Rooney Valley News

FIRST, whats next.   Another push for settlement.  

Because counsel agreed to forfeit a jury, we don’t have a final end yet.   If the case had been tried to a jury, we’d have had a verdict and conclusion Thursday.    Since the Judge is deciding the case, not a jury, the judge (and attorneys) have some work to do which will take at least another two months of reviewing depositions, more briefs and proposed findings of fact and conclusions of law.  

So, since “there’s still plenty of time to settle”, the judge urged the parties to “try to work it out” now that the evidence has been presented “and some witnesses may not have done as well as expected” (paraphrasing).   Note that Green Mountain only called one witness (Jeff Baker), so consistent with what I heard from the witnesses, the judge may have been telegraphing that Big Sky’s witnesses may not have done so well.

Green Mountain is meeting Tuesday.  So there may be an executive session where counsel will be urging the board to consider settlement, again.  More on that later.

SECOND, here are some highlights from the 7 days of trial over two weeks.  

A disclaimer:  I listened to about 90% of the trial.   So the best record of what happened and what was said will have to wait until the full transcript is available.  GM is getting a copy and since it is a public record, they hopefully will be posting it on their website.  

Until the transcripts are available, here are the highlights of what I heard and remember, again subject to human error in both my hearing and remembering.

My comments and information from documents that may not have been used at trial are in parentheses (  ).

HIGHLIGHTS

1. CDN bought the Rooney Valley property, including the Solterra and the current Big Sky tracts, from the Resolution Trust during the mess in the early 90’s.  Price:  $50,000.   (From information available through court records, Carma/Brookfield later paid CDN $4 million for Solterra’s land)

2. As of December,  2018, CDN had a contract to sell the Big Sky parcel to Lennar for $34 million.  

Lennar is building RRC south of Solterra (Lennar is  using Mt Carbon – which Lennar owns – for sewer.)   CDN’s contract to sell Big Sky to Lennar for $34 million assumed CDN could persuade GM with threats of litigation to provide sewer service.  This contract with Lennar was finalized in December,  2018 when GM was in the middle of evaluating the election night Big Sky IGA.  That process to evaluate the Big Sky IGA took GM 8 months.

3.  CDN spent about $700,000 to get the Big Sky metro district set up, set up the Big Sky IGA plan and work on GM to eventually sign the Big Sky IGA.  

4.   (CDN stood to make a nice profit as long as GM helped out.   CDN would make about $33 million profit.)

5.  CDN was made up of three exceedingly wealthy Canadian investors.  The son of one of the investors was “in charge” of the Big Sky project.  When it all collapsed with the termination of the Big Sky IGA on April 9, 2019, Dad took over the project and litigation.  This lawsuit was filed in June, 2019.

6.  Dad testified he’s the head honcho who “writes the checks”.  

Dad also testified with a heavy dose of incredulity  that he could not fathom why GM would turn down all this money.   He could not understand why GM would not want to do an IGA to provide CDN with sewer outside GM’s district since GM would make so much money doing it.  (GM would be providing less service since they would not own the pipes in the ground but charging 25% more in fees under the IGA).    

(CDN was essentially cutting GM in on the “money grab” at the expense of the residents and future residents.  This senior partner could not understand why GM wouldn’t want more money at the expense of the residents.  “How could GM’s “business” model be so different from his.” (paraphrasing)  Perhaps because GM is not in the business of making profits.  It is in the business of providing a public service and being held accountable to the taxpaying residents who pay fees for its services.)

7.  Tom Morton, the former chair of the Solterra board at a time when it was developer controlled and now chair of the Big Sky board, testified under questions from his attorney that he could have cared less about who was running and might win the GM election May 8, 2018.  He wasn’t worried about it at all, he testified.  The election night Big Sky IGA was not rushed through before the new board was elected.

But then under cross examination by counsel for GM he was confronted with the email from Morton’s own attorney, Charles Norton, to Attorney Ivey, GM attorney at the time.  That email in April stated that Tom Morton had sent his attorney one of the campaign brochures for the Hanagan, Plotkin, Baker slate and was worried about them getting elected before the Big Sky IGA was signed.  Norton essentially told Ivey in the email they needed to get the IGA signed before the election.

Here are those emails:

Big Sky Emails that ARE Relevant to the Big Sky IGA (Revised with introductory notes)

(Not only was Tom Morton in fact very worried about not getting the Big Sky IGA signed if the new board was elected, but he tried to hide that fact from the Court.   His credibility is now seriously in question.   

That is important because it shows that Big Sky was essentially trying to cheat the voters out of the results of their election by rushing through an IGA that Big Sky and CDN knew might not pass if a new board was in place.  This significantly undermines their claim that the Big Sky IGA was valid and eliminates their “equitable” claim of promissory estoppel because CDN/Big Sky acted in bad faith.)

Jeff Baker during his testimony asked why Big Sky rushed it all through when the new board that would have to deal with the Big Sky IGA was just being elected.  Why not wait until the new board could get up to speed.  

