A Deschutes County Circuit Court judge is deciding whether to throw out a lawsuit filed against Eagle Crest Resort’s water and sewer utilities.

Property owners within the resort filed the suit against the companies in February and alleged they had been improperly charged connection fees for water and sewer service.

The suit claims the fees were part of the price for lots when purchased by property owners to build homes in the resort west of Redmond. Two phases of development began in the 1990s to include about 1,600 residential lots.

Attorneys representing Cline Butte Water LLC and Cline Butte Environmental LLC — the water and sewer utility companies, respectively — filed a motion in March asking a judge to dismiss the lawsuit.

The companies’ attorneys argue the lawsuit fails to adequately make claims against the utilities and that allegations against Cline Butte Water should have been directed to the Oregon Public Utility Commission.

“It makes much more sense to give primary jurisdiction to the (Public Utility Commission) in the first instance,” Laura Schroeder, a Portland attorney representing the utility companies, said Wednesday.

Schroeder spoke at a hearing on the motion to dismiss the suit in front of Deschutes County Circuit Judge A. Michael Adler.

“We do have the absolute right to be in this court,” Edward Fitch, a Redmond attorney representing the homeowners, told Adler in response.

The suit against the utility companies was filed by property owners and Sage Builders LLC, a Bend-based custom home building company . In addition to connection fees, the lawsuit alleges Cline Butte Water overcharged for a deposit on water meters.

Fitch said an informal complaint was filed with the state utility commission last year after a property owner discovered a billing for installation of a water service line that had been put in 20 years prior.

The utility commission, which regulates water utilities, reviewed the complaint and concluded the Cline Butte Water company appeared “to be properly charging for the service line connections under commission jurisdiction,” according to a September letter from the commission.

Fitch argued his clients believe the utility companies haven’t incurred costs associated with installing sewer and water lines, and therefore don’t have the right to charge fees for them. He said the homeowners were advised to file a formal complaint with the commission or go to a different forum such as the circuit court.

Fitch is seeking to file an amended civil complaint with the circuit court to delete and add some new claims to the lawsuit.

He also agreed to drop a request in the lawsuit based on correspondence with the state utility commission regarding jurisdiction. The request in the initial complaint asked Adler to make a ruling on whether the fees and water meter deposit were “improper or unlawful.” The commission requested jurisdiction over the matter in a letter to Fitch.

Based on changes to the complaint and the proposed withdrawal of some initial arguments, Schroeder told Adler “we don’t believe this complaint was filed in good faith.”

Adler is now reviewing the motion to dismiss the lawsuit based on oral arguments by both sides Wednesday and filings submitted to the court.

— Reporter: 541-617-7820,

tshorack@bendbulletin.com