Millionaires Clash Over Shadyside Mansion

Despite all the Tenth Commandment strictures to the contrary, coveting the mansion next door has led millionaire executive Tony Petrello to years of depositions and lawsuits.

Similar things have been said about him by those entwined in the Shadyside dispute, though this wrangle would have one overarching difference: Nothing would get settled out of court. And even if it, too, had sprung from a "breached contract," the suit wouldn't stay that way for long. Morphing into a discrimination complaint, the emerging contention became perhaps Petrello's widest-ranging and most-ambitious personal litigation. But only after a certain trigger was tripped — Carena, the Petrellos' disabled daughter.

Tony and Cindy, who met in New Haven while Tony was at Yale, tried for many years to have children, but couldn't, according to court testimony. Then, in the summer of 1997, Cindy, a petite former New York tap dancer, got pregnant and six months later delivered Carena who was born with physical and neurological problems.

Despite this, Carena showed improvement up until when, at age three, she suffered a stroke and lost her ability to speak. Her parents later erected in their courtyard a small bronze statue of Carena with Cindy in which the child almost looks healthy, even ordinary — "Carena at her best," attorney Sam Stubbs said. "Carena is a testament to the endurance of a pure soul," Petrello said in testimony.

Tony Petrello's house (left) and Rahul Nath's home (right) have little space between them. If Petrello ultimately succeeds in buying Nath's house, he'll have the largest estate in Shadyside.
Photo by Patrick Bertolino
Tony Petrello's house (left) and Rahul Nath's home (right) have little space between them. If Petrello ultimately succeeds in buying Nath's house, he'll have the largest estate in Shadyside.
Tony and Cindy's art collection is renowned in Houston...
Photo by Patrick Bertolino
Tony and Cindy's art collection is renowned in Houston...

The stroke's aftermath, however, was grueling. "In the world of families who have children with severe disabilities, they feel all alone," said Stubbs, who himself has a son, 24, with severe autism. But, Stubbs said, Petrello never discusses his daughter. "He's shy," Stubbs said. "Tony's a kind, warm, gentle man. But, like most who are as intelligent as he, he doesn't have a lot of chit-chat."

True, Petrello's money has been far more public than the man. It has splashed across Houston's opera and theater circuit, into local and national political coffers, and finally, in his and Cindy's largest contribution, toward the Neurological Research Institute at the Texas Children's Hospital to help cases like Carena's. They pledged $7 million, and Tony chaired the finance committee to build the center, ultimately netting more than $250 million. In February of 2011, Tony and Cindy received the Woodrow Wilson Award for Public Service.

There has, of course, been another use for his money: civil litigation suits. Numerous people estimated the Shadyside litigation alone has cost Petrello at least $2 million — and the lawyers' fees just keep coming. This, oddly enough, for a house Petrello wouldn't pay an extra $100,000 for and meet the Pruckas' asking price of $8.3 million.

But there was one more twist. And that was the City of Houston.
_____________________

Matt Prucka couldn't make sense of it. What had begun as something extremely ordinary — the sale of his house — had somehow turned into lawsuits filed in state and federal court against him and his wife, Sheri, and accusations that they and the Naths had conspired to discriminate against a disabled girl. "This is crazy," the Pruckas said to each other one night. Matt said, "This is all just a game to Petrello."

For one, the original lawsuit over an oral breach of contract was deeply confusing. Verbal agreements, even if there had been one, don't mean anything in Texas real estate — everything's got to be written. According to the state's statute of frauds, which governs land deals, a handshake just ain't enough. But what Prucka may not have understood then was that the original complaint didn't necessarily require merit, Sam Stubbs said. It just had to get them into depositions and afford David Berg, Petrello's long-time and immensely expensive lawyer, a crevice. Just a crevice. And then let Berg do his thing.

The discrimination allegations were "100 percent David Berg being creative," one Shadyside resident familiar with the litigation said. "David Berg is so fabulously skilled he could get you to say you have 12 toes...This never had anything to do with Carena. Nobody thinks it had anything to do with Carena in the neighborhood. Nobody.

