In a hearing that lasted less than eight minutes Feb. 5, Baldwin County Circuit Court Judge Clark Stankoski wanted to make one thing clear: “I know there have been all kinds of issues with Judge Norton. Having not had this case since 2014, what do I need to look at as far as any conflicts of interest? I want that on the record right now.”
Stankoski was assigned the nearly six-year-old case of Bass Enterprises vs. Pennstar et al. after Judge Joe Norton recused himself last October. Norton, who ruled against the plaintiffs on the substantive arguments of what was essentially an allegation of fraud the week before the case went to trial, later disclosed he had a conflict of interest over his relationship with a non-party business partner of some of the defendants.
Previously, his dismissal of the complaint had been affirmed without an opinion by the Alabama Supreme Court and, coincidentally, he recused himself the same day the Judicial Inquiry Commission acknowledged it had received a complaint about how he handled the case, and the complaint would “receive serious consideration.”
The final matter in the case is the equitable sale for division of 242 acres in Magnolia Springs, initially purchased in 2005 as a site to construct a new sewer plant for Baldwin County Sewer Service (BCSS), Alabama’s largest private utility.
The plaintiff in the case, Phillip Bass, initially alleged BCSS owners Clarence Burke and David DeLaney, along with former County Commissioner Tucker Dorsey and others, engaged in a scheme to sell him a half-interest in the property for roughly $2.4 million, while representing the total sale price as $4.8 million. When permits for the sewer plant were secured, according to the complaint, Bass was told he would be repaid his initial investment plus a $300,000 fee.
Years later, however, Bass discovered he actually paid 100 percent of the price of the property, although the defendants chipped in $700,000 to buy the assignment of a purchase contract Bass was unaware of at the time. Evidence also showed the defendants created a “straw” company to purchase the property, even indemnifying the principal of the company — Dorsey’s college friend, Wayne Hopper — from any future liability.
Throughout the case, Bass was represented by attorney Will Chason, but Chason filed a notice to withdraw Feb. 3. The day before the hearing last week, attorney Riley Powell accepted the job, but told Stankoski he was not ready to proceed.
“We were just engaged yesterday, so we’re doing our best to scramble and get up to speed,” Powell said. “In terms of any kind of conflicts, in the initial case there were a lot of different players — Mr. Burke, Mr. DeLaney, Mr. Hopper — back in the mid-to-late 2000s when there was a lot of wheeling and dealing and buying options and that’s kind of what this is about … I don’t know of any conflicts you may have … but I don’t know who you may have represented in your private practice who may have crossed over.”
Stankoski said “he had not seen” that he ever represented any of the parties in the Bass case, adding income disclosures he filed with the Alabama Ethics Commission and Supreme Court are transparent. As Lagniappe previously reported, Norton’s statements of economic interest on file with the Ethics Commission indicated he reported income from his former law partner Brian Britt in the form of “referral fees” totaling $10,000 to $50,000 between 2014 and 2016, which escalated to between $50,000 and $150,000 in 2017 and 2018, meaning he could have been paid anywhere from $130,000 to $450,000.
The same day Lagniappe questioned those payments last year, Norton recused himself from a separate, year-old fraud case in which Britt was representing the defendant.
Britt later explained Norton was entitled to the payments because they “were from matters that were referred to another firm during the time of [their] partnership,” but neither Britt nor Norton have detailed which case or cases were referred, or which firm handled the referrals, despite requests.
“I would assume with the nature of this case you have seen what I’ve disclosed, and I don’t think I have any conflicts, but I wanted to come right out of the gate and ask anybody if they saw any,” Stankoski told the parties in the Bass case last week. “Just from the contentious nature of this case … I want to get this case done.”
Attorney Larry Sutley, who represents Pennstar LLC, told Stankoski he made an offer to Powell that would allow Powell to choose a real estate agent who would attempt to market the property for six months at the appraised value of $1.4 million.
“If that doesn’t lead to an offer maybe we’ll get back to you at the end of the six-month period with another idea, but that seems to be the most cost-effective way to resolve it,” Sutley said.
But Powell was uncomfortable accepting an offer until he had time to review the case, requesting Stankoski reset the hearing.
“My obligation to my clients is to go through approximately six years of very complex, high-level litigation that went all the way to the Supreme Court and back and see what options they may have,” he said. “I’m going to try to get it resolved. If we propose an order before then, we may not have to have a hearing.”
Stankoski agreed, resetting the hearing for Thursday, Feb. 27.
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