Court orders NAF to turn over financial documents

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   Chancellor Richard Johnson granted a motion sought by City of Elizabethton attorneys in Chancery Court Tuesday requesting financial disclosure documents from several companies including North American Fibers named in a lawsuit brought by the city.
   The city had sought to compel the release of documents including corporate minutes, financial statements, and loan documents, according to the brief filed by former city attorney Charlton DeVault.
   The city's attorney, Roger Day, said Johnson had granted a motion to compel the defendants to turn over records requested by the city in their motion.
   The city filed the lawsuit against Charles K. Green, individually, and several companies, in August 2000, alleging that an NAF landfill was sitting on top of one of the city's main sewer lines. The city lawsuit asked that NAF remove material and grant access to the sewer line so that city workers could inspect and maintain it.
   The documents centered on the "alter ego issue of the case" alleging Green was the alter ego of wholly-owned North American Corporation, and that both NAC and NAF have for a number of years been "completely controlled instrumentalities", according to the brief supporting the motion filed by former city attorney Charlton DeVault.
   The city's attorneys had filed two requests for production of documents, the most recent being in October.
   Johnson did not rule on a motion for summary judgment filed by the defendants. The defendants' lead attorney -- Stephen Anderson of Baker, Donelson, Bearman and Caldwell -- was not present in the courtroom. The firm sent an associate attorney from their Knoxville office to the court proceeding.
   Day said he had not been informed if the defendants' attorneys would attempt to have the motion for summary judgment before next Monday's trial date. A hearing on the motion had not been set in Chancery Court as of Tuesday.
   A motion filed by the defendants for a change of venue was also withdrawn by their attorneys.
   In the defendants' motion for a change of venue, three Carter County residents filed affidavits stating the company could not receive a fair trial because the residents of Carter County had a direct interest in the case that makes it impossible to render a totally impartial decision.
   However, court documents found no demand for a jury trial from either the plaintiffs or the defendants in the case.
   According to the city's original suit, the city says it paid $10,000 for a sewer easement in 1957, then built the 24-inch West End interceptor which served approximately 40 percent of the population at the time the suit was filed.
   The city has laid a support sewer line that connects the interceptor to the city's newly renovated waste water treatment plant across the Watauga River, according to court documents. The support line was installed in consideration of the pendency of the lawsuit, according to court documents.
   In the motion for a change of venue, NAF said the city had been allowed to change its original complaint to include recovery of expenses from the new sewer line the city built to bypass the old one. However, the city had reported spending approximately $1.1 million for the new bypass and that additional interest and debt from the new line is expected to cost more than $328,000 over a 20-year period at the current interest rate of 2.8 percent.
   The lawsuit asks that NAF reimburse the city for the costs and damages related to the company's infringement on the city's sewer easement.
   The case is scheduled to go to trial on Monday in Johnson City.