Legal Bill Rising for Conway Corp Over Land Issue

by Mark Friedman  on Monday, Nov. 4, 2013 12:00 am  

Karen Cooper said her 17,620 SF of farmland is worth more than Conway Corp.’s offer of $881. (Photo by Jason Burt)

Instead of paying a Faulkner County woman the $10,000 that she wanted for 17,620 SF of farmland, Conway Corp. has paid a Conway law firm more than $50,000 to represent it in a lawsuit over the disputed amount.

And the case, which has already been to the Supreme Court of Arkansas, isn’t over yet.

The issue of how much the land is worth and other damages is still pending in Faulkner County Circuit Court. A court date hasn’t been set.

“Ultimately, the ratepayers are bearing the cost of increased litigation because Conway Corp. is defending this,” said attorney Kent Walker of Little Rock, who is representing the landowners, Karen Ramsey Cooper and her husband, Jack Dowell.

Conway Corp. acquired 34 easements and crossed 41 parcels for a water project it was constructing, Conway Corp. CEO Richard Arnold said in a statement to Arkansas Business. He declined to be interviewed for this story.

“Only Ms. Cooper refused to accept the valuation we had used on all the other properties and, in fact, wants an amount which we cannot justify under any circumstances,” Arnold wrote. “This was the only property on which we had to use eminent domain to facilitate installation of the water main.”

Cooper said in court filings that she was offered $881 for her land.

If Cooper and Dowell win their counterclaim, Conway Corp. could be stuck paying Walker’s fees as well.

Meanwhile, two attorneys from the Millar Jiles LLP firm of Conway, which is representing Conway Corp., are facing contempt charges from the state Supreme Court for allegedly attempting to collect money from Cooper and Dowell even though they were told not to do so.

Attorneys Gary D. Jiles and Matthew K. Brown pleaded not guilty on Sept. 19 and have requested a hearing. The Supreme Court appointed Judge John Plegge as a special master. Once he’s done with the case, the Supreme Court will make a decision. A timetable isn’t available for when a ruling will be made.

Jiles and Brown didn’t return a call for comment.

In 2011, Conway Corp., the nonprofit organization that runs Conway’s city utilities, decided it needed to use Cooper’s land to install a water line for an improvement project for the new Conway airport.

Cooper rejected the offer. She got an appraisal that said the land was worth $6,156 and that taking the property would result in $3,585 worth of damage to the remainder of her property, according to her counterclaim.

Since they couldn’t agree on a price, Conway Corp. and the city of Conway filed a lawsuit in Faulkner County Circuit Court in September 2011 to take the property under eminent domain. The price was to be determined later.

Conway City Attorney Michael Murphy filed the lawsuit to take the property.

Murphy told Arkansas Business last week that Conway Corp. wanted to hire the Millar Jiles firm because “it looked like it was going to become a contested matter.”

He said at that time the city was under a hiring freeze, and he was the only attorney in the City Attorney’s Office. Conway Corp. is its own entity and can choose its own legal representation, Murphy said.

Murphy wouldn’t say if Conway Corp. has spent too much on attorney fees.

“Ultimately, that’s a decision for Conway Corp. and their board and their CEO,” he said. “It’s always easy to Monday-morning quarterback.”

Walker said last week that he had offered a final price of $17,500 in November 2011, which is a result of the increased damage to her surrounding property.

Cooper said in an affidavit that her property and soil were damaged when Conway Corp. installed the water line.

“My bull injured one of its hind legs when it stepped into one of the large sink holes located on the portion of my property where Conway Corp.’s construction occurred,” she wrote in the affidavit in October 2012. “My land has eroded, and continues to erode on the portion of my property where Conway Corp.’s construction occurred.”

Delay and More Delay

The case was set for trial on Oct. 12, 2012. But the afternoon before the trial, Circuit Judge Michael Maggio issued an order clarifying his previous ruling that said the landowners couldn’t raise the issue of damages at the trial.

“We are essentially waiving almost $15,000 in damages because we cannot present them to the jury,” Walker said at the October 2012 pretrial hearing.

Jiles pushed to have the case go forward and said that Walker should have filed a counterclaim.

“We are ready to go today,” Jiles said at trial. “We need to proceed on and get this behind us for all of our sakes.”

Walker said last week that he thought that the landowners’ damages should be raised during the trial.

“We disagreed with the requirement of the court at the time,” Walker said.

At the pretrial hearing in October 2012, Maggio granted a continuance so Walker could file a counterclaim on the condition that Walker’s clients pay Jiles’ attorneys fees and costs for getting ready for the trial.

According to Millar Jiles’ bill, which was filed in the case, the firm spent 80 hours preparing for the trial. Jiles’ hourly rate was $250 and Brown’s was $185.

Maggio also said that if both sides wanted a court date within a few months, they would need to transfer the case to another judge.

They agreed. The decision to move the case, though, would set off a chain of events that would cause more delays and bring the case to the state Supreme Court.

‘Gross Abuse’

The case was transferred to Circuit Court Judge H.G. Foster’s courtroom in December 2012. Jiles prepared an order for Foster to sign on Jan. 31, 2013, that said Cooper and Dowell had to pay $20,805 to reimburse Jiles’ attorneys’ fees and costs. The order also said that Cooper and Dowell “shall not be permitted to file any further pleadings in this case” until the money was paid.

Foster signed the order.

The next day, Jiles filed paperwork to have Cooper and Dowell’s paychecks garnished.

In March, Cooper and Dowell appealed the order to the state Supreme Court on the grounds that Foster exceeded his jurisdiction and committed “a gross abuse of discretion” when he ordered them to pay attorneys’ fees and blocked them from filing any additional pleadings until the fees and court costs were paid.

On March 14, the high court said it would take the case and halted the circuit court proceedings as well as any attempt to collect the attorney fees while the appeal was pending. But in June, Dowell’s paycheck was garnished and the money was sent to the Millar Jiles firm, according to a state Supreme Court filing.

Associate Justice Karen Baker ruled on Oct. 3 that Foster exceeded his “jurisdiction and committed gross abuse by denying Cooper and Dowell access to the courts.”

Baker found that access to the courts is a constitutional right.

She ordered that Foster’s Jan. 31 order be rescinded, which it was on Oct. 17. That meant the order for the attorneys’ fees was wiped out. Foster didn’t return a call for comment.

On Oct. 4, Jiles asked Foster to again approve an order for the $20,805 in attorneys’ fees in connection with the trial that never occurred in October 2012.

Walker has objected to the fees and has asked for a hearing on the issue. A date hasn’t been set.

 

 

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