State denies claim over inspection, licensing of motel

Shawano Leader Reporter/October 24, 2005
By Tim Ryan

A claim filed against the state by the R.C. Samanta Roy Institute of Science and Technology and one of its subsidiaries has been denied by the Wisconsin Attorney General’s Office, the Shawano Leader has learned.

SIST, and its subsidiary Midwest Hotels and Motels of Shawano, LLC, filed a notice of claim in August against the State of Wisconsin, Department of Health and Family Services, over the way the department handled the inspection and licensing of the Best Western Village Haus.

The claim and a draft copy of a civil suit that SIST apparently intended to file in U.S. District Court were sent to the Attorney General’s office on Aug. 5.

The draft complaint alleges that the state – through an employee in one of its departments – interfered with SIST’s business operations because of the racial background of Samanta Roy, who is of East Indian descent.

The complaint further alleges violations of property rights, due process, equal protections and statutory authority.

Much of the language in the complaint is similar to a civil suit filed by SIST against the city of Shawano on July 29 regarding the city’s handling of liquor licenses, and the suit filed on April 13 against the Shawano Leader, which was dismissed this week by a federal judge.

The response from the Attorney General’s Office sent to SIST on Oct. 6 denied the claim.

"Our investigation reveals no basis to substantiate any liability on the part of any State of Wisconsin employee," the letter stated.

The letter also stated that the claim was also being denied because, under state statutes, a notice of claim must be sent by certified mail and must be sworn to by the claimant.

At the time that SIST’s notice of claim was filed, the state Department of Revenue was in the midst of an investigation into whether Midwest Hotels and Motels had operated the Best Western without a permit. That investigation resulted in a criminal complaint filed this week.

It is not clear whether SIST or its subsidiary were aware of the investigation. However, the person contracted by Midwest Hotels to manage the Best Western was interviewed by a DOR investigator about two weeks before SIST’s notice of claim was filed.

The draft of SIST’s civil complaint also named as a defendant in the potential lawsuit Lisa Lucht, an environmental health specialist with the state Department of Health and Family Services; Division of Public Health.

An account of inspections at the Best Western, written by Lucht, is also included in the criminal complaint filed this week.

Lucht made inspections on April 26, May 10 and May 13 of this year. She was told by Midwest Hotels representatives that they did not yet own the property.

However, according to both Lucht’s account and SIST’s draft civil complaint, Midwest Hotels representatives accompanied her during some of the inspections and went over the reports with her.

According to her account, Lucht made two sets of reports – one intended for the current owner, American Securities, Inc., and a pre-inspection report intended for the purchaser, Midwest Hotels.

The pre-inspection report included changes or repairs that would have to be made before a permit could be issued to the purchaser.

According to the draft of SIST’s civil complaint, all of the changes or repairs required by Lucht on those three visits were made.

"The management responded by making all the changes according to their best judgment and understanding of the request," SIST stated in its complaint.

According to SIST’s complaint, the hotel facility sale closed on May 25, but the criminal complaint filed this week maintains that Midwest Hotels had been operating the facility since mid April.

According to Lucht, she contacted the city of Shawano on June 7 to inquire if there was yet any proposed date for the Best Western sale and management change. She was then informed that the sale had already taken place, according to her statement.

Lucht ordered the hotel shut down late in the afternoon on June 7 on the grounds it was operating without a state permit.

However, her superiors – including interim director of the Division of Public Health, Herb Bostrum – were contacted by representatives of Midwest Hotels and intervened to keep the facility opened.

In an interview with the Shawano Leader that evening, Bostrum said the hotel permit was simply a paperwork matter that was resolved the same day.

However, an inspection conducted on June 8 cited 11 violations that needed to be corrected before a permit could be issued.

Lucht’s account includes a confrontational exchange with Kalmar Gronvall, an agent for Midwest Hotels who was named in the criminal complaint filed this week, and Steven Theyes, identified in SIST’s draft of the civil suit as the hotel’s operational manager.

Lucht states she attempted to explain what Midwest Hotels needed to do to obtain a permit. According to Lucht, Gronvall and Theyes demanded to know "who paid them to come after them."

They accused her of contacting the Shawano Leader about the permit issue; an allegation repeated by SIST in its draft civil complaint.

The Shawano Leader wrote several stories about the hotel’s closing and it’s reopening at the time the events took place.

According to Shawano Leader editor Kent Tempus, Lucht has never contacted the newspaper regarding this matter. In fact, Tempus said, when later attempts were made to get a comment from her, Lucht referred a reporter to the department’s public relations representative.

Lucht wrote that she presented paperwork to Gronvall and Theyes for their signatures during the June 8 meeting but that they refused to sign and began to yell comments, including: "who is paying you to do this," "who is paying you to come after us," and, "you will regret doing this."

The next day, according to SIST’s complaint, a new health sanitarian inspected the site.

"Within two hours and without any hassle, the entire facility was inspected and licenses were released for the hotel and restaurant and lounge," SIST’s draft complaint stated.

It was not clear why a new sanitarian was assigned or who made that decision.

According to SIST and Midwest Hotels, in the draft of the civil suit, "Lucht had been intent upon finding fault with the facility since her first visit on April 26, 2005 when she discovered the possibility that Midwest Hotels would be purchasing the facility."

The draft alleges that Lucht’s purpose was to "discriminate, harass, and cause trouble for the Plaintiffs…"

The draft of the civil complaint asks for damages "in excess of $75,000 plus damages in such further sums as may be sustained," attorney fees and court costs, "and other relief as the court deems proper."

The complaint also demanded that a jury trial be held in the matter.

According to the state, the civil suit has not been filed.

Calls to SIST attorney Rebekah Brown, and Midwest Hotels CEO Naomi Isaacson were not returned.

Officials at DHFS could also not be reached for comment.