"These houses turn over once in a lifetime and if you miss the opportunity, you're screwed. That house will never come up again. If you want to control your destiny, you have to buy the house. You got to get it and if you don't get it, you're screwed."

The resident later added: "It doesn't matter if you win (the case). It's a war of attrition."

The first battle was on May 14, 2008, when Berg launched a circuitous line of inquiry on Prucka. Prucka mentioned the home for Sheri was "enchanted." Things then picked up, question melting into question, later culminating in a very direct exchange. Prucka told Berg that Petrello had "a strike" against him because he wanted to change the home's "architectural integrity" by making it handicapped-accessible with an elevator, wider hallways and larger bathroom for Carena. He said his preference had been to sell to someone else.

With that, Berg apparently had everything he needed for a discrimination suit. "Berg had to figure out a plan B," Prucka's lawyer, Tom Fulkerson, said. "I don't know if he knew it going into the deposition, or stumbled into it." The breach of contract complaint vanished, and puzzling things began to happen.

The city got involved when the city attorney filed a criminal citation against Prucka for alleged discrimination against a disabled person under the fair housing ordinance — a first for the city, which had ostensibly passed the law in 2006 to protect the poor. The penalty carried a whopping fee of $500 — insignificant compared to the $8.3 million mansion at stake in the civil litigation. Later, after Annise Parker took office, the complaint was dismissed in 2011, and today the administration questions why the city had pursued the case, a spokesperson said. City Chief Prosecutor Randy Zamora, declined comment. Gordon Quan, who championed the ordinance while on City Council, also expressed surprise the city had filed the complaint. "The whole law was about poor people getting stomped on," he said, adding that the city wouldn't have even recouped its lawyers' fees with a $500 penalty. "I thought it was very novel they used it on some wealthy person, or maybe some smart lawyer decided we can hit them on this."

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21 comments
BMJ247
BMJ247

Petrello bought the adjacent house at 18 Sunset and tore down the historic home there.  That's why Prucka thought Petrello might do the same with his.  But that didn't matter when he got a full price cash offer from the Naths.  Petrello recently bought another house at 1816 Rice for $4.5 M.  He purchased it through his friend Avi Ron's corporation, CAC Campus Holdings.  He had previously made an offer of $4.9M through realtor Laura Sweeney at John Daugherty Realtors.  After the offer was accepted he screwed her over too and anonymously used the co. to buy it for less.  Such a class act!

2012houstonproud
2012houstonproud

 @BMJ247  HCAD shows 1816 Rice as having a homestead exemption.  How can an LLC qualify for a homestead exemption?  

2012houstonproud
2012houstonproud

 @BMJ247 "No one has lived in the Petrellos' house for nearly three years."  Yet HCAD shows both 10 Remington and 18 Sunset as having a homestead exemption.  How many homestead exemptions can someone have?  Don't you have to live in the house to qualify?  Doesn't sound fair.  

Anon2012
Anon2012

I used to own a house on Dora which is the street that backs up to Petrello's property. In fact, most of the traffic to and from Petrello's house uses Dora for access. Dora street is very prone to flooding. During Allison and Ike, and other big storms, the street could easily be under five feet of water in no time at all. Then it would take forever to drain - resulting in cars getting flooded, garages getting flooded, etc. 

 

It seemed as through Petrello's house was always under renovation as traffic to the house was constant. During one of these renovations, they installed a pump that cleared his property of water during storms. I found this out the hard way - during a bad storm, I was looking out in front of my house to see where the level of water was reaching, then looked down the street towards his property and saw a gusher of water. I walked over to investigate, and yeup, every few minutes, there would be this gusher coming from a pipe installed underneath a new sidewalk coming straight from his property. I've never met the man, but knowing that the street he uses on a regular basis, Dora, floods easily and then installing a pump that forces even more water onto the street not only makes him a bad neighbor, but also a DICK of monumental proportions. 

