Five years after the Apartment Store announced that roughly $320,000 in landlord and tenant deposits had gone missing from the Missoula property management company, former clients are still waiting to recoup their losses.
"I would love a return," says Andy Erickson, who along with 50 other former Apartment Store clients—all landlords—filed suit in Missoula District Court March 1 against the Apartment Store's former insurance company, Chicago-based Continental Casualty Co., in an effort to finally collect their money.
Erickson and the other plaintiffs were notified in March 2006 that rental deposits kept by the company had inexplicably vanished. Allegations of fraud ensued. Apartment Store owner Kari Kimball said former owner Maris Mills mismanaged funds. Mills fired back. Both women filed lawsuits. The Apartment Store declared Chapter 7 bankruptcy. An audit commenced.
In December 2007, Galusha, Higgins & Galusha found no evidence of fraud. But the accounting firm did discover major accounting errors in the company's books. As bankruptcy proceedings languished, many landlords paid missing tenant rental deposits from their pockets.
Finally, late last year, about 30 percent of the missing money was distributed through Missoula District Court to the former landlords, says attorney Robert Bell, of Reep, Bell and Laird, P.C.
But that's not enough for the plaintiffs. The lawsuit argues that the Apartment Store negligently managed landlord trust accounts, and that should have been covered by Continental Casualty.
"It's about pursuing the Apartment Store's insurance company for the difference between what the landlords actually received back when all was said and done from the Apartment Store's trust accounts versus what they should have received," Bell says.
To date, the insurance company has denied coverage of landlord claims. Continental Casualty spokeswoman Katrina Parker declined to comment, citing company policy on pending litigation. As it stands, there's no immediate resolution.
"It's really just one of those cases that just goes on and on and on," Bell says.