Crossville Chronicle, Crossville, TN

July 13, 2013

Mediation set for Tansi suits

By Heather Mullinix
Assistant editor

— Parties in the various lawsuits surrounding the Lake Tansi sewer system will gather next week in an attempt to settle those cases. Also on hand will be the Crossville City Council, which has scheduled a work session for the mediation sessions Monday and Tuesday.

Four cases are included in the order for a judicial settlement conference. Those include:

•State of Tennessee vs. Dana Lee and Sharon Kay Crockett, filed in Cumberland County Chancery Court, to force connection of 24 condominum units to an available public sewer system;

•Mary Aggers vs. Lake Tansi POA, Inc., et al, filed in Cumberland County Chancery Court, with claims of negligence in administration of POA funds and assets;

•Lake Tansi Village POA, Inc., et al vs. Tansi Waste Mangement, Inc., et al, filed in Cumberland County Chancery Court, seeking default judgment against TWMI for nonpayment of loans and seeking to nullify transfer of TWMI assets to the Tansi Sewer Utility District. TWMI has since filed for bankruptcy protection in federal court; and

•Mary Aggers, et al vs. Lake Tansi Village POA, et al, filed in Cumberland County Chancery Court, seeking dissolution of the Lake Tansi POA following allegations of illegal, oppressive or fraudulent actions and that corporate assets were misapplied or wasted.

Each party was directed to be present and ready to participate in the settlement mediation in good faith. The attorneys for each party were directed to furnish a settlement brief by Friday at noon that would include the issues of the individual case needing resolution, brief on legal questions presented, statement on the strongest and weakest points of each case, statement of the last offer made toward settlement and a statement of which settlement might be appropriate and possible. Those settlement briefs are confidential and the contents are not to be disclosed to any person, including the judge who may later try the cases.

The order was signed by John Maddux, circuit judge, July 8.

In addition to the parties of the lawsuits, the Crossville City Council will be in attendance and a work session has been called for July 15 and 16 at Brown Elementary School.

During its regular monthly meeting Tuesday, City Attorney Kenneth Chadwell said District Attorney General Randall York had requested the city council and attorney be present for and participate in the settlement conference. The district attorney is representing the state of Tennessee in one of the legal actions. It was also noted representatives from the state comptroller of the treasurey would be at the meeting along with the federal bankruptcy trustee overseeing the TWMI bankruptcy action, and others that may be connected to the myriad of legal issues.

Councilman Pete Souza questioned why the city would be asked to be involved in the mediation proceedings as it was not party to any lawsuit related to the Tansi sewer system.

"The presumption is we're going to take over or try to take over the utility district there," Souza said.

He renewed a prior motion to rescind Crossville Mayor J.H. Graham III's authority to negotiate on matters related to Tansi Sewer Utility District and that no city funds be spent on legal services related to TSUD or South Cumberland Utility District, which provides water service to the area, without council approvel. Councilman Jesse Kerley supported the motion.

"I don't think the city has any business in Lake Tansi," Kerley said. "It's lose-lose for the citizens of Crossville by us getting involved. If we're forced to get involved, they need to offer something to the citizens of Crossville if we've got to pick up the pieces of this big mistake that they've made."

Souza also questioned possible conflicts regarding business dealings between Graham and Chadwell with Millard Oakley, who serves on the board of directors for First National Bank of Tennessee and is the principal shareholder of the bank. The $1.3 million line of credit the Tansi POA allowed TWMI to access was through First National Bank.

Graham said he did not have any conflicts, adding he did not own property in Lake Tansi, nor did he have any direct ownership of the bank or partnership with Oakley, stating he was just a "good friend."

Graham said, "All we've been asked to do is go out and listen. That's all I understand that the general wanted us to do."

Chadwell said he did not have a conflict, direct, indirect, or otherwise, in participating in the mediation.

"I think that's just a red herring," he said.

He added he took no position on whether or not the city should consider any type of merger or consolidation with the utility districts involved in the suits.

But as for why the city was invited, Chadwell said, "The city is the only entity that has the resources, the ability, the history, whatever you want to throw on that basket, to run a sewer system of any size and do it efficiently and do it well," he said.

He added the mediation was non-binding and the city council had the right to come back in a meeting and deliberate and vote on any proposals that came out of the mediation sessions.

Souza's motion failed 2-3, with Souza and Kerley voting in favor and Graham, Councilman Danny Wyatt and Councilman George Marlow voting against.