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Carroll, Hillsville going to court

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Water billing issue surfaces again

By Christopher Brooke, Reporter

HILLSVILLE — Attorneys for Carroll County and Hillsville continue to gird up for a three-day civil trial to finally settle a seven-year-old utilities billing disagreement.

After Hillsville sought payment for water and sewer services to the Interstate 77 area in 2003, Carroll County declined.

Hillsville appealed the matter to Carroll County Circuit Court, and Carroll County responded with a counterclaim, saying that the town had been over-billing the county for service for years.

As Hillsville sought payment of $156,199, Carroll officials claimed the town owed $426,261 due to overcharging for the utilities.

County officials have cited a 1953 agreement, noting that Carroll provided funds to help the town create wastewater treatment facilities in exchange for free services for an indefinite period.

Town officials go back to a 1986 contract as the basis for the billing.

Copies of the contract and a letter from the county administrator's office about its  acceptance make up two of the town's exhibits in the case.

County officials have objected to the methods used to calculate the fees under that contract, saying that it charges Carroll for elements in the utility systems not used to provide service to the county.

Since this disagreement began, the issue has been considered by three different boards of supervisors, been through extended negotiations between the town and the county, and nearly saw an agreement that included a boundary adjustment and a rates resolution, only to have Rural Development quash it because the federal agency figured the rates proposed by the town were too high.

Officials from both localities — as they moved to reinstate the civil case in 2009 — denied that they wanted the billing disagreement to end up in court.

"We have no interest in going to court over anything," said County Administrator Gary Larrowe.

"We're not looking to go to court and waste peoples' time, energy and resources," said Town Manager Larry South at the time.

Offers and counteroffers had been made in a renewed effort to again settle this case, but to no avail.

So June 15-17, both sides will spend three days in Carroll Circuit Court arguing their cases before a judge. No jury will be seated.

The court has ordered the attorneys to wrap up discovery and deposition by May 17, in preparation for the trial.

A pre-trial hearing is scheduled for March 30, as Hillsville's attorney has asked for a hearing on a summary judgment on elements of Carroll County's counterclaim.

Carter Glass IV, the town's attorney, argues that two of Carroll's claims "are improper attempts to turn contractual claims into tort claims," according to a Feb. 3 court filing.

Glass also asked the court to rule on elements of Carroll's legal filings because they fall outside the statute of limitations.

In the counterclaim, Carroll's attorney argues in count II that "the town knowingly, falsely and with intent to defraud misrepresented a material fact by overcharging the county for fiscal years 1997 to 2002, a total of $426,261," according to court papers.

"Said misrepresentation constitutes actual fraud by the town upon the county entitling the county to a refund of the amount overcharged for these periods as well as any other periods since the inception of the 1986 contract ... plus punitive damages."

Count III is similar, saying that " the town negligently, carelessly or recklessly misrepresented a material fact by overcharging the county for fiscal years 1997 through 2002...."

Carroll's request for relief asked the court to dismiss Hillsville's breach of contract action and find the town had breached the 1986 contract.

Carroll asked for an award of $426,261 from the town, plus "a like amount for punitive damages," court costs, attorney's fees and more.