Garbage carter sues Babylon for lost startup costs

The garbage carter whose contract with Babylon Town was rescinded after it allegedly withheld information in its proposal to the town is suing Babylon for money spent preparing for the contract.

Jody Enterprises of Babylon Inc. is looking to recoup "hundreds of thousands of dollars in expenditures" it said it spent preparing to begin residential garbage pickup, according to the lawsuit. The town is asking for the lawsuit to be dismissed.

Babylon awarded a 10-year, $78 million contract to Jody Enterprises, the lowest bidder, in June 2012. Two months later, company employees William Stegemann and Michael Dalessandro were charged with grand larceny, accused of stealing recyclables from Smithtown, where the company had a contract. The men pleaded not guilty and company officials said they were unaware of the alleged thefts.

After a hearing in September 2012, Babylon canceled the contract before it was finalized, saying their investigators had video that showed Dalessandro working at the company, contrary to sworn statements by executives.

Jody's president, Giustino Gallone, was later charged by the Suffolk County district attorney's office with first-degree offering a false instrument for filing in connection with his bid on Babylon's contract. Gallone, who pleaded not guilty, tried to defraud the town by omitting from his contract proposal his ownership in another garbage company, officials said.

The second lowest bidder, EnCon Industries Corp., was then given the contract by Babylon.

Jody's lawsuit said the company "bought, refurbished and painted garbage trucks" and bought "state-of-the-art GPS systems" for each truck. The company also spent money "coordinating the waste collection route maps" and "procuring equipment, real property and other leases and/or contracts" mandated by the agreement.

The lawsuit calls the allegations of Jody withholding information on its proposal "vague and unsubstantiated" and accuses the town of using "flimsy, unsubstantiated 'reasons' for repudiation." The town is also accused of "improper post-bid communications" between town representatives and "bidders other than Jody" and "after-the-fact manufacture of bid criteria" that did not play a role in awarding the contract.

Jody attorney Daniel O'Connell of Patchogue declined to comment. The Babylon town attorney's office issued a statement that Jody Enterprises is precluded from suing because of its "submission of false documents, false testimony at the special meeting, failure to disclose business relationships, and alleged criminal conduct by key management and Gallone."