(We now know the answer from Big Sky’s own attorney’s emails stating it needed to be done before the election because he and his client were afraid the new board might not agree with the Big Sky IGA).

8.  During his testimony, Tom Morton also provided a glimpse behind the curtain regarding CDN’s efforts to get sewer from somewhere else.  Bottom line, he testified, was that it was less expensive and less trouble to get it from GM.  He testified that Lennar, (who controlled sewer through Mt. Carbon) would not enlarge their facility and that the politics in Morrison might make it difficult to get approvals.  Morton testified the cost of getting sewer through Mt. Carbon, Lennar and Morrison was 5 times what it would cost for GM.  (In other words, it was easier and less expensive to sue GM and try to force them to provide the service after getting the election night IGA crammed through before the new board was elected).

9.  Dad of the CDN partnership testified that “it was not possible” to get sewer anywhere else.  This testimony from Dad conflicted with testimony from Tom Morton who said it was too expensive and too much trouble.  

Dad also testified that they had “unlimited funds” available.  (So, contrary to Tom Morton’s testimony paying 5 times the GM cost was possible, just meant less profit.)

10.  (Bottom line, again, was that the three Canadian  CDN partners would make a whole lot more profit if they could force GM to provide sewer than if they had to go through Lennar.   And remember, Lennar was their buyer.  So, again, if Lennar had to provide their own sewer, then CDN makes much less than $34 million.  And Lennar is no dummy.  They aren’t going to go out of their way to help Big Sky if it means they can get the property for less money and provide their own sewer service through their own sanitation district – Mt. Carbon without paying a premium to CDN).

11.  (The issue of whether or not service was available from Mt. Carbon – which is the sanitation district where Big Sky is located – again is important to whether or not Big Sky’s promissory estoppel claim is valid – the equities favor Big Sky because there is no other alternative.  It is also important to the “takings” claim – that GM is “taking property without compensation” by eliminating the ability to develop.)

12.  A strong record was made by GM counsel through cross examination of Big Sky’s witnesses and Jeff Baker that the Big Sky IGA was invalid because it violated the Big Sky service plan.   One of Big Sky’s witnesses testified that even if the IGA did violate the Big Sky service plan (providing service to other properties, districts including at least one outside the City of Lakewood), “it wasn’t that many sewer taps”.  (This was an important concession that the Big Sky IGA may have violated the Big Sky Service Plan.  Violation of the Big Sky Service Plan is still a violation and the number of taps was not insignificant.)

13.  Big Sky introduced into evidence a document that was a statement from then Lakewood City Attorney Cox saying that they had obtained an “independent” legal opinion from an attorney in Pueblo saying that the Big Sky IGA did not violate the Big Sky service plan.  Several problems with it however.

First it is double hearsay.  A statement from someone else to Cox and Cox to Big Sky.

Second, it was never provided to Green Mountain.  And I saw it for the first time today.  It was never made public.   

Third, it came out in July, three months after the Big Sky IGA was terminated and one month after Big Sky filed the lawsuit.  It was too late, the Big Sky IGA no longer existed.

Fourth, the actual opinion still has not been released.  It’s still a “secret”.  

Fifth, from the summary provided by Cox, this new opinion relies heavily upon the assertion that under Title 32, a district like Big Sky can provide whatever services it wants to outside its district.  That is true.  Except.  THE POWER TO PROVIDE SERVICES OUTSIDE THE DISTRICT BOUNDARY IS LIMITED TO WHAT SERVICES OUTSIDE THE DISTRICT HAVE BEEN APPROVED BY LAKEWOOD (OR THE CITY CREATING THE METRO DISTRICT).  

BASED UPON THIS NEW ATTORNEY’S ARGUMENT, BIG SKY COULD PROVIDE RAPID TRANSIT SERVICE TO WINTER PARK AND TAX THE NEW BIG SKY RESIDENTS TO PROVIDE THAT SERVICE WITHOUT PERMISSION FROM LAKEWOOD.  OF COURSE THAT IS NOT TRUE.  NEITHER IS IT TRUE THAT BIG SKY COULD TRANSFORM ITSELF INTO A SANITATION DISTRICT PROVIDING SEWER TO OTHER DEVELOPMENTS FOR A PROFIT WITHOUT PERMISSION FROM LAKEWOOD.  

IN FACT, UNDER TITLE 32 THERE MUST BE AN EXPRESS STATEMENT IN THE BIG SKY SERVICE PLAN STATING THAT THERE WILL BE A BIG SKY IGA CREATING A DIFFERENT DISTRICT TO PROVIDE SEWER SERVICES TO PROPERTIES OUTSIDE THE BIG SKY METRO DISTRICT.  

AND THERE MUST BE A FINANCIAL PLAN FOR HOW MUCH THAT WILL COST AS PART OF THE BIG SKY SERVICE PLAN.  

