Crossville Chronicle, Crossville, TN

Area News

February 17, 2012

Water stays on at Renegade

Judge keeps injunction in place for 60 days; residents required to bring pay past due bills current

A Chancery Court judge on Tuesday ruled to extend an injunction for another 60 days, preventing owners of the water system from turning off service to customers on Renegade Mountain.

However, Chancellor Ronald Thurman also ruled that customers are to pay their water bills to the Laurel Hills Condominiums Property Owner's Association, retroactive to June 2011 at a half-rate of $43.20 per month to the current date within 20 days. Thurman's ruling also states the customers will continue to pay the monthly rate of $43.20 until further notice from the court or relief from the Tennessee Regulatory Authority (TRA). That rate is half of what Laurel Hills Conominums POA was requesting.

The ruling was made in Cumberland County's Chancery Court during a hearing over a temporary restraining order, or injunction, for the Laurel Hills Condominiums  POA, which owns the water system on Renegade Mountain. Members of the Renegade Mountain Community Club filed for the injunction to keep their water service on after the supply was cut off to 84 condominium units and three homes two weeks ago.

"At this point, it's all we could ask for. We will continue to have water service and pay for water service that is not at an unreasonable rate until we can get the water rate dispute figured out. It's all we could hope for," Renegade Mountain Community Club President John Moore said after the hearing.

Thurman also ruled in favor of a request by Laurel Hills Condominium POA attorney Don Scholes that the plaintiffs, Renegade Mountain residents and community club members who filed suit, post a $10,000 bond protecting the water system.

During the hearing, Thurman stated that he would grant the continuance of the injunction for 60 days and that he felt "the Laurel Hills water system rate should be regulated by the TRA."

He then ordered both parties to contact the TRA to determine if the system could come under the TRA.

"This will give some relief to both parties," Thurman said.

He also allowed attorney Melanie Davis of Kizer and Black, Attorneys, LLC, who is representing Renegade Mountain Community Club, five days to amend the complaint and add all residents who receive water from Laurel Hills Condominiums POA to come under the ruling as well.

If the residents, or plaintiffs in the suit, do not pay their bills, then the Laurel Hills Condominiums POA has the right to file suit against individuals in General Sessions Court in order to obtain those fees.

"Since there is no mechanism to cut off individual service, this is the only choice I have," Thurman said.

The water system serves all the resident's homes and condominiums on Renegade Mountain, however there are no meters or valves in place to turn water service off for individuals. There are some valves that can be manually turned off to different areas, which was the case when the water was shut off to the 84 units at Cumberland Point Condominiums.

Problems between the two groups began to escalate Jan. 27 when Laurel Hills Condominiums POA, the current owner/operator of the private water distribution system on the mountain, planned to suspend electric service to the water system on the Mullinax Dr. pump house.

Residents were able to transfer the power service from Laurel Hills Condominiums Property Owners Association into the name of the Renegade Community Club in order to keep continued water service.

However, Laurel Hills Condominiums POA turned the valve off to the water supply for the Cumberland Point Condominiums.

Nashville Attorney Donald Scholes, who is representing Laurel Hills Condominiums POA, said his clients had no choice because they didn't know what to do.

"The residents banded together and weren't paying their bills and you can't just not pay and expect to have water," Scholes said.

He also revealed to Chancellor Thurman that Laurel Hills Condominiums POA had acquired ownership of the water system and invested a lot of money working with Tennessee Department of Conservation (TDEC) to bring water quality back up to state standards after a suit had been filed by the state against the previous owners of the water system.

"The water system was neglected and (Laurel Hills) worked with TDEC to get it back into shape ... they undertook the necessary steps to have a quality water supply," Scholes said.

Court records show that case against prior owners of the water system was dismissed as of Feb. 1, 2012, from 12th District Chancery Court after a settlement was reached between TDEC and J.L. Wucher Company, LLC; Old South Renegade, LLC; Renegade Mountain Water Systems, LLC; and Joseph L. Wucher, individually.

