According to a transcript of proceedings for an Oct. 22 sale for division hearing at the culmination of a 5-year-old Baldwin County fraud case, Judge Joe Norton recused himself after implying he may have a conflict of interest and the plaintiff’s attorney said his client would “feel more comfortable with another judge.”
Lagniappe first reported the recusal on Oct. 30, as part of ongoing coverage of a 2014 case that accused the owners of Baldwin County Sewer Service (BCSS) of a fraudulent land purchase. Norton issued a summary judgment in favor of the defendants four days before a jury trial in 2017 and, after appeals, has since been presiding over the sale of the property, 242 acres in Magnolia Springs initially planned to be the site of a sewage treatment facility.
While details were unclear at the time, the transcript reveals the suggestion for recusal came from Norton himself, after he received an appraisal report for the property, which included a comparable sale — one of six — “where the developer … currently works with my wife.”
Laura Norton is the co-owner of Wise Living Real Estate, which is marketing The Verandas subdivision off State Route 104 in Fairhope. The owner of the property, Albert “Trae” Corte, is also a member of Wise Living’s sales team. Corte has previously developed property with Clarence Burke and entered into financial agreements with David DeLaney, both of whom are defendants in the case.
According to documents submitted in the case, Burke and DeLaney were co-owners of BCSS and Pennstar LLC, as well as many other companies involved in Baldwin County real estate ventures.
“And before I go forward, I just want — any further, I just wanted to determine if that in any way affects the way we should go forward with the case here today,” Norton said shortly after the hearing began Oct. 22.
After a brief discussion, Norton recessed momentarily to allow the plaintiffs’ attorney, Will Chason, to review the appraisal and discuss it with his clients. When Norton returned, Chason said his client “does not have a problem with that fact alone.”
The discussion continued:
“You say, as to ‘that alone.’ Is there some other — do you have any other concerns that you have?” Norton asked.
Chason replied: “Your Honor, we are here today about, you know, submitting the bids to Your Honor per the court’s order. Mr. [Joseph M.] Courtney did this appraisal pursuant to your order. He used this comparable sale. Right now, based on this information, we don’t have a problem with him using this comparable sale.”
Norton: “But you keep saying, like ‘right now.’ I mean here’s what the — you know, again, you both agree that the property cannot be equitably divided and should be sold for division. You also agreed to have Mr. Courtney appraise the property.”
Chason: “Yes, sir.”
Norton: “However, you both filed notices of intent to purchase the property. And so you have no agreement as to which of you is going to purchase the property ultimately on those notices or the sales price that the Court will be asked to or called upon to ultimately prove in the case.”
Chason: “Yes, sir.”
Norton: “And because those matters remain unresolved, Mr. Courtney’s appraisal and the supporting information in that appraisal, including those six comparable sales, are going to be relied upon by you-all as well as the court in resolving these matters. And if you feel that that’s an issue — and I can’t get a good feel of whether it is or not — then if you have some concerns, then, you know, I am happy to address those.”
Both Chason and defense attorney Larry Sutley, representing Burke and Pennstar, agreed they did not have a problem with proceeding. Then, Norton said if neither party had an issue with his potential conflict, “I’m prepared to go forward with this sale today.”
Norton was scheduled to accept sealed bids from both parties and award the sale to the highest bidder. Afterward, another hearing would have been held to approve the sale.
“That’s really where, in my mind, I can see — do you think that would be an issue down the road in the decision to approve the sale?” Norton asked Chason.
“Currently, with what I know today, no,” Chason replied. “You know, with what I know today, the fact that Mr. Courtney used The Verandas sale as one of his six comparable sales to come up with this number … that’s not a problem for us to submit a bid .…”
But Norton still seemed reluctant to move forward.
“And so you’re saying you want to reserve the right to raise the issue for the approval process?” he asked. “Before I do anything else, I want to make sure we’re all comfortable, because just based on what I’m saying is, absent a waiver of conflict, or whatever you want to call it, I would — you know, I brought this to your attention. And so if y’all think that it’s … a conflict, then I’ll be happy to address it.”
