A prominent Des Moines gastroenterologist has filed a lawsuit in Polk County alleging Orton Homes President Rob Orton and jailed Johnston developer Daniel Pettit failed to repay him $850,000.
Dr. Bernard Feldman, who practices at Mercy Hospital in Des Moines, filed the lawsuit April 22 in Polk County. Though Pettit, 43, alleged to owe millions, is the target of a criminal investigation involving widespread allegations of fraud, the new suit is the first to name Orton, CEO of the American Group LLC, a holding company for roughly 20 real estate companies that also includes RE/MAX Precision in Clive.
Neither Feldman nor Orton responded to phone calls seeking comment.
A Watchdog probe in December found judgments and debts of nearly $70 million claimed against Pettit and limited liability corporations in which he is involved. The court actions show his failed deals affected not only yet-to-be-constructed developments in West Des Moines, but a wide swath of business associates, lenders and companies beyond Iowa.
Feldman alleged in a lawsuit filed last year that he invested his own money in a mix of Pettit’s development projects, but that Pettit entered into agreements on his own that affected those entities without notifying Feldman. He alleged Pettit also failed to pay company bills and misused his money instead of acquiring properties for which his investments were intended.
Among the developments Feldman invested in was a planned West Des Moines apartment complex next to the new Des Moines University campus that never got built. Now, Feldman, the city and an insurance company are arguing in court over who should be financially responsible for site improvements that went uncompleted.
Pettit was ordered to repay Feldman almost $9.3 million in that case after Feldman alleged fraud, fraudulent inducement and misrepresentation.
New lawsuit accuses Pettit, Orton of breach of contract
Feldman, 72, of Urbandale, alleges in the new lawsuit that Pettit and Orton failed to repay a 2021 loan for $850,000, including about $32,000 in interest that had accumulated at the time. The lawsuit alleges breach of contract by Pettit and Orton as well as their corporation, Mozart Properties.
Pettit, who was arrested Jan. 12 after failing to show up in early December to serve a six-month jail term for contempt in three other civil cases, remains in the Polk County Jail.
Last week, Dallas County Recorder ReNae Arnold confirmed Pettit was the subject of new allegations to authorities that he tried to fraudulently give one of his investors the West Des Moines apartment development site that’s entangled in foreclosure and several court cases.
Investors asked for an investigation into who signed off on a notarized quit-claim deed for a 10-acre parcel near the Des Moines University campus. The transaction sought to give the property in Dallas County, just west of the Polk County line, to a limited liability corporation managed by Michael Metcalf, a Georgia investor.
The quit claim carried Pettit’s signature and the notary stamp of Mike Reysack, an Ankeny real estate agent.
Lee Rood’s Reader’s Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at lrood@registermedia.com, at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.
This article originally appeared on Des Moines Register: Orton Homes head named in latest Daniel Pettit lawsuit