According to the Tennessee Attorney General's office, TDEC agreed to voluntarily dismiss the case against the defendants (the prior owners of the Renegade water system) as a part of a settlement of the case. The settlement involved repairs of the system and payment of $11,000 in civil penalties to TDEC, along with court costs.

Thurman said that, prior to Tuesday, he was not aware of the prior case and the water quality issues.

Scholes told Chancellor Thurman that it was several months of non-payment, not just one month.

"You have to have revenue to run a water system," Scholes said.

Plaintiff attorney Melanie Davis called the only witness during the hearing, Ron Hill, who serves as president of the Cumberland Point Condominium Association board.

Prior to taking the witness stand, Hill asked for a cup of water.

"Well, that's what we're here for," Chancellor Thurman said.

Thurman's response evoked a chorus of laughter from the dozens of Renegade Mountain residents who attended the hearing.

During his testimony, Hill said that Darrell McQueen, the hired operator of the Laurel Hills water system, brokered a deal with Laurel Hills Condominiums POA for the Cumberland Point residents to pay half — a rate of $43.20 — from June 2011 until Dec. 30, at which time it would be re-evaluated.

Hill testified that in October 2011, the residents received a letter from Laurel Hills Condominiums POA stating the rate of $86.40 had been verified and the residents were to pay that rate retroactive to June 2011.

"We did not agree to pay that," Hill said. "It was an excessive rate. We lost dues paying members and couldn't cover that cost."

He testified that the rate for the Cumberland Point Condominium Association would go from $1,680 per month to $7,200 per month.

Out of 84 units, there are only 11 units occupied in the Cumberland Point condominiums.

Hill testified that they tried to negotiate with Laurel Hills Condominiums POA and its board of directors, Michael McClung and Phillip Guettler.

Several residents continued to pay at the half-rate of $43.20 via check, with a rider on the back of the check which stated cashing this check constitutes payment in full. Therefore Laurel Hills Condominiums POA did not cash the checks that were submitted for payment.

On Feb. 2 Laurel Hills Condominiums POA turned the valve off for the Cumberland Point Condominiums and three other residences.

Further testimony revealed Hill and McQueen and the group devised a plan for an alternative water source and contracted with a trucking company to bring a tanker of water to the condos and a pump and hose was installed to the lines to supply water.

Hill said they were not aware that was considered an improper connection and they dismantled the alternative system immediately after TDEC representatives told them to do so.

Attorney Davis contended that Laurel Hills Condominiums POA was using an extortion technique against the residents to "pay a 300 percent rate increase or have your water shut off ... the people have no voice ... they have no vote on the (Laurel Hills Condominiums POA) board."

She also said the residents weren't trying to get away with free water and they were willing to pay for water at a reasonable rate.

Attorney Scholes contended that aside from the Cumberland Point Condominums there were 50 other customers who were not paying for water. He said Laurel Hills Condominiums POA was not abandoning the water system — they only shut down water for four customers — "None of whom paid their bill," Scholes said.

"You can't just not pay and expect to have water — if they're not paid, they can't operate," Scholes said.

Both sides agreed if the water remained off there was irreparable harm, but Scholes contended the plaintiffs were creating their own irreparable harm.

"There's no ground to continue the injunction. The remedy is to pay the water bill ... The request to continue (the injunction) should be denied. The customers can pay off their bills so water service can continue," Scholes said.

Attorney Davis said the group should be given at least 60 days to research and possibly obtain alternate water sources or plans.

Thurman said he could see both sides of the issue and felt the water system should be regulated by the TRA and continued the injunction for 60 more days of water service.

Thurman said, once a TRA hearing is held, the rate could be worked out.

"We'll let the chips fall where they may. The bill could be higher, it may be $100," Thurman said.

Both parties are to contact the TRA and if the TRA does not find the Laurel Hills water system should be regulated under its authority, then the matter will be brought back to Chancery Court and the fee dispute will be settled there.

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