Chason: “Judge, I guess my response to that would be, I mean, is Your Honor comfortable? Does Your Honor think there is a conflict? You might know more than I know.”
Norton: “I have the information that was provided to me and I have brought it to you-all’s attention … I just saw it in the report and I brought it to you-all’s attention.”
For context, Lagniappe first reported about a potential conflict of interest between Norton and Corte in a news story dated Sept. 18. That week, after inquiring with the judge about potential conflicts, he recused himself from a separate case involving his former law partner, Brian Britt. According to documents filed with the Alabama Ethics Commission, Norton has received payments from Britt totaling between $130,000 and $450,000 in the years 2014 to 2018, yet presided over Britt’s case for more than a year.
Britt also briefly represented Hons Builders in a temporary restraining order against the city of Daphne in Norton’s courtroom in 2012. There, Norton set a pretrial conference, but before it was scheduled, both parties filed a joint stipulation for dismissal, which Norton signed in March 2013.
According to building permits filed with the city of Fairhope, Jason Hons is listed as the builder currently constructing a new home for the Nortons in Fairhope.
In both cases, Britt later dismissed any notion of impropriety, telling Lagniappe the fees paid to Norton “were from matters that were referred to another firm during the time of [their] partnership … so he’s entitled to his share of those fees.” However, neither Britt nor Norton have been willing to disclose which case or cases were referred, or to whom.
Back at the hearing Oct. 22, Norton appeared to switch gears. If he was to continue to preside, he didn’t just want a verbal agreement from both parties, he wanted a waiver of conflict.
“Now that I have brought it to your attention, I do feel that everybody is going to have to waive this as a conflict so that we can move forward,” he said.
Sutley said he didn’t see a conflict, but immediately waived one anyway. Chason hesitated.
“Your Honor, I’m not sure what I would be waiving,” he said. “If what we are talking about is strictly the appraisal and strictly the fact that Mr. Courtney used the sale to The Verandas, if that is all we are talking about, then we are OK with moving forward … it makes me a little bit uneasy waiving something that maybe I don’t know exists out there … I don’t want to be on the record waiving something that perhaps I don’t know today.”
Without a waiver, Norton refused to go on.
“I would be inclined to set aside that order of Aug. 27, or at least as it relates to the manner in which the sale is to be considered and recuse, then,” he said.
Sutley protested, suggesting Chason could simply waive the conflict with The Verandas specifically so the proceedings could continue. But again, Chason expressed hesitations about the unknowns of Norton’s conflict.
“Knowing what you know about this case, about Trae Corte … If any of that makes you uncomfortable and you want to recuse yourself, my client is not going to object to that,” he said.
Norton replied: “All I know is what I have divulged to you-all … that’s in the report … that’s all I have.”
Then Chason said it was his understanding Corte had a relationship with Burke.
“Then we don’t have to go any further,” Norton replied. “Then I will recuse.”
The plaintiff in the case, Phillip Bass, initially alleged BCSS owners Clarence Burke, David DeLaney, former County Commissioner Tucker Dorsey and others were part of a scheme to sell him a half-interest in the property for roughly $2.4 million, 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.
As Lagniappe reported last week, on Oct. 8, Bass’s daughter-in-law, Karen Bass, filed a complaint against Norton to the Judicial Inquiry Commission (JIC), claiming he violated several judicial canons and rules of civil procedure while presiding over the case, “allowing the defendants to change [the] case from fraud into a property value dispute.”
The same day as the sale for division hearing, the JIC wrote back to Karen Bass to confirm its receipt of the complaint and indicating it would “receive serious consideration” when presented to the commission at one of its meetings scheduled every eight weeks.
In stepping down from the case, Norton also vacated an Aug. 27 order setting the property’s sale for division. According to the court records, the case has yet to be reassigned to another judge and a new hearing date has not been set.
Documents and reports related to this case are compiled online at lagniappemobile.com/series/bcss.
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