
A. For general, special, consequential, incidental, and punitive
damages in an amount in excess of $75,000.00, to be proven at trial;
B. Declaratory and Injunctive relief;
C. For prejudgment interest;
D. For its experts’ fees and attorneys’ fees and costs; and
E. For any and all further relief that this Court may deem just and
proper.
DATED: Honolulu, Hawaii, May 27, 2016.
/s/ Grant Fasi Allison

HARVEY J. LUNG
GRANT FASI ALLISON
Attorneys for Plaintiff

GRAMERCY GROUP, INC.
31
436877-1

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Case 1:16-cv-00114-JAO-RT Document 15 Filed 05/27/16 Page 1 of 31 PageID #: 62

BAYS LUNG ROSE & HOLMA

HARVEY J. LUNG 2991-0

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

GRAMERCY GROUP, INC., ) CIVIL NO. 16-00114-JMS-KSC

PLAINTIFF GRAMERCY GROUP, INC.’S

Plaintiff GRAMERCY GROUP, INC. (sometimes referred to as

Holma, asserts the following Complaint against Defendants D.A. BUILDERS,

PARTNERSHIPS 1-10, and OTHER ENTITIES 1-10 (“Defendants Does”):

1. Plaintiff Gramercy is and was at all times relevant herein a

2. Upon information and belief, Defendant DA is and was, at all

of Honolulu, in the State of Hawaii. DA is a construction contractor specializing

3. Upon information and belief, Defendant David Alcos is and

capacities, activities, and responsibilities when the same are ascertained.

JURISDICTION AND VENUE

5. This Court has subject matter jurisdiction pursuant to 28 U.S.C.

diversity of citizenship between Plaintiff and Defendants and the amount in

controversy exceeds $75,000 exclusive of interest and costs.

6. Venue properly lies in this Court under 28 U.S.C. § 1391(a)

because Defendants’ acts or omissions giving rise to Plaintiff’s claims occurred

situated in this District.

7. The property subject to this Complaint is known as the

International Market Place and is located at 2330 Kalakaua Avenue, Honolulu,

Hawaii 96815 (“Property”).

8. The Property is currently undergoing renovations to convert its

prior use into a retail shopping mall facility

9. The renovations taking place on the property will herein be

referred to as the “Project.”

into a contract with dck/FWF (“Construction Manager”) to manage the Project.

11. The Construction Manager entered into a contract with

the Project (“Prime Contract”).

12. DA was aware of the Prime Contract.

13. Pursuant to the DA Subcontract, Section 2. SUBCONTRACT

DOCUMENTS, the Prime Contract was incorporated into the DA Subcontract.

14. Pursuant to the Prime Contract, Gramercy entered into a

15. On May 7, 2015, the DA Subcontract was signed and executed

by Gramercy and DA.

16. Prior to entering into the DA Subcontract, DA and its Principal,

with the State of Hawaii Department of Commerce and Consumer Affairs

17. Prior to entering into the DA Subcontract, DA and its Principal,

18. The DA Subcontract is governed by the Laws of the State of

19. The DA Subcontract, Section 3. ITEM INCLUDED WITHIN

new material of the best grade and quality.

20. Upon information and belief, DA failed to complete its work in

21. Upon information and belief, DA failed to complete its work in

22. The DA Subcontract, Section 7. LAWS, REGULATIONS,

directives of all other governing jurisdictions. Further, DA is required to

expenses caused by DA’s failure to comply with this obligation.

23. Upon information and belief, DA failed to comply with all

statues, ordinances, and directives of all other governing jurisdictions.

24. The DA Subcontract, Section 12. PROGRESS AND

PERFORMANCE: TIME IS OF THE ESSENCE, requires, among other things:

a. DA must begin the DA Subcontract work promptly upon

Gramercy’s order to do so;

b. DA is bound by the construction schedule Gramercy

c. DA is liable to Gramercy for all direct and consequential

damages arising out of any breach of the DA Subcontract;

d. Should DA delay the progress or performance of the

work under the DA Subcontract, DA is in breach of the DA Subcontract and must

defend Gramercy, at Gramercy’s request, and indemnify and hold Gramercy

harmless from all damages suffered as a result; and

Gramercy Group's Lawsuit in Hawaii

Gramercy Group's Lawsuit in Hawaii