MOUNT VERNON — More than two years after starting court action, the Ohio Department of Natural Resources has an answer in the Knox Cattle dam dispute.
In 2022, ODNR asked the court to determine who owns the Knox Cattle Company dam on Yauger Road because it needed repairs.
On Sept. 23, Knox County Common Pleas Judge Richard Wetzel finally ruled that The Landings Property Owners Association (POA) Inc. owns the dam and the lake.
He also ruled the POA owns the swail leading to the lake from Woodlake Trail and Longvue Court, and five “spillway parcels.”
The POA owns the spillway parcels because the property owners conveyed the land to the POA via quit claim deeds.
“The consequence of this finding is the owner is the corporation, and the corporation is going to have to find a remediation of the dam,” Wetzel told Knox Pages following a Sept. 23 status conference call.
Additionally, Wetzel ruled that the Declaration of Building and Development Restrictions for The Landings Development Phases VII and VIII are binding on Mullins Bros. as developer and the Phase VII and Phase VIII lot owners.
However, the rulings do not close the case.
Other claims and issues raised by the various parties in the lawsuit remain unresolved. Those include cross-party claims, alleged Water Pollution Control Act violations, and breach of contract.
Wetzel said the court will determine those issues at future trials or hearings.
Additionally, the state canceled The Landings Property Owners Association Inc.’s articles of incorporation in 2015 because the POA failed to file a statement of continued existence.
Wetzel set a hearing for Oct. 3 at 1:30 to appoint a receiver for the corporation.
The City of Mount Vernon is still a party in the case because it implements the city’s stormwater program.
A matter of law
Wetzel said the rulings in the cattle dam dispute are a “matter of law,” noting three points:
• The Ohio Administrative Code‘s definitions of “dam” and “reservoir” mean the lake and dam cannot be separated.
• Deed records show The Landings Property Owners Association Inc. took title to the land upon which the lake, swail, and spillway sit.
• The Landings Property Owners Association Inc. was a functioning corporation based on the articles of incorporation filed with the state in April 2005. The incorporation articles state that the corporation’s purpose is to “hold, maintain, and control the common properties of the Landings Phase VII and VIII.”
Wetzel said Wildwood Lane resident Cloyd Yough’s testimony was extremely helpful.
According to court documents, Yough testified he became involved with a homeowners association when he moved into The Landing Phase VII in 2007.
He initially could not remember the association’s name and denied involvement in the Landings Property Owners Association Inc.
However, he testified about the association “in charge of the common areas of The Landings Phase VII or VIII.” He said he was a trustee and that the association had a bank account, collected $200 annual dues at least until 2010, and that homeowners received annual statements reporting the association’s finances.
Yough also testified that the association stopped collecting dues and notified members of this action at an annual meeting.
As trustee of the association, Yough filed for a property tax exemption for the lake and the swail. He signed as trustee of “Landing Property Owners Association” for “Phase VII and VIII for the Landings Property — or Landings development area.”
On cross-examination, he testified that his application was for the lake and spillway parcel owned by The Landings Property Owners Association Inc.
The significance of the name in the cattle dam dispute
According to Wetzel’s ruling, Yough’s testimony confirms Steve Mullins’ testimony on behalf of Mullins Bros. that the corporation was functioning.
Mullins presented evidence of dues invoices sent to Phase VII and Phase VIII lot owners. He also presented bank records showing the collection of dues and expense payments for The Landings Property Owners Association Inc.
This confirmation is significant because a group of homeowners, collectively known as the “Long Defendants,” argues that the Landings Property Owners Association Inc. was not properly formed and did not function as a corporation.
The defendants also argue that Mullins breached the covenants in the declarations it prepared by failing to require Phase VII and Phase VIII lot owners to become members of a nonprofit corporation known as The Landings Common Area Association Inc.
Wetzel’s ruling states that the evidence shows that despite the difference in names, the two associations were effectively the same corporation.
He also notes that under Ohio law, a corporation continues to exist until it is completely liquidated. One reason for this is so it can carry out existing contracts.
The statute of limitations for reinstating the corporation expires Oct. 24, 2024. Wetzel set a hearing on Oct. 3 to appoint a receiver for the corporation.
Binding declarations in the cattle dam dispute
Wetzel noted that Mullins Bros. and property owners are subject to the building and development restrictions for Phases VII and VIII.
The restrictions have several provisions:
• They name Mullins Bros. as the developer.
• They require property owners to become members of a nonprofit corporation known as the Landings Common Area Association Inc.
• The association is responsible for maintaining the lake.
• Property owners are liable for assessments the association imposes.
The Long Defendants contend in the cattle dam dispute that they did not have adequate notice of the restrictions, which are therefore not enforceable and not binding.
Wetzel reviewed copies of each property owner’s Schedule of Disclosures and Encumbrances, which is included with their real estate title policies.
“All of those owners’ title policies show that the development and building restrictions for Phase VII and VIII were disclosed to the buyers at the time they bought the lots,” Wetzel said on the conference call.
“Their argument fails based on what’s clearly on record and in the chain of title.”
The Long Defendants also argue the restrictions go against public policy. The court ruled the state has the right to enforce the law and protect the public interest.
“It is not against public policy to require the lot owners to support the maintenance of the dam,” Wetzel said.
The case record documents the state’s effort to enforce dam safety laws through correspondence with property owners and the developer since 2009.
Because the restrictions are enforceable against Mullins Bros. and the lot owners, the court prohibits any party from amending or modifying the Declaration of Restrictions unless the court orders such action.
Additional risk reduction measures
City Engineer Brian Ball said on the conference call that the city conducts regular inspections on the dam. Mia Kannik, program manager for the dam safety program at ODNR, attended a recent inspection.
“Because of the court-ordered water elevation change, it has been difficult to keep vegetation from clogging the primary outlets,” Ball said.
“There is extremely woody vegetative growth that is endangering the outlet.”
Crews were on site on Sept. 23 to unclog the pipes.
The court noted that as a proper party in the case, the city “will be ordered to enforce the applicable ordinances governing the operation, maintenance, and financing of the remedial measures necessary to bring the lake and the dam into compliance with Ohio’s dam safety laws.”
With dam repairs in mind, the Knox County commissioners gave the city $1 million in American Rescue Plan Act money for water, sewer, or stormwater supply projects. The city must have a contract signed by Dec. 31.
If a dam owner is not identified by Nov. 15, the city will allocate the money to another project so that it can comply with the Dec. 31 deadline.
Wetzel asked the city to file a motion for interim risk reduction measures (IRRMs) needed for repairs. He will consider the IRRMs during the receivership hearing on Oct. 3.
