Meijer and Village to pay $1.5M

Meijer-Acme Township Dispute

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Jan-Michael Stump

April 30, 2009

Meijer and Village to pay $1.5M

BY BRIAN McGILLIVARY The Record Eagle Thu Apr 30, 2009, 06:52 AM EDT

TRAVERSE CITY -- For years they fought, bitterly so. With lawsuits and countersuits and sometimes illegally waged election campaigns.

At stake: control over development in Grand Traverse County's Acme Township.

The players: Acme Township's elected officials and a development group headed by Meijer Inc. and the Village at Grand Traverse.

On Wednesday, an agreement in 13th Circuit Court likely closed the door on much of the contentiousness that since 2004 dominated this farming and bedroom community. Meijer and the Village agreed to pay five Acme officials a combined $1.5 million to settle a malicious prosecution lawsuit.

Acme planning Commissioners Robert Carstens and Clare David, as well as Trustees Ron Hardin, Erick Takayama and Frank Zarafonitis, each will receive $300,000 before taxes and attorney fees.

Their victory came about 16 months after former Acme Treasurer Bill Boltres won an undisclosed sum when Meijer settled a similar malicious prosecution suit. Details that emerged during Boltres' legal battle exposed Meijer's illegal campaign activity in 2004 and 2007 elections in Acme, and prompted Boltres' fellow government officials to follow his lawsuit lead.

The Acme officials said they settled for several reasons and cited lawsuit stress, a need for the community to heal, and their hope the award was sufficient to deter Meijer and other developers from abusing local governments.

"Every one of these people suffered a great deal of stress and the impact on our lives and our families was terrible," Takayama said. "We all felt this was enough of a fine, enough of a settlement cost to Meijer, that there was a lesson that this is not the path to take for developers."

Unnamed Meijer officials said in a joint press release they regretted the situation that led to the suit. They apologized to the community and individuals affected by their actions.

Lawyers for Meijer and Dickinson Wright, Meijer's law firm during the Acme development process, refused comment on Wednesday. Janet Kelley, Meijer's senior vice president and general counsel, would not comment, and messages left with Meijer Co-Chairman and CEO Hendrik Meijer, President Mark Murray and spokesman Frank Guglielmi were not returned.

An official with the Village said he was pleased to close the door on a case that inflamed the Acme community.

"I just think it's in everybody's interest to move on, and I'm happy to have this behind me," said Steve Smith, the Village's managing partner. "I've never been in litigation before in my life, and I regret that litigation resulted from this."

Nerve-wracking case

Acme officials alleged that Meijer, the Village and their former attorneys, Dickinson Wright PLLC and Timothy Stoepker, intentionally harmed them through a frivolous lawsuit, illegal campaign activity and secret financial support of a citizens group that harassed them.

Meijer and the Village sought to build a large, hotly contested development along M-72 and sued both Acme Township and eight officials individually in 2005. Acme officials counter-sued in 2008, and attorneys for Meijer and Dickinson Wright filed several appeals that delayed the lawsuit.

Zarafonitis said he never realized that suing Meijer and the Village could be so nerve-wracking.

Taking a role as a plaintiff was as difficult as when Meijer targeted Zarafonitis and other Acme township officials in a 2007 suit, he said.

"It was more bothersome, waiting to see what was going to happen next, thinking about it every day. It just ate at me," Zarafonitis said. "I'm just happy it's over."

Traverse City attorneys Michael Dettmer and Robert Garvey represented the local officials. Even a potential victory at trial would have prompted appeals that could have dragged out the suit for years.

"This took one year to get from where we started to here, and if they continued the appeal process it could take 10 more years, and I didn't particularly look forward to being involved for that amount of time," Carstens said. "From my perspective, that's not particularly healthy."

Carstens said memories lingered of secret tactics Meijer and its partners used against township officials between 2004-08.

"You're wondering, are your phones tapped, if you can trust people, if you can talk about things freely," Carstens said. "It engendered considerable paranoia."

Acme officials' decision to sue for malicious prosecution and abuse of court process was prompted by what they perceived as the state's failure to adequately punish Meijer and its partners, Dettmer said.

Meijer last year acknowledged wrongdoing and paid the state more than $190,000 for felony violations of Michigan campaign finance laws. Meijer's confession came after Boltres sued the Grand Rapids-based retailer and depositions in that case uncovered the company's illegal activity.

"Taking that $190,000 was a slap on the wrist and really fired up these people," Dettmer said.

Acme officials hoped for punitive damages against Meijer, but Michigan law wouldn't allow such awards, a fact that "took away a lot of our thunder," Hardin said.

Acme officials decided the settlement, at almost eight times the penalty imposed by the Secretary of State's office, would serve as a deterrent.

Dettmer and Garvey will receive 25 percent, or $375,000, Garvey said. The awards are taxed before attorney fees are deducted, so Acme officials can expect to clear around $100,000 each.

"None of us are quitting our day jobs over this deal," Hardin said. "We didn't do this for money. We were looking for a damage award that had some punitive weight so no one would ever have to live through this again."

Mixed reviews in community

Acme residents offered mixed reviews when they learned of the agreement.

Resident Andy Andres said he thought Meijer and the Village received a raw deal from the township. Its officials should have anticipated trouble, including legal action, he said.

"You can get sued for going to church today," Andres said. "I don't feel those officials had the money coming."

Denny Rohn, president of Concerned Citizens of Acme Township, professed disappointment with the settlement. Rohn said Meijer and the Village should reimburse the township for costs associated with 2004 and 2007 elections.

CCAT Member Paul Brink said he believes key aspects of the years-long battle went untold, and he suspects a trial would have provided more insight to the developers' dealings in the township. But he also sympathized with the Acme officials, many of whom he knows personally.

"I think they deserve some compensation. I know how much sweat and sleepless nights they went through," Brink said.

Former township Clerk Noelle Knopf, whom voters ousted in the 2004 primary, defended Meijer.

"Needless to say, I don't think Meijer and the Village should have had to pay anything to the board officials, all (they) did was delay, delay, delay and cost them millions of dollars."

Garvey, who also owns a home in Acme Township, said it's not unusual for local officials to back down when faced by harsh pressure from developers. He called the settlement "almost a landmark" for such a legal claim in Michigan, a victory that may dissuade others from using so-called SLAPP suits to intimidate local officials.

"I think the award was enough under the circumstances to send a message to Meijer," Garvey said. "You got to sell a lot ... to make up $1.5 million."

The settlement prevents the parties from suing each other again over anything related to the proposed developments, with one exception.

Meijer and the Village preserved their right to sue Dickinson Wright and its attorneys. The law firm did not contribute to the settlement, Dettmer said.

"I think they are going to go after (Dickinson Wright)," Dettmer said. "I think they want reimbursement for the money and they weren't happy about how they were represented by Dickinson Wright."

Township Clerk Dorothy Dunville said she's glad to see the case end.

"I think we're mending fences," Dunville said. "But I do wonder what the settlement tells us. Does it tell you Meijer just wanted it over with, or are there things they don't want us to know about?"