INDEED, THE PERFECT EXAMPLE IS THE SOLTERRA SERVICE PLAN (FOSSIL RIDGE METRO DISTRICT).  THAT SOLTERRA SERVICE PLAN EXPRESSLY PROVIDED FOR BUILDING SERVICES OUTSIDE THE DISTRICT BOUNDARY AND STATED HOW MUCH THAT WOULD COST IN THE FINANCIAL PLAN.  THOSE SERVICES OUTSIDE THE DISTRICT BOUNDARY WERE EXPRESSLY APPROVED BY LAKEWOOD WHEN LAKEWOOD APPROVED THE SOLTERRA (FOSSIL RIDGE) SERVICE PLAN.

NOTHING LIKE THAT IS IN THE BIG SKY SERVICE PLAN.  THE BIG SKY SERVICE PLAN EXPRESSLY DID NOT PROVIDE FOR THE BIG SKY IGA OR PROVIDING SERVICES OUTSIDE ITS DISTRICT BOUNDARY.   

So, like the saying goes,”garbage in, garbage out”.  This new opinion Mr. Cox obtained isn’t worth the paper its printed on based upon apparently false information and assumptions provided to that attorney.

Sixth, Mr. Cox’s credibility was significantly impaired based upon the line of emails showing that he was colluding with Big Sky in writing his office’s opinion and, according to those emails, apparently later changing that opinion at the direction of then mayor Adam Paul.   An “independent” opinion secured and summarized by Mr. Cox alone with no review by anyone but him is not very persuasive.

Here is this “new” “secret” legal opinion:  

14.  Adrienne Hanagan, one of the three new board members who later completely reversed course and attacked her colleagues in the Spring and Summer of 2021 testified, as she also falsely stated in 2021, that her colleagues were “anti-development”.  Big Sky used her as their witness to try to prove that Jeff and Alex intended to terminate the IGA from the very beginning in order to stop any development of Rooney Valley.  

15.  Jeff Baker testified that was not true.  That he (and Alex) was not “anti-development”, he agonized over the decision to terminate the IGA and was undecided until April 9 when the board voted to terminate the IGA.  

Indeed, Jeff testified  that in January, 2019, he asked Charles Norton, Big Sky’s attorney if Norton would consider doing inclusion instead of an IGA.  

Jeff also testified that that the board repeatedly asked Big Sky and the City of Lakewood to follow the rules for amending the service plan and approving, after public hearings, the modification of the Big Sky Service Plan for Big Sky to provide sewer to all of Rooney Valley as the new “master meter”  at a profit.  

(The reference to “master meter” was made by Big Sky’s counsel, Kristin Bear in one of her briefs to the City of Lakewood in the Fall/Winter of 2019 describing the proposed Big Sky Sanitation System – see here first paragraph page 6 – Big Sky – White Bear Memo )

16.  Notably, Adrienne Hannagan “misspoke” when she testified that she and I met, alone, at a Starbucks in Morrison on September 1, 2018 and made many statements about the Big Sky IGA on September 1, 2018.   (I don’t drink coffee.  I never met anyone at a Starbucks in Morrison.   It was Rita Bertolli who proposed a meeting at our home to talk about the Big Sky issues.  Others attended and my recollection is she did most of the talking.  Here is the email setting up that September 1, 2018 meeting:   email )

(Ms. Hannagan’s testimony was apparently used by Big Sky to try to argue that I alone created the issues with the Big Sky IGA.  Those of you involved at the time know that there were many folks who were concerned about the Big Sky IGA, beginning with how it was crammed through election night May 8, 2018 and created a significant public policy problem by establishing a new sewer district to provide sewer throughout Rooney Valley with little or no public accountability and without authorization from the legislative bodies responsible for creating new sanitation districts.   For example about 50 folks showed up for the mini debate I had with Big Sky’s attorney at a meeting of GM in January, 2019 as well as large attendance at  public hearings before Lakewood on the issue.

And there’s nothing wrong with residents talking about issues related to public policy concerns, expressing their thoughts to their elected representatives and urging one course or another.   Thats actually how representative local government is supposed to work.  Developers do not have a monopoly on the time and attention of public officials.  Many public officials listen to their constituents.)  

Jeff Baker explained during his testimony that this was a significant public issue with a lot of public participation.  

(Indeed, the recall election, subsequent election and the board’s decision not to settle because the residents opposed an extraterritorial service IGA with Big Sky outside GM’s district but ultimately GM’s responsibility (when things start to go wrong) clearly provide evidence of the community’s opposition to the Big Sky IGA.)

Clearly, that could all change.  The residents could decide the Big Sky IGA is a good thing.  But that wasn’t the case in 2018 and 2019 when the Big Sky IGA was terminated after multiple public debates over the issue which all included the Big Sky IGA developers.

MORE TO FOLLOW TOMORROW.    NEXT GREEN MOUNTAIN MEETING TUESDAY.