Why was a lawsuit initiated with Ozark Fisheries?

The lawsuit was started because Ozark and Mr. Cleveland neglected the lake and amenity areas of Shireman. A group of residents joined together to collectively address their complaints to Mr. Cleveland. Mr. Cleveland’s response was that he and Ozark had no obligation to maintain the lake or amenity areas for the benefit of the residents. Mr. Cleveland indicated Ozark Fisheries would maintain the lake only in the manner that was in the business interests of Ozark and that the residents had no legal right to use the lake or complain. As a result of this response, the residents filed the lawsuit. The Court ordered that the litigation proceed as a class action with all lot owners as members of the class. Without the filing of the lawsuit, Ozark and Cleveland would have continued to maintain the lake and amenities as they desired without regard to the owners in Shireman.

Throughout the litigation Cleveland claimed Ozark had sole ownership and authority over the lake and dam. Cleveland stated that if dam repairs were not cost effective, Ozark would not perform them and obtain water from another source (there were numerous well sites located in the fishery property below the dam) or move the fishery operations. The theory of the lawsuit was that developer, Missind Development Corporation, was the alter-ego of Ozark, and Ozark was liable for any obligations Missind had as the developer of Shireman Estates. The developer promised lot purchasers that the developer would maintain the lake and amenity areas without assessment to the owners and without the need of a homeowners association; however, none of the obligations or commitments made by Missind were recorded or included on deeds or covenants and restrictions. The only written evidence of the commitments was a brochure produced by Missind, not Ozark. Maintenance of the lake and amenity areas began to decline in the 1980’s. Ozark made the business decision that it had no legal obligation to continue to maintain the lake and amenity areas for the residents, so they stopped doing it. As evidence to support our theory of fraud and Ozark’s obligations to fulfill their promises to the lot purchasers was a brochure from the early 70’s that made the following principal representations:

A. “Shireman Estates will feature Lake DeTurk, a thirty-five acre water playground, and four landscaped parks to provide recreational and clean ‘elbow’ space for all residents.”

B. That Lake DeTurk will be available for use by all residents of Shireman Estates.

C. Ozark/Missind has created a “master plan” for the development of Shireman Estates, which provides for parks, ball diamonds and playground equipment.

D. That there will be no homeowners association for Shireman Estates, including no dues or membership fees.

E. That Grassyfork Fisheries would continue its operations and would have the right to make partial withdraws of water from Lake DeTurk, but that water levels would not be reduced by more than three feet below normal elevation.

F. That in 1970 Grassyfork Fisheries was acquired by Ozark Fisheries, Inc., of Stoutland, Missouri.

In summary, the lawsuit was commenced because the owners believed they had no other recourse to compel Ozark to maintain the lake, dam and amenities; and Ozark did have other alternatives for water than just the lake.

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There were numerous factors which made settlement the preferred option. The residents could have lost the lawsuit. One defense by Ozark was that Ozark was not liable, as the developer, Missind Corp. was the liable party and that company was dissolved in the 80’s. The statute of limitations had run out. Even if the residents were successful, the Court may have only given a monetary remedy to the original lot owners, or Ozark could have declared bankruptcy to avoid the obligation to maintain the amenities without revenue and in perpetuity.

The committee representing the residents decided that the goal of control over the lake, dam and amenities was best achieved through the certainty of settlement rather than the unknown result of litigation. The means to fund the maintenance of the lake, dam and amenities in perpetuity was to be achieved through the formation of a conservancy district. The water contract and settlement payment were then negotiated into the settlement, which was contingent upon the successful formation of a conservancy district. The court held a hearing on the settlement and then approved it. There were no objections to the settlement raised at the hearing.

How were residents informed during the litigation?

The committee met and exceeded all notice requirements imposed by statute or the court through the settlement process and formation of the District. Notice of the Petition and Hearing to establish the Conservancy District was published in the Martinsville Reporter-Times newspaper on June 25, July 2, and July 9, 2011. On July 19, 2011, a notice of the hearing and filing of the Petition to establish the Conservancy District was mailed via the US Postal Service to each freeholder who had not signed the Petition. The committee involved with the litigation or those that supported the formation of the District never intended to keep information from residents and owners in Shireman.

Why does Ozark have a water contract with LDCD?

During the negotiations for the settlement, Ozark insisted on the continued right to draw water for fishery purposes and was adamant that they would contribute no cash to the settlement. The term of allowing Ozark to draw water to a level not below 3 feet below normal pool stage was consistent with Ozark’s representation in the brochure. Even if the residents had prevailed at trial, that term would have remained, as it was in the brochure as well. The cash was used to pay the attorney’s fees incurred to prosecute the lawsuit and the balance was distributed to the District. The payment of fees was approved by the Court in the class action lawsuit.

Are the attorney fee’s high?

While the attorney’s fees may appear high to some, it should be noted that the law firm agreed to not bill or invoice during the pendency of the lawsuit (10 years) and fees were billed at a much more reasonable rate than most firms would have charged for similar types of litigation. Similarly, the firm has deferred payment of the fees incurred to establish the District and compile the district plan to ensure that the District has sufficient funds to pay the engineer and other expenses.