2012houstonproud
2012houstonproud

Anon & Insider.  What lot are you finding that Petrello purchased from Ms. Hobby?  When I search for the owner name "Petrello" on HCAD.org all that shows up other than 10 Remington is 18 Sunset. That part of Sunset is  too busy and too public for the daughter's place anyway if somebody had the money Petrello supposedly has, and  HCAD shows that Petrello purchased that property from a C M Hudspeth (not Hobby).   (I drive through that section of Sunset a lot, and it is often basically a traffic jam at peak times.  Still nice because of being right by Rice, but not in the zone of being super nice.)  Has Petrello used some sort of a front company for another purchase?  

anon
anon

He already bought connecting property from ms hobby as mentioned below. his insurance doesnt cover the amount of damage endured to his house because he was cheap and he didnt think his house would burn down... i assume theyre waiting for insurance money which if it depends on them and their slacking group of servants to finish....will take forever... ive never done an insurance claim as high as theirs must be.

private1701a
private1701a

Duh. CapObvious.  Petrello’s probably actually leveraged to the hilt and nearly broke.  Happens to lots of super high income guys that try to keep up appearances.  Otherwise he would have just written checks and moved on.  If you really had that kind of wealth, would you live in a hotel or a on a huge estate in a hyper exclusive gated community?  Yep.  Out of dough.

thecaptobvious123
thecaptobvious123

If Petrello really wanted the Nath’s property for his daughter and was going to renovate the house anyway as he said, why doesn’t he just purchase some other contiguous property and move on  with his life?  Just asking.

miss_msry
miss_msry topcommenter

Shouldn't the hed have read:  Millionaire Mansion Mash?

Insider.
Insider.

Ms Hobbys land was purchased by Mr Petrello, the house was torn down so that he can use it for gardens and a large poolhouse for parties. He already has plenty of land to build another house on and he could build it exactly as he wanted. This is a case of a very grumpy angry wealthy man not getting his way and USING his poor daughter as the "reason." Hes just a sore looser and refuses to not get his way. 

wearealltrash
wearealltrash

"Everyone, listen! Shadyside could be cool and groovy if we treated each other fair! It's Petrello ! He's made us all into a pyramid, and he put himself on top!"

johnjay739
johnjay739

Hmmmm ...... I've wondered why someone called Petrello a "modern day Satan" in the Vanity Fair story.  This story may provide insight.    I voted for Bill White for mayor as well as governor, but after finding out he took money from Petrello, he wouldn't get my vote again.

miss_msry
miss_msry topcommenter

Oh, John Bradshaw, sneaking into Montrose to eat ice cream while perusing the skin magazines at Hollywood.

Hilda311
Hilda311

Sounds like another reality show... Not interested but thanks for letting me know.

 

reedpappy
reedpappy

Shadyside was originally a neighborhood of friends, where everyone knew everyone prior to moving there.  The original owners were among the wealthiest and most powerful people in Houston.  The restrictions required that anyone wishing to move to the exclusive neighborhood in the future would have to have unanimous approval of the other residents.  The purpose of this was to keep riff-raff out -- including people of the caliber mentioned here.  Restrictions also prohibited external architectural changes, unless unanimously approved by residents.  Mrs. W.P. Hobby wanted to make some changes to her home which were vetoed by at least one other resident.  She responded by having her house torn down and leaving the land vacant, while moving elsewhere.  She has since passed on, and I have not heard what became of the land. 

Ronbo12
Ronbo12

This is a case of Bullying, just like the stuff that goes on in grade schools. This guys theory is "my way of my way" and uses his $$$ to enforce his will. I have alot of compassion for his situation with his daughter but his inability to accept life's dissappointments discredits his achievements and contributions.

mjhellund1
mjhellund1

It's a bitch out there for a rich guy. I say, the one with the car elevator wins. It's only fair.

Anse
Anse like.author.displayName 1 Like

I just hope Romney wins and gets these guys a tax cut pronto. Imagine the job creation in the legal industry!

Modernsnob
Modernsnob

@HoustonPress Wow, better than a made for TV movie..long reads is an understatement. I had to make notes to stay connected #longreads

Discgolfer22
Discgolfer22 like.author.displayName like.author.displayName 2 Like

I hope I don't get sued for this, but what an idiot!!!!

 
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