Water feud erupts into $750,000 lawsuit

Published 4:00 am Friday, November 28, 2008

The man at the center of the ongoing Crooked River Ranch water feud has sued homeowners association board members for $750,000, saying they had him prosecuted for doing his job in a move to grab control of the subdivision’s water company.

James H. “J.R.” Rooks, who manages the Crooked River Ranch Water Company, filed the suit this month, charging members of the rural subdivision’s maintenance association, which is a homeowners association, with malicious prosecution, abuse of process, negligence and intentional infliction of emotional distress. In the lawsuit, he also has a claim against ranch resident Harry Brown for defamation, alleging Brown told a judge that Rooks lied under oath during his criminal trial.

A Jefferson County jury acquitted Rooks of criminal mischief in April on charges launched by ranch board members that Rooks destroyed juniper trees and cleared brush in the subdivision without authorization.

Board President Frank Ferraro said he could not comment on the case until a meeting with the association’s attorney, but said he’d like to see the long-standing, contentious relationship between Rooks and the board resolved.

“I’d like to see it come to an end someday, but at this point I don’t know how or when that will happen,” he said

In the civil suit, Rooks says the board knew he had permission from prior board members to build a fire break on communal property of the maintenance association and the water company.

Rooks and his Bend lawyer, Nathan Steele, declined to comment on the allegations in the complaint.

“When you’re involved in something like this, the best thing to do is leave it lay with the facts and hope for a positive outcome,” Rooks said.

The suit says Rooks maintained the property in question for about seven years without objections from the board.

During that time, Rooks’ complaint says the water company became a lucrative business, and the board came after him in an attempt to take it over.

“Plaintiff was a vocal opponent to any such take-over by (the maintenance association),” the suit says. “As a result of his opposition, plaintiff and his family have been repeatedly harassed and intimidated by the Board of Directors ~”

The suit says board members filed two reports with the Jefferson County Sheriff’s Office, accusing Rooks of illegally damaging property, and dumping dirt and rock on maintenance association land without permission.

“On or about May 2006, Rooks was arrested and incarcerated in connection with the criminal charges filed against him,” the suit states.

But Jefferson County jail records show Rooks was booked on the charges and immediately released.

Conflicting testimony

Jefferson County District Attorney Peter Deuel prosecuted the criminal case against Rooks in April and said a six-person jury heard conflicting testimony about Rooks’ authority to maintain ranch property.

Former board members who testified on Rooks’ behalf said he was given permission in the 1990s to maintain the land, Deuel said.

But there was nothing on paper to show any agreement existed between the board and the water company, he said.

“As I recall the testimony came out, there was no prior recording of any prior board action that memorialized whether or not he had permission,” Deuel said.

After Rooks’ acquittal, Crooked River Ranch property owner Harry Brown wrote a letter to the judge presiding over the criminal trial. The letter details a litany of complaints against the way Rooks has run the water company and says Rooks was “allowed to lie while under oath,” at his trial.

Brown did not return a call for comment.

His complaints against the water company, however, have been well-documented by ranch residents over the years.

Since 2001 a group calling themselves the Crooked River Ranch Water Watchdogs have accused the utility of intimidating customers, cutting off water to Rooks’ enemies, misusing company equipment and funds and changing bylaws to limit public participation in its decisions.

The water company is the sole provider of water to the ranch, though some residents rely on wells or cisterns for their water.

Investigation

Resident complaints have spurred an investigation of the water company by the state Department of Justice and petitions signed by nearly 400 customers prompted the Oregon Public Utilities Commission to take over its regulation in 2006.

The DOJ investigation found no basis for criminal charges, but showed that Rooks and his wife ran the company essentially as a family business. It showed that, between 2001 and 2005, while his wife, Jacquie, did the bookkeeping, their family received more than $837,000 from the company for wages, maintenance contracts and employee benefits.

DOJ investigators reported that the accounting was done with little or no oversight and the Rooks were paid for hours that would have been nearly impossible to work over the 4½ years investigated.

In a 2005 standoff with a water customer, Rooks drove a backhoe to the residence, threatening to tear out the man’s waterline after several residents blocked access to the home’s water meter by parking an aging RV in the way.

When the PUC started regulating the company’s rates in 2006, it cut the water company’s revenue by nearly 38 percent and eliminated an $8 surcharge on water bills intended for capital improvements.

Earlier this year, the PUC accused the company’s board members of diverting about $118,000, collected through the surcharge, that was intended for capital improvements. The PUC determined the money was not used for any improvements and wants it returned.

But that investigation was put on hold when the water company’s board of directors appealed the PUC’s regulation of the utility to the Oregon Court of Appeals, said Bob Valdez, spokesman for the utilities commission.

“In order to pursue all of these matters, we need a clear signal from the Court of Appeals,” Valdez said.

In the mean time, the PUC will continue to regulate the water company and investigate complaints against it.

But Valdez said the company makes that difficult by dragging its feet in turning over paperwork and refusing to be open about its business practices.

“In sort of a big picture, they continue to be one of the most difficult water utilities that we work with in the entire state,” Valdez said.

The PUC does not know when the Court of Appeals will rule, Valdez said.

The civil lawsuit Rooks filed is scheduled for a pretrial hearing in February.

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