11/15/2006

Liability protection deal not much help

Judge allows Bay Harbor, CMS suit to proceed

By
Record-Eagle staff writer

BAY HARBOR — A 12-year-old liability protection deal between the state and Bay Harbor developers does not bar individual landowners from filing claims over pollution concerns at the resort.

A judge declined to dismiss remaining charges in a lawsuit brought against Bay Harbor by resort homeowner Richard Franks.

In his suit filed last fall, Franks alleged the developers violated portions of their 1994 "covenant not to sue” agreement with the state of Michigan.

Emmet Circuit Judge Charles Johnson has dismissed some of Franks' allegations, including fraud and conspiracy charges, but he declined to toss the remaining claims. He said in a Nov. 10 opinion that Bay Harbor had an obligation to control pollution on resort property.

"If Bay Harbor Company was involved in designing, constructing, operating or maintaining the systems put in place to make to make the ... property safe for residential use, (the company) has a common-law duty to exercise reasonable care regardless” of the covenant, the judge wrote.

Franks' home on Coastal Ridge Drive faces Lake Michigan along a stretch of shoreline where pollution from the resort's prior life as a cement plant was found seeping into the water.

In addition to Bay Harbor Co., the Franks lawsuit also names CMS Energy, an initial resort financier that is in charge of an estimated $80 million environmental cleanup there.

Both CMS and Bay Harbor are accused of shutting off a leachate collection system for several months in 2004, allowing contamination from buried piles of cement kiln dust under the resort's golf course to seep into surrounding areas, including Franks' land and Little Traverse Bay.

Both companies argued in their requests for dismissal that they owned neither Franks' land before he bought it, nor the leachate collection system. But Johnson noted the companies owned and controlled both within the past five years.

No trial date in the case has been set.

See related stories:

• Regional agency gives resort's shoreline a clean bill of health - August 2, 2006
• Judge dismisses developer from Bay Harbor lawsuit - July 19, 2006
• 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