Thursday, May 26, 2022

New judge dismisses two claims against Belville, but H2GO case is far from over

H2GO, Leland and Belville case is still on. Superior Court Judge Charles Henry dismissed two out of eleven of Leland and H2GO's claims against Belville and denied Belville's motion to dismiss in an order, released Wednesday.

H2GO, Leland vs. Belville case is set to continue in Brunswick County Superior Court. (Port City Daily/Johanna Ferebee)
H2GO, Leland vs. Belville case is set to continue in Brunswick County Superior Court. (Port City Daily/Johanna Ferebee)

BRUNSWICK COUNTY — The battle over who owns a $60 million water and sewer utility is still on, despite the dismissal of two major claims.

The H2GO utility and Leland are currently co-plaintiffs against the town of Belville. On Wednesday, Superior Court Judge Charles Henry denied Belville’s motion to dismiss the entire case. Judge Henry did single out two of the 11 claims being made against the small town and dismissed those complaints.

RELATED: Will new judge throw out $60 million H2GO?

Brunswick Regional Water and Sewer H2GO was transferred to Belville last year after an election swung the utility’s board in opposition to planned a reverse osmosis plant.

H2GO’s current board wants the utility’s assets back under its own control, and is aligned with Leland in court against Belville, suing for its return. (Read more about how a reverse osmosis plant broke up a public utility)

Claims dismissed and upheld

Because Leland is a customer of H2GO, the court found that Leland proved it had suffered immediate and threatened injury.

“(Leland) has standing to challenge the alleged illegal disbursement of district funds and
property to Belville,” the order states.

Citing Supreme Court case law, Judge Henry wrote that the courts do not have the right to pass judgment on actions taken by public officials. He found that the boards of both Belville and H2GO, at the time of the contested November 2017 transfer, did not abuse their discretion. Still, he didn’t dismiss Leland’s “abuse of discretion” claim.

Moving forward, Leland must “overcome the presumption of legality afforded to public officials” and prove Belville and H2GO’s outgoing board’s actions were “clearly unreasonable” and “oppressive.”

Judge Henry dismissed two Leland and H2GO’s more direct claims:

  • The first claim, phrased as a request for “A Declaration that the Challenged Resolution, Putative Transfer, and Putative Agreements are Void Because They Involve an Illegal Debt Transfer in Violation of NC. Gen. Stat. Chapter 159, Article 8,” would have the court rule that the transfer of H2GO’s assets was illegal and thereby negate it.
  • The second claim was a request for a “Quiet Title” — so called because it would “quiet” or silence any future counterclaims — would officially declare H2GO as the owner of its property.

“In conclusion, the court expresses no opinion as to the legality of the
resolution passed by defendant, H2GO, the transfer of H2GO’s property and the
debt to the defendant, Town of Belville, or the agreements entered into between
Belville and H2GO,” the order states.

Response

Judge Henry’s decision was released one month after the three parties first met in Brunswick County Superior Court.

In a release following the order’s announcement, Belville’s Mayor, Mike Allen, provided the following statement: “We appreciate the determination of the court. We look forward to moving forward with our effort to serve the public interest and provide safe, clean water to our citizens.”

H2GO’s attorney, Brian Edes, said that his client’s case remains intact.

“I am very pleased with Judge Henry’s ruling. It is a well thought out and considered decision,” Edes said. “Although two of our eleven claims were dismissed for technical reasons, our case remains intact and the ruling does not affect the substance of the relief we are seeking in this suit.”

In future hearings, the order states the burden of proof is upon the plaintiffs, H2GO and Leland, to prove Belville broke the law.

Read Judge Henry’s full order below:

Leland v. Belville Order by Johanna Ferebee on Scribd


Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com

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