Judges order Mill Creek Water Reclamation District to pay developer more than $2.6M

BLACKBERRY TOWNSHIP – The Second District Appellate Court in Elgin ruled Nov. 29 that the Mill Creek Water Reclamation District owes more than $2.6 million to Shodeen Inc. and other entities related to the development of the Mill Creek subdivision and its water and wastewater system.

In a 25-page ruling on a years-long legal conflict between the district and the developer, the three-judge panel was unanimous in deciding in favor of Shodeen, ruling that it was due a total of $2,616,079.36 in unpaid back rent from the district.

Shodeen established the water and wastewater system in 1992 so the subdivision could be built, according to court records.

The water reclamation district and a trust where Kent W. Shodeen was a trustee entered into a purchase and lease agreement with the district in 1995.

The district agreed to buy the water and wastewater systems and pay rent to discharge the water on the golf courses, Tanna Farms LLC and Mill Creek County Club Inc., owned by Shodeen, according to the appellate decision.

In 2012, the reclamation district stopped paying rent and filed suit against Shodeen on Dec. 1, 2014, seeking to have the previous agreements declared void because the first members of the reclamation district were related to Shodeen, among other reasons, records show.

In response, Shodeen filed suit against the water reclamation district on July 2, 2015, seeking damages for unpaid rent – that is, for the district to pay for to discharge wastewater to irrigate the golf courses, records show.

The two cases were consolidated, and after a bench trial, Kane County Judge Mark Pheanis awarded the district nearly $2.7 million for damages for a breached agreement and Shodeen more than $2.6 million for unpaid rent, also in breach of their agreement. The difference between the two was just under $63,000.

Both appealed and the court combined the cross appeals, resulting in affirming the judgment last week in favor of Shodeen and reversing the judgment for the district.

“Obviously, we are pleased by the Appellate Court’s ruling,” Shodeen attorney Matthew Herman stated in an email. “The reclamation district initiated the lawsuit – not us. When it was filed in 2014, we strongly believed it was ill-conceived and without merit. This ruling vindicates our belief.”

Daniel Whiston, attorney for the Mill Creek Water Reclamation District, said he could not comment until he meets with the board Tuesday night.

The reclamation district serves about 6,600 customers in the subdivision, located within Blackberry and Geneva townships, and includes the residential and commercial areas and two golf courses.

A special meeting is scheduled for 6 p.m. tonight at the district’s facility plant, 39W889 Wellington Way, Blackberry Township. The agenda states the meeting is closed to discuss the lawsuit and the appellate decision with possible action to follow in open session.

The water reclamation district website, www.millcreekwrd.com includes letters to residents about the lawsuits, as well as its court filings.