The office of Attorney General Leslie Rutledge filed a preliminary injunction in Faulkner County Circuit on Friday citing violations of the Arkansas Deceptive Trade Practice Act against a local business owner.
The Log Cabin Democrat received a copy of court documents filed on Friday around 2:30 p.m.
Bruce Keathley, of Diamond K. Investments, Inc, is owner and landlord of Brookside Village Mobile Home Park in Conway. In April, he sent eviction letters to all tenants – 300 people in 114 households – giving them until June 30 to relocate, citing increases in water and sewer rates by Conway Corporation as his reason to cease operations at the park.
According to Crystal Kemp with Conway Corp, they haven’t increased wastewater since 2014 and their last water increase was in 2017.
On April 30, Shawn Johnson senior assistant attorney general and investigator Shamikah Johnson with Rutledge’s office spoke with Mark Riable, attorney for Keathley about his plan to close the park, Rutledge’s office expressing concern that residents wouldn’t have enough time to find alternative homes.
“Riable expressed that Defendants were amenable to the possibility of granting more time,” documents state.
According to court documents:
• The attorney general issued Civil Investigative Demand to Riable concerned with mobile home park’s ownership rights in various mobile home on May 21.
• Response provided by June 21.
• Keathley send letter to tenants threatening to shut off their water if June rent wasn’t paid.
• Attorney general’s office learns around 30 families likely to need more time beyond July 1 date.
• Attorney general’s office spoke with Keathley’s counsel, Danny Crabtree, and learns defendant is willing to extend through July 15 if Conway Corporation continued to supply water “free of charge” or “at a reduced rate.”
The Log Cabin Democrat asked Kemp about that. She said they are billing Keathley for service after June 30 to July 15 but did tell him they would work with him on how to pay that but, based on city ordinances, they bill based on usage and cannot do free service.
“If water is used, we bill for it,” she said.
On the final day, July 15 all water in the park was shut off – Conway Corporation confirmed a request was received to do so – with 21 households estimated to be remaining in the park. City of Hope Outreach Executive Director Phil Fletcher confirmed on Friday that 15 of those were in hotels or had found alternative places to stay, the other six he said he was unsure of.
The LCD drove through the park on Friday and saw several people walking along the streets and in and out of trailers.
Per court documents, the six remaining that refused to leave were living in their trailers without electricity or water but Kemp clarified with the LCD that they did not shut off anybody’s electricity.
Kemp noted the important differences between Conway Corporation’s relationship with customer and tenant regarding both water and electricity.
With electricity, their relationship is to the customer and that customer, in this case the tenants, has to request service on or off. As of Friday, Kemp confirmed that they still had 10 active accounts.
“Your landlord can not come to us and say, ‘hey can you shut off their power,’” Kemp said. “We cannot shut off ... for any landlord in town. Electricity is billed per trailer with some meters being connected under the landlord’s name and others being connected under the tenant’s name.”
As far as water goes, she said in this case, their customer is Keathley. Kemp said there are two water meters out at Brookside, Conway Corp delivers the water and Keathley delivers it through the system to his tenants.
“He has a way to shut off water within the system,” Kemp said. “He is our water customer.”
Water is billed from those two separate water meters, she said, and wastewater is billed based on the water usage of these meters. Included in the bill is a flat rate customer charge and then water rate based on usage.
The preliminary junction filed was granted by Faulkner County Circuit Judge Susan K. Weaver shortly after 2 p.m. on Friday. Having reviewed the complaint, the court approved the request based on the following reasons:
1.) The “verified complaint” alleged violations of the Arkansas Deceptive Trade Practice Act against Diamond K. Investments, Inc., a for-profit corporation, which owns Brookside.
2.) Attorney general has authority to pursue injunction to prevent “false, deceptive, misleading, or unconscionable business practices,” defined as “one that affronts the sense of justice, decency, or reasonableness, including acts that violate public policy or statute.”
3.) In seeking the injunction, attorney general need only show reason to believe violations are being committed.
Considering the above, the court granted in favor of Rutledge’s office because defendants “have resorted to shutting off the water and electric utilities for their tenants without pursuing legal remedies,” which constitute “self-help evictions,” and are “unconscionable, false, or deceptive acts or practices in business, commerce, or trade,” documents state.
As a result, Judge Weaver ordered water and electric to be connected to any households in Brookside and if further actions to evict any resident were to take place, defendants would be found in contempt.
Hearing the injunction was approved, the LCD reached out to CoHO’s Fletcher.
“I think that’s awesome news,” he said.
Administrators also jumped on the Brookside Family Support Page on Facebook, which was created in April, to share the good news.
“It’s not over until it’s over. Justice is coming!” the page reads.
The order remains until the hearing on the matter set for 10:30 a.m. July 22.
The LCD reached out to Riable but did not receive a reply by press time Saturday.