Crossville Chronicle, Crossville, TN

Area News

April 20, 2013

Tansi resident files class action suit against POA

CROSSVILLE — A class action lawsuit has been filed by a member of the Lake Tansi Property Owners Association against the POA claiming negligence in administration of POA funds and assets.

Mary Aggers filed the suit April 12 in Cumberland County Chancery Court and names members of the board of directors, suing them in their official capacity as board members. Those named in the suit are Jerry Davenport, James Hellem, Michael E. Ferry, Edward Liskovec, Marlene Reitz, Richard Holton, Dick LeClair, Ed Yoder, Kris Burke, David Kerr, Kenneth Qualls and Claude Coyne.

The suit alleges the board of directors of the POA transferred assets negligently to Tansi Waste Management, Inc. (TWMI). The assets transferred were rights to utility engineering services contracted between the POA and Environmental and Engineering Services; a lease of about one half acre of land for 99 years at a rate of $1; and $125,000 in cash.

It alleges a conflict of interest due to the fact Coyne was a member of the board of directors and then presumptive president and CEO of TWMI.

The transfer of assets was made without a two-thirds majority vote of the membership required by TCA 48-62-102, sale of assets other than in regular course of activities, and, according to the suit, illegal.

Also at issue is a sewer plant purported to be capable of processing 300,000 gallons per day, but which is only capable and permitted for 50,000 gallons per day.

On September 1, 2009, TWMI transferred all of its assets to Tansi Sewer Utility District (TSUD). This was done negligently, the suit states, and without adequate consideration. At the time of the transfer, the suit states Coyne endorsed the resolution as a member of the TWMI board while he was general manager of Tansi Sewer Utility District, a paid employee.

The suit states TWMI was a wholly owned subsidiary of the POA and the transfer of assets was made without approval of two-thirds of the POA membership, as required by law.

The POA had obtained a $1.2 million line of credit from First National Bank to finance the construction of a sewer treatment plant and collection system to serve the POA amenities. These assets were transferred by TWMI to TSUD Aug. 26, 2010 "without adequate consideration."

TWMI made one payment on the loan in the amount of $187,438.15, with $1.275 million owed as of July 31, 2010. The loan was unsecured.

According to the suit, TSUD agreed to pay the POA on condition of issuing public bonds.

TWMI also allowed TSUD the right to use the office at 7004 Ute Lane, purchased by TWMI for $100,000 and financed by a loan from First National Bank.

"The Plaintiff alleges that the agreement of Tansi Waste Management to pay the Defendant was conditional, speculative and illusory. Tansi Waste Management does not have sufficient assets to repay this debt. The Plaintiffs aver that a public entity such as Tansi Waste Management cannot lawfully pay a private debt."

The actions of the POA board were negligent, the suit states, because the directors failed "to exercise the care an ordinarily prudent persons in a like position would exercise under similar circumstances."

That has subjected plaintiffs to potential liability "for membership assessments to cover losses, sale of POA assets to cover losses and has caused a diminution in the market value of properties owned by the member class."

The suit seeks damages against the defendants in their official capacities of $1.2 million, as well as the cost of legal fees in the matter.

J.Cott McCluen, of Harriman, is the attorney listed on the suit.

1
Text Only
Area News
  • rendezvous.jpg TSRA starts spring off with paddling trips

    About 150 members of the Tennessee Scenic Rivers Association (TSRA) recently gathered April 2-6 in Crossville at Camp Nakanawa for the Annual TWRA Rendezvous.

    April 19, 2014 1 Photo

  • Panel recommends using third-party billing for old EMS bills

    The budget committee approved hiring the same third party billing company to help go through older EMS ambulance service bills to resubmit them to help the EMS department get caught up with billing collections.

    April 19, 2014

  • Sales tax collections down

    Cumberland County Finance Director Nathan Brock reported to the Cumberland County Budget Committee that local option sales tax collections have fallen below budgeted projections for the 2013-'14 fiscal year.

    April 19, 2014

  • Motion to toss evidence in burglary denied

    A defense motion to have evidence seized by deputies searching for a man who fled warrant service thrown out failed when deputies testified they had oral permission from the defendant's son to search the residence the father and son share.

    April 18, 2014

  • donate life.jpg Organ donation gives man new lease on life

    Travis Hodges has a new lease on life, thanks to a selfless gift a young father made the year before.

    April 18, 2014 1 Photo

  • Fireworks, sign change get council OK

    While the April Crossville City Council meeting was generally a calm one, there were some fireworks on the agenda.

    April 18, 2014

  • quackers at the library.jpg Spring jamboree

    April 17, 2014 1 Photo

  • Suspect charged in Sportsman Club break-in

    A Crossville man has been arrested and charged in connection with the burglary of a shooting club's building in the county that occurred last week, according to arrest reports.

    April 17, 2014

  • Panel discusses auditing hotel/motel tax collections

    Commissioners on the budget committee discussed the possibility of auditing hotels and motels in the county regarding the collection of hotel/motel tax collection figures being down.

    April 17, 2014

  • Repent burglar must serve time

    Some defendants cry, because they get caught, and others are tearful with remorse. No one in the courtroom doubted Robert Killeen's sincerity when he apologized to his victim, his loved ones and supporters for committing crimes against an elderly widow, stealing the money her late husband left her.

    April 17, 2014

Marketplace Marquee
Parade
Must Read
Section Teases
Seasonal Content
AP Video
Raw: Greeks Celebrate Easter With "Rocket War" Police Question Captain, Crew on Ferry Disaster Raw: Orthodox Christians Observe Easter Rite Ceremony Marks 19th Anniversary of OKC Bombing Raw: Four French Journalists Freed From Syria Raw: Massive 7.2 Earthquake Rocks Mexico Captain of Sunken SKorean Ferry Arrested Raw: Fire Destroys 3 N.J. Beachfront Homes Raw: Pope Presides Over Good Friday Mass Raw: Space X Launches to Space Station Superheroes Descend on Capitol Mall Man Charged in Kansas City Highway Shootings Obama Awards Navy Football Trophy Anti-semitic Leaflets Posted in Eastern Ukraine Raw: Magnitude-7.2 Earthquake Shakes Mexico City Ceremony at MIT Remembers One of Boston's Finest Raw: Students Hurt in Colo. School Bus Crash Raw: Church Tries for Record With Chalk Jesus Raw: Faithful Celebrate Good Friday Worldwide Deadly Avalanche Sweeps Slopes of Mount Everest
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Weather Radar
2014 Readers' Choice