Judge clears way for Sapphire owner to close wastewater treatment plant
Published: April 8, 2014
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ST. THOMAS - V.I. Superior Court Judge Adam Christian dissolved the temporary restraining order at Sapphire Resort on St. Thomas on Monday, allowing the property owner to cut off sewage treatment to the condominium association starting at 5 p.m. today.
Last month, Beachside Associates cut off sewage treatment for the majority of condo units at Sapphire Beach Resort and Marina. The move was in response to an overdue payment on an arbitration award settlement totaling $1.1 million.
Beachside Associates principle Dean Morehouse and his legal counsel were in court Monday to defend the company against several motions filed by the condo association's lawyer, Jim Derr.
Both sides have been embroiled in legal disputes over property for years.
Beachside owns much of the property at the resort, including the parking areas, pool, wastewater treatment plant, reverse osmosis plant and the Seagrape building that used to contain the lobby and restaurants.
The condo association owns the six condominium buildings and the marina.
The condo association filed a motion in March asking the court to preserve the status quo - leave the condo units with use of the wastewater treatment plant - and confirm a previous arbitration award regarding the use of the wastewater facility.
Last year, the dispute went to arbitration and a final award was determined, but both sides had objections and filed motions in court, and the court has not yet confirmed the arbitrator's decision.
On Monday, Christian said he was not sure the settlement reached by the arbitration qualifies as a final award, because it leaves both sides to negotiate the terms of payment.
While the condo association was seeking a preliminary injunction to have the judge uphold the final award with some changes, Christian denied that motion.
"The association is able and willing to meet at least most of the requirements of the arbitration award," Christian said.
He said the association originally wanted certain parts of the final award vacated, but during the hearing Monday, that did not seem to be the case.
"So, I can't find preliminary injunction," the judge said.
In testimony during Monday's hearing, several witnesses stated that the wastewater treatment facility at Sapphire had not spilled any sewage at any point. The major concern from the condo association is that they will not be able to pump out sewage on the weekends, because the Mangrove Lagoon Waste Water Treatment Plant in Bovoni is closed on weekends. The Mangrove Lagoon facility is the only facility that can accept wastewater and sewage.
Lorne Henley, owner of Big Lorne's Sewage Removal, told the court Monday that if he calls in advance, Waste Management Authority employees usually will meet him on the weekend and open the facility so he can drop off waste.
Christian said with no record of spillage, the condo association's ability to pay to pump out the sewage as it accumulates, and the possibility of weekend disposal at the Mangrove Lagoon treatment plant, there is no reason to keep the temporary restraining order in place.
"So, the public interest factor that I relied on for my TRO does not exist," Christian said.
According to the arbitrator, the condo association owes Beachside $1.1 million for years of use of the wastewater plant. The association has been paying $5,000 per month since May 2006 for usage of the facility, but that was not enough, according to the arbitration findings.
Beachside indicated that it costs about $13,000 per month to operate the sewage treatment facility, according to court documents.
The arbitrator's final award specified that the parties negotiate a payment plan over a five-year period.
Beachside interpreted that to mean that the association should pay one-fifth of the payment each year, plus interest.
On March 14, Beachside's attorney sent a letter to the condo association indicating that unless they received $313,754.68 - one-fifth of the $1.1 million - the plant would stop taking the condo association's sewage.
The condo association interpreted the settlement document to mean that the $1.1 million payment would be divvied up into monthly payments over the five years, according to their attorney.
Beachside Associates bought the mortgage on the property for about $1.8 million in 2003, according to Derr.
The property - everything but the condo units and marina - was owned by a company called Bayside Resort.
In July 2005, Bayside Resort abandoned the property, which included the Seagrape building that housed the public bathrooms, a restaurant, main lobby and bar.
In 2011, a foreclosure action was filed in V.I. Superior Court, and at a court auction in December, Beachside obtained ownership of the property.
Parts of the Seagrape building were boarded up several years ago, and the rest was shuttered in January. Access to the taxi drop-off area and the public beach parking lot also was blocked in January, although the parking area has since reopened.
Christian asked both sides to submit briefs about the remaining disputes by April 28, with responses to be filed by May 12.
In the meantime, Beachside can cut off wastewater treatment for the condo association, which must rely on a sewage hauler to pump out and dispose of the resort's wastewater.
Condo association president Marcia Heller said Monday the association has filed permit applications to install its own septic system for the condos and marina.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.