Dept. of Revenue backs foreclosure on Nick & Joie’s

By MATT MILNER Courier staff writer

August 28, 2008 12:34 am

— OTTUMWA — The state agency whose actions led to the closure of Nick & Joie’s says it does not oppose a bank’s foreclosure on the restaurant.
The Iowa Department of Revenue is a defendant in U.S. Bank v. Nick & Joie’s, LLC et al, but that title is misleading. The suit lists the IDR because the department also has a claim against the restaurant, not because the bank believes it has done anything wrong.
The same is true of the city of Ottumwa and the estate of Lee Barnett, both of which are listed as co-defendants.
U.S. Bank sued after it said tens of thousands of dollars in loans to the restaurant went unpaid. The IDR’s claim, which is separate, seeks $5,100 in overdue sales taxes. Court filings show the IDR received a check from Nick & Joie’s on July 12 for $1,901, but the check was not honored. A late filing by the restaurant dated Aug. 4 added another $3,200.
The unpaid taxes led the IDR to revoke the restaurant’s tax permit effective July 31. Police shut down the restaurant two weeks ago after it continued to operate without a permit.
Ottumwa’s claim stems from civil infractions, while the Barnett family’s involvement is linked to accusations that restaurant owner Tim Stabile stole hundreds of thousands of dollars from Barnett to finance the restaurant.
U.S. Bank appears to be first in line legally. The federal government initially wanted Stabile to forfeit Nick & Joie’s as part of the case it built around Stabile’s use of Barnett’s money. Prosecutors backed off that demand when U.S. Bank emerged with an earlier claim via the loans.
That brings things back to the current court filing by the IDR. The department backed U.S. Bank in seeking foreclosure on the property, effectively making a co-defendant into a co-plaintiff.
“[The Iowa Department of Revenue] hereby consents to the entry of a judgment and decree of foreclosure in favor of,” U.S. Bank, the filing reads.
The IDR filing also asks that the judge establish an order for the claims against Nick & Joie’s. That’s a question of some importance, since the department appears to believe proceeds from a sale of the property could exceed the value of U.S. Bank’s claim. Any additional revenue will likely go to the other claimants in order of their legal priority.
It is not known when the court will respond. There are currently no dates listed for hearings in the case.
The fight over the restaurant is linked to two other cases currently making their way through the legal system. Stabile faces sentencing on the federal charges on Sept. 18. State charges are also pending against Stabile for running Nick & Joie’s without a tax permit. Stabile waived the preliminary hearing in that case earlier this week. No trial date is set.
Matt Milner can be reached at (641) 683-5359 or via e-mail at mwmilner@mchsi.com