CONWAY - Conway Corp., which operates the city-owned utilities, has paid a Conway law firm tens of thousands of dollars more in legal fees than the amount a couple offered to settle a land-condemnation issue, and the case is far from resolved.
In a related development, the Arkansas Supreme Court has appointed a special master to preside over a hearing aimed at determining whether he should recommend that the two attorneys representing Conway Corp. be held in contempt becausethey sought to collect on garnished wages from the couple, despite a high court order staying such actions.
As of last week, the special master, John Plegge, had not made a recommendation in the matter involving lawyers Gary Jiles and Matthew Brown, both with the Millar Jiles LLP law firm. Supreme Court records indicate that Jiles and Brown, who represented the city of Conway and Conway Corp., have pleaded innocent and requested a hearing.
Neither Jiles nor Brown returned repeated phone messages seeking comment.
The contempt issue grew out of a legal dispute over how much Conway Corp. should have to pay property owners Karen Cooper and Jack Dowell, who are married and live near the site of the city’s planned airport. Conway Corp. obtained an easement on their property to install a waterline leading to the airport site.
Conway Corp. Chief Executive Officer Richard Arnold said the waterline has been installed. The issue now is how much the company must pay Cooper and Dowell.
The corporation had paid $48,492 in attorney fees in the case as of last week, Arnold said. It also has paid $6,262 for fees and outside consultants for trial preparation - expenses “which were billed [through] our attorney,” Arnold said in an email.
Arnold said in an interview that he thought the company had offered close to $900 to the couple, but he said he wasn’t sure because he was out of the office and didn’t have the information with him.
Little Rock attorney Kent Walker, who represents the couple, said Conway Corp. had offered $881, or 5 cents per square foot for the easement, which he said is 20 feet with a 25-foot setback from the road. The couple’s last offer to settle was for $17,500, Walker said.
The case was scheduledfor trial in Faulkner County Circuit Court on Oct. 12, 2012, but was delayed at the couple’s request.
Walker, referring to the couple’s proposed $17,500 sum, said, “However, this was well before the trial date and more importantly all the Supreme Court special Writs being issued.”
The owners’ damages have continued to accrue, Walker said, “because the work on the property did not include proper erosion control measures or proper soil compaction.” As a result, he said, Cooper’s bull was hurt when it fell into a sinkhole, and she had to sell the animal.
Arnold declined to comment on the allegations about erosion and the bull. But he said, “We had no idea that we would have to spend this much in attorney’s fees. They’ve drug this thing out almost two years now. You never know what it’s going to cost you in legal fees.
“We had 34 other [area] property owners that accepted the valuation, and we felt it was fair, and the counteroffer was unreasonable. We really were left with no choice but to let a jury decide,” Arnold added.
In an email Friday, Walker responded: “Our offer was based upon an appraisal we had done on the valuation of the land. Unfortunately, I believe Conway Corporation has a take it or leave mentality with their offers, and they refuse to negotiate. This is unfortunate for my client, and for the ratepayers of Conway Corporation who bear the burden of increased litigation.”
Arnold, however, said, “We tried to negotiate with them. … You always want to talk to people.”
Accepting the counteroffer just to end the matter would set a bad precedent, Arnold said. “As far as our ability to acquire easements, I think it does send a wrong message,” he said.
Walker said he believes it is “irrelevant” what the other property owners choose to do. Rather, he said, the issue is the “true value” of the property, damages and whether the owners want to give up their land in the first place.
The contempt issue arose several months after Circuit Judge Michael Maggio in October 2012 agreed to a last-minute trial delay at the request of Dowell and Cooper.
The case later was switched from Maggio’s division to another division, where H.G. Foster became a circuit judge in early January of this year. On Jan. 31, Foster signed an order prohibiting Dowell and Cooper from filing any pleadings in their case until they paid $21,345 in attorney fees and costs as a condition for their trial having been delayed.
On Oct. 3, the Supreme Court ruled that Foster should rescind the prohibition order, saying it infringed upon the couple’s access to the courts, a right the justices said the U.S. Constitution guarantees. They called the lower-court decision“a manifest, clear and gross abuse of discretion.”
On Thursday, Foster said he wasn’t familiar with the case at the time because he had not been the judge hearing it but that it turned up before him after the courts were restructured and he had just taken office.
Still, he said, “The guy that signs the order is the guy that’s ultimately responsible.” He noted he had just rescinded his order.
In March, after the couple challenged that ruling in the Supreme Court, the high court quickly agreed to stay “an attempt to collect on the garnishment.”
Yet on June 24, the couple filed a motion saying Dowell’s paycheck was garnished on June 6 with the payment being remitted to the Millar Jiles law firm. Walker said Friday that the one-time garnishment was for $230 and that his client wasreimbursed.
Then on Sept. 5, the Supreme Court issued an order saying, “Because this court issued an order that specifically stayed any attempt to collect on the garnishment, we direct attorneys” Jiles and Brown “to show cause why they should not be held in contempt for violating this court’s order staying any attempt to collect on the garnishment.”
It is unclear when the special master will hear the contempt issue and make a recommendation to the Supreme Court.
Northwest Arkansas, Pages 15 on 10/20/2013