Liberty Grove Sues Sister Bay to Settle 30-Year Dispute

The Town of Liberty Grove initiated legal action against the Village of Sister Bay to settle a dispute about ownership of the wastewater treatment plant that serves Sister Bay and a portion of Liberty Grove. The town has sought part ownership for more than 30 years, when the first intergovernmental agreement was signed by the town and the village in 1988.

The language of the initial agreement clearly defines Sister Bay as the owner of the plant, but Liberty Grove believes subsequent capital investment and legal opinions give the town part ownership.

“The village (Sister Bay) needs and intends to construct, own and operate a wastewater treatment plant to serve the entire Village of Sister Bay, the Town of Liberty Grove and the Town of Liberty Grove Sanitary District No. 1,” stated the 1988 agreement, signed by the board chairmen and municipal attorneys.

The agreement would be revisited in 20 years and since conversations began before 2008, the town and village have not been able to construct a subsequent agreement to settle the ownership issue. Since the 1988 agreement, the town has asserted they should have an ownership interest in the building.

Although the two parties signed an intergovernmental agreement for operation of the plant in 2013, they deliberately left out designation of ownership, hoping to tackle that later.

While representatives for the town have conceded that the original agreement states Sister Bay as the owner, the town received an opinion from attorney Robert Kay of the Madison-based Kay & Andersen, S.C. on Oct. 30, 2006 stating the town does have a case for ownership.

The letter explains the town has invested more than $1.7 million in the plant and associated infrastructure.

“The Town’s involvement in the oversight of the plant, combined with its capital contributions to the plant, give rise to an equitable ownership interest in the plant,” stated the letter, referencing an 1884 text by Supreme Court Justice Joseph Story.

In one instance during the initial exchange of draft agreements in 1988, the village said it would consider joint ownership of the plant through a commission, but that consideration was not a part of the final signed agreement.

The town believes a July 6, 2004, letter from village attorney Randy Nesbitt, to town attorney Jack Bruce, also admits town ownership in the plant when Nesbitt stated, “It has been the position and understanding of the Village of Sister Bay that the Town of Liberty Grove is a joint owner in sewer commission assets…”

The years after the expiration of the original agreement in 2008 were a mess of hearsay, foggy memories and accusations of stalling discussion by both sides.

Eventually, the two municipalities agreed they were getting nowhere.

The village, pursuant to the dispute resolution process outlined in both the 1988 and 2013 agreement, suggested a mediator to help the municipalities settle the matter. The village then sent Liberty Grove an offer: The village will pay the town $102,557.38 and Liberty Grove’s Utility District $12,977.15 from the sale of a piece of property originally intended to house an expansion of the wastewater treatment plant. The village would also kick in $27,250 for legal fees that the village would otherwise be paying if the dispute went to court. All the town had to do was relinquish any claim to ownership, now and forever.

Liberty Grove rejected the offer, failed in getting village approval for their own recommendation of a mediator and brought litigation against the village to settle the dispute.

On Jan. 24 of this year, the village sent a notice of claim to the town, effectively claiming legal ownership of the wastewater treatment plant. The town made a similar notice of claim against the village in February.

If the last 10 years of dispute regarding ownership and a subsequent agreement that does not specify ownership is any indication, the debate will likely go to court before settlement.

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