07/19/2006

Judge dismisses developer

But his company remains defendent in lawsuit

By CRAIG McCOOL

mccoolrecordeagle@sbcglobal.net

PETOSKEY — A lawsuit brought by a Bay Harbor homeowner upset over pollution will continue without resort developer David V. Johnson.

A judge recently dismissed Johnson from the case filed last fall by Richard Franks, who owns a vacation home in the posh Lake Michigan resort.

Johnson's Bay Harbor Company remains a defendant, as do several subsidiaries of CMS Energy, which is in the midst of an estimated $80 million environmental cleanup project at Bay Harbor.

Franks alleges that pollution concerns at Bay Harbor, formerly a cement plant, were not disclosed when he bought land in the development in 2001 and that his property values have suffered.

In 2004, caustic contaminants left over from the cement operation were discovered leaching into Little Traverse Bay along several stretches of shoreline, including an area adjacent to Coastal Ridge Drive, the site of Franks' vacation home.

In defending the lawsuit, attorneys for Johnson and Bay Harbor accused Franks of running a "smear campaign" to extort money from the developer.

In March 2005, Franks mocked-up several phony newspaper headlines, including a fake USA Today front page with the headline "David Johnson Jailed" and sent copies to Johnson and several CMS executives along with written demands for more than $3 million, according to the lawsuit.

Franks "waged a smear campaign against certain defendants believing they could threaten their reputations and coerce them into buying (Franks' family) out of a vacation home they have apparently grown tired of owning," Johnson's attorney's wrote in a recent legal brief.

Johnson's lawyers argued that neither Johnson nor his company are liable because Franks bought the property not from Bay Harbor, but from another individual who invested in Bay Harbor on speculation.

The remaining defendants and Franks continue to argue about how much information should be released by both sides as the case progresses.

See related stories:

• More contamination found at Bay Harbor - April 29, 2006
• Judge refuses to throw out Bay Harbor suit - April 6, 2006
• Questions aplenty at Bay Harbor forum - March 26, 2006
• East Park to remain closed - March 5, 2006
• Cleanup cost now estimated at $85 million - February 25, 2006
• Developers buy back at least one lavish home - February 7, 2006
• Property assessments rise despite pollution - February 3, 2006
• Bay Harbor homeowners file lawsuit - January 31, 2006

See related editorial:

• Bay Harbor lawsuit is a chance to learn more - February 10, 2006