Photo by IntangibleArts

Despite a foreclosure auction slated next week for the property best known as the Florida Ave. Grill, owner Imar Hutchins told us not to worry because “The Grill is not closing.”

Now it’s clear why Hutchins maintained the historic restaurant was staying open, despite the lender foreclosing on the property. He’s suing the lender, ATS One Holdings Corp., alleging a “pattern of predatory lending, malicious behavior, misrepresentations, threats, and deceptive practices.”

The Washington Post first reported on the lawsuit Hutchins filed, which asks the D.C. Superior Court to issue a temporary restraining order to stop the auction, scheduled for January 18.

The suit outlines how “defendants conducted a fraudulent scheme to entrap [Hutchins] into highly overpriced financial transactions with extremely onerous terms.”

Hutchins bought the Florida Ave. Grill, which celebrated its 70th anniversary two years ago, in 2005.

The suit claims that Hutchins paid his mortgages with ATS One Holdings Corp. and its two principals, Ari Jay Cohen and Peter Aytug, every month since entering into the $200,000 and $50,000 loans in May 2011. However, in the summer of 2015, the suit says that the monthly payments began getting mailed back as undeliverable, and online payments were also returned.

Hutchins never received a response when he tried to find out where he could send the payments, according to the suit. Instead, on January 19, 2016, ATS “used [Hutchins’] alleged nonpayment of the mortgages as a pretext for declaring a default and very aggressively threatening acceleration, foreclosure, and claiming default interest.”

The suit goes on to say that the defendants wanted Hutchins to pay them “inflated” legal fees of $40,014.17 or face foreclosure. The grill’s owner said that he also offered to pay $23,55.30, the amount of all payments due, but was rebuffed.

From January 2016 onward, Hutchins said he started sending ATS certified checks on a monthly basis, and official checks are exhibits in the suit. The property was valued at $727,280 in 2016, with a proposed value of $789,830 in 2017, according to the D.C. Office of Tax and Revenue.

The filing also includes press releases from the New York Attorney General’s office outlining a lawsuit against Northern Leasing Systems, of which ATS is allegedly a subsidiary, for “trapping small business owners with deceptive practices.”

This isn’t even the first time that Hutchins has had to deal with threats of foreclosure amid a payment dispute with an aggressive lender. In 2009, the New York Times chronicled a case that he won against a bank that sought to foreclose on a Harlem apartment building that Hutchins owned.

Councilmember Brianne Nadeau of Ward 1, where Florida Ave. Grill is located, called it “very concerning” on Twitter, and said both D.C. Attorney General Karl Racine and the D.C. Department of Insurance, Securities, and Banking are investigating.

Alan MacDonald, the lawyer representing ATS, declined to comment about the lawsuit, other than to say, “obviously my client is opposing it.” The court hearing will take place on Thursday morning.