REPORTER'S NOTEBOOK: A legal affairs check on District 3 Council race

John O’Toole, a local realtor and a top candidate in the District 3 City Council race, is enmeshed in a civil lawsuit with a former partner of his, according to court records. But he isn’t the only candidate who has been involved in legal actions in recent months and years: Two other top contenders, fellow realtor Craig Galvin and former city employee Frank Baker, have had a suit and an injunction, respectively, filed against them, according to a Reporter review of court records available to the public at Suffolk Superior Court.

Galvin faced a negligence lawsuit in March that was eventually settled, while Baker was hit with an injunction in 2009 by his niece over the Avenue Grille, a Dorchester Ave. eatery. An arbitrator ruled the suit in Baker’s favor later that year.

First, the O’Toole case, which is ongoing: Filed in April, the lawsuit revolves around an alleged $69,000 loan and Optimum Mortgage Company and Citadel Funding Corp., which O’Toole, the plaintiff Paul Connolly, and a third person formed in 2005. In 2007, the filing states, the three made a separation agreement that ended the third person’s equity and partnership.

According to the lawsuit, Connolly provided the cash required to pay the third person out, as well as additional funds to keep the company operating, for a total of $70,000. O’Toole agreed to match the amount, but did not have the cash on hand, and asked Connolly and his wife, April, to help him, according to the Connollys’ suit. The pair accuses O’Toole of refusing to pay back the loan, though O’Toole argues in documents responding to the suit that no written agreements exist, and notes that the Connollys’ suit doesn’t mention any rate of interest, due dates, and other terms that are normally associated with a loan.

O’Toole told the Reporter he is confident the lawsuit will be dismissed, adding that he has evidence that directly contradicts what the Connollys allege in the suit. He declined to speak further about the matter, noting that it remains in litigation and saying he is running a “positive” and “upbeat” campaign based on a 20-year record of “fighting to make Dorchester better.”

Connolly is backing one of O’Toole’s opponents, Galvin, and made a $100 contribution to Galvin’s campaign in August, according to the Office of Campaign and Political Finance.

O’Toole’s legal memo calling for the dismissal of the case argues that Connolly was the sole officer and director of Optimum Mortgage Corporation in all documents on file with the secretary of state. “O’Toole is a plumber by trade and part owner of a real estate sales company,” the memo says. “His role in Optimum was that he attended to the renovation of the corporate headquarters and as the part owner of a real estate company he funneled whatever business he could from the mortgage brokerage company to Optimum.”

In 2007 and 2008, many companies Optimum did business with closed down, and Optimum had few places to sell mortgages it was trying to originate, according to court documents, and O’Toole, who works at Olde Towne Real Estate, made whatever contributions he could, hoping that the company could survive the “mortgage market mess.”

“Essentially O’Toole invested his entire life savings in Optimum and he had no control over the management of the corporation,” O’Toole’s response to the lawsuit says. It adds: “Now O’Toole realizes that having not been an officer of the company, never having received any stock certificates and never having had an opportunity to examine the books and records of the company, he has lost his entire life savings.”

The Connollys’ attorney, in a court filing, called O’Toole’s allegations “spurious” and noted that O’Toole is identified as a “COO,” or chief operating officer, of Optimum Mortgage Corp in a $200 contribution made to Mayor Thomas Menino’s campaign in March 2010.

A hearing on O’Toole’s motion to dismiss is set for Oct. 13.

O’Toole was also a target of a lawsuit roughly a decade ago, when a local businessman sued him and the Cedar Grove Civic Association, then-House Speaker Thomas Finneran, and City Councillor Maureen Feeney, claiming they wanted to take land that he wanted to use to relocate the Schlager Tow Company. The blighted land had been taken by eminent domain to make room for a bike path along the Neponset River, according to the Reporter’s archives. The suit – which drew community outcry and support for O’Toole, Finneran, and Feeney – was eventually dropped.

Moving onto Craig Galvin’s case: Dorchester resident Garvin McHale included him as part of a larger civil lawsuit against George Vernon LLC and Olde Towne Real Estate. Galvin assisted McHale in purchasing a Neponset Ave. condominium in 2008.

In his lawsuit, McHale accused the companies of knowing that the exercise room, steam room and billiard room, and wet bar in the common area of the condo’s basement were built without proper permits, according to the lawsuit, and Galvin was accused of failing to inform him.

Galvin, a longtime friend of McHale, said McHale filed the lawsuit to protect himself. “As a matter of legal strategy they included my company in the lawsuit,” Galvin said. “I’m happy to say that we have reached an amicable settlement and I am proud to call him a supporter.”

Galvin declined to release details of the settlement.

Finally, Frank Baker’s case: His niece Lauren, who had come up from Texas in 2002 to help Baker save the Avenue Grille, attempted to stop him from selling it in 2009. “I needed to sell the place because it wasn’t performing,” Baker said last week.

In court documents, Lauren Baker accused her uncle, the majority shareholder, of freezing her and her then-husband out of the business. In an affidavit detailing the ups and downs of running the restaurant, Lauren Baker said her uncle “food shopped” at the restaurant, bought items for home, such as diapers with Avenue Grille checks, and paid car payments and one of his mortgages.

Frank Baker fired back in his own affidavit that Lauren’s husband started a competing eatery on Morrissey Boulevard. and incurred debt on the Grille’s behalf, to the detriment of his corporation. “If the Plaintiffs succeed in obtaining the injunction, and this sale is blocked, the corporation will be severely harmed by the accumulating debt and the inability to pay such debt,” he wrote.

An arbitrator decided the case in his favor a few months later, and another owner is now in charge of the restaurant, Frank Baker said.

The Reporter also reviewed Suffolk Superior Court records in the criminal division. In 1994, while in his twenties, Baker pleaded guilty to charges of possession of marijuana, records show. He was given a sentence of two years probation.

“Everybody was young,” Baker said when asked about the case. “I made poor choices.”

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