Two prominent Denver public relations firms are entangled in a public dispute over their relations.
At issue are bold claims of incompetence, bad faith and disparaging political remarks. At stake are hard-earned reputations and hundreds of thousands of dollars.
Novitas Communications is one of the larger PR firms in the city, and did $1.29 million in revenue in 2021, according to a survey. It was founded in 2008 by Michelle Lyng, a Republican.
Aiello PR & Marketing, meanwhile, has amassed some of the city’s biggest clients, including Union Station and Oakwood Homes. It was founded in 2000 by Wendy Aiello, a Democrat.
Details of their doomed plan to merge are spelled out in Denver District Court documents.
In late 2020, Lyng and Wendy Aiello met to discuss the idea of Novitas buying Aiello PR, so Aiello could retire. Novitas claims that a purchase agreement was approved verbally; Aiello PR denies that. Regardless, the two began working together as a joint venture.
“Aiello is merging with Novitas,” Wendy Aiello emailed Oakwood Homes in March 2021. “It’s been in the works for months and we’re currently working together, but we have not officially announced it to the world … Novitas is impressive and I’m proud to be part of their posse.”
The pride would not last. Aiello soon discovered that Novitas had nominated itself for several of the awards it won and touted. And after Southlands Mall, an Aiello client, was transferred to the new joint venture, Aiello PR didn’t receive the 10-percent cut it was supposed to.
The same happened after another Aiello client, Celebration Chevrolet in Aurora, was transferred to the joint venture. Worse yet, Novitas’ “poor work, lack of resources and lack of experienced employees” led the car dealership to fire them both, according to Aiello PR.
For its part, Novitas claims it was Aiello PR that “missed calls with clients and, when attending calls, was unprepared for the call, leaning on Novitas to perform all work.” Novitas says it is owed $360,000 for doing work that Aiello PR was unfairly paid for.
An attorney for Novitas said it’s not uncommon for companies to nominate themselves for awards and Novitas won its fairly. The attorney said Novitas made Aiello a fair offer regarding the Southlands and Celebration fees, which Aiello has refused to accept.
At times, the differing social views of Lyng and Aiello were on display, according to court documents. Aiello claims that Lyng said she “hated Black Lives Matter” at a business dinner, leading Aiello to admonish her for a perceived lack of professionalism. A Novitas attorney says Lyng’s criticisms of BLM were fair and made at an internal Novitas holiday party.
In early 2022, Aiello and Lyng met with executives at VareCo, an Aiello client that she describes in court documents as a developer turning distressed hotels into low-income housing. Because Lyng made dismissive remarks about VareCo’s business, Doyle chose not to hire the joint venture, according to Aiello. A Novitas attorney denies this and says Lyng is an advocate for affordable housing.
“Basically everything in that lawsuit is incorrect about our business model,” said Dianna Talty, director of marketing at VareCo. “We are not a developer, we do not purchase hotels to repurpose them for housing for low-income or homeless people.”
“And we didn’t choose to not work with Aiello PR due to comments that were made. That’s 100-percent incorrect,” she added.
Talty says VareCo has an in-house marketing division and therefore didn’t see a need for outside PR help last year. She was surprised to read Aiello’s claims about insulting remarks.
“After I read that in the lawsuit, I talked with our team. I was actually present in that meeting as well and none of us recall any dismissive remarks or anything insensitive,” Talty said.
Aiello also accuses Lyng and Novitas of stealing a client away. Oakwood Homes was an Aiello client until it became a joint client in early 2022. After disparaging Aiello to Oakwood, Novitas convinced the homebuilder to switch PR firms ahead of a legal dispute over the Reunion Metropolitan District, without paying Aiello its share of the profits, Aiello PR claims. A Novitas attorney denies their client disparaged Aiello or stole Oakwood away.
(After BusinessDen first reported on the dispute at Reunion Metro District in Commerce City, Lyng called a BusinessDen reporter on behalf of Oakwood Homes.)
Both sides agree that by July 2022, the joint venture was a failure and had to be dissolved. Novitas sued Aiello PR in December and Aiello PR countersued Novitas on Feb. 8.
Novitas wants a Denver jury to make Aiello PR pay $330,000, plus interest and attorney fees, for breach of contract. Aiello PR wants a jury to make Novitas pay an undetermined amount for breach of an agreement, unjust enrichment, fraudulent inducement and bad faith dealing.
“Candidly, this is a boring case; a business deal that went bad,” Novitas attorney Christopher Murray with Brownstein Hyatt Farber Schreck said in an email. “Aiello PR is attempting to retain hundreds of thousands of dollars paid to it for work performed by Novitas. The rest, including Aiello’s attempts to disparage our client, is a distraction.”
Murray said his client “has respect for the legal system and will therefore not litigate this through the media going forward” but added that some Aiello PR claims “will be proven false.”
“There is a reason that Novitas has been tapped to work on high-profile issues such as the Haitian presidential assassination, the Miami bridge collapse and overseas hostage crises,” he said. “It’s because its leadership is experienced and its judgment is second-to-none.”
Editor’s note: A reference to a survey ranking Novitas has been changed to better reflect the survey methodology.