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Ozark Mountain Solid Waste District taxpayers can’t seem to catch a break when it comes to getting their money back after several courts have ruled that the $18 service fee that was imposed against them following the closure of NABORS Landfill was ruled unconstitutional.
Carroll County taxpayers were close to getting their money back after Carroll County Circuit Court Judge Scott Jackson ruled that Bank of the Ozarks (Bank OZK) was found to be in contempt over refusing to return $433,987.10 in taxpayer money to the judge’s court registry in August.
Yet, as has been the case in all of the various lawsuits surrounding NABORS Landfill, Bank OZK and its undisclosed bondholders ran back to Pulaski County Circuit Court Judge Tim Fox to bail them out of an unfavorable ruling, with Fox granting the bank a motion on Sept. 1 enjoining taxpayers from continuing to prosecute claims over the funds.
In June of 2022, Fox issued an order claiming that his Pulaski County Court always had superior jurisdiction over illegal exactions upon property located in Baxter, Boone, Carroll, Marion, Newton and Searcy County despite being equal to each county’s circuit court judge.
Baxter County taxpayers were set to get their shot at getting their money back during a hearing in Marion County last week, but that case has been continued due to Fox’s new ruling. Attorney Matt Bishop expressed his frustration over the continued interference from Pulaski County.
Bank OZK was found to have colluded with NABORS Landfill bondholders, who have somehow remained anonymous despite repeated attempts by attorneys to find out who they are, and ADEQ to impose the unconstitutional $18 fee to recoup their losses in a taxpayer bailout following the OMSWD filing for bankruptcy in 2014.
Fox would give his blessing to the illegal tax in 2017. He would then rule that Bank OZK’s bondholders were entitled to the illegal tax money on June 9, 2022, prompting Bishop to attempt to garnish the money again as the money returned to the bank.
Special Circuit Judge David Laser, who was set to overhear the Baxter County case last week, has told both parties that the funds cannot move until he says so.
“As a result of the Pulaski County Case injunction, Bank OZK remains free to pursue actions such as its Motion to Continue, and the Plaintiff herein cannot defend or pursue collection of final judgments obtained in this court over three years ago. At this point, Plaintiff can do little more than recite the details of the case as set forth above,” wrote Bishop in his response to Bank OZK’s motion for continuance in the Baxter County case.
The War between Courts
On June 8, 2018, JMS Enterprises filed its original complaint against OMZWD and Baxter County Tax Collector Teresa Smith on behalf of taxpayers over the waste district’s $18 service fee. The complaint sought the return of any funds collected via the district’s fee.
In August of the same year, Geoffrey Treece, who was appointed “receiver” for OMSWD by Judge Fox in 2015 after being approached by Bank OZK attorney Lance Miller over the matter in Oct. 2014, would appear before the judge in the Baxter County case to participate in discovery.
In late May of 2016, Treece met with Becky Keogh, who was then serving as the Director of ADEQ, and Michael McAlister, Managing Attorney for ADEQ. Keogh now serves as the State Infrastructure Coordinator for the Arkansas Department of Finance and Administration.
According to Treece’s testimony, Keogh made it clear that ADEQ was “hell-bent” on recovering every “thin dime” it had spent on OMSWD issues. To meet those demands, Treece returned to the drawing board to impose the fee on taxpayers.
Treece would ultimately move forward with the fee on taxpayers after continued pressure from OMSWD, Bank OZK, ADEQ Butch Lomax, a managing director of Crews & Associates. Crews & Associates were not a party to any litigation surrounding NABORS Landfill and had resisted attempts to ascertain if it was a bondholder.
As the Baxter County case played out into 2019, Treece would receive an order from the court preventing him from releasing any funds to any third party, such as the NABORS bondholders, pending further court orders.
Arkansas 14th Judicial District Circuit Judge Andrew Bailey would find that Treece’s $18 fee was unconstitutional in March of 2020. Treece would attempt to appeal the order but would ultimately agree to transfer the money to Bailey’s registry in March of 2020.
A little over a month after Treece agreed to place the collected fees in Bailey’s registry, Treece would file a status report with Judge Fox in Pulaski Couty recommending the money held by Bank OZK be paid to the bondholders, ignoring Bailey’s order. JMS Enterprises, through attorney Matt Bishop, would file garnishments against Bank OZK’s accounts at Equity Bank and Bank OZK.
In response to the garnishments, Bank OZK would file a petition with Fox to place the funds they had illegally collected in his court registry. Fox would agree with no notice given to JMS Enterprises or the taxpayers it represents.
Throughout the ordeal, Treece would continue to communicate with Bank OZK’s lawyers behind the scenes according to emails obtained by the Observer. A total of $2,339,686.59 was placed into Fox’s registry. He would order the release of those funds back to bondholders in June 2022.
Taxpayers in Carroll County would then file a motion to enjoin the delivery of the illegally exacted funds to Bank OZK out of fear that the bank would refuse to return them. Treece promised the Carroll County Circuit Court that the funds would be returned.
“Should the Plaintiff prevail in this action – which for the reasons stated below he is unlikely to do – the Trustee can transmit the funds back to the Carroll County Tax Collector for redistribution to the Plaintiff and the taxpayer. Therefore, there is no risk the taxpayers will suffer irreparable harm.”
Records show that Bank OZK was aware of Treece’s representations to the courts. A notice of material events obtained by the Observer shows that Bank OZK was also giving its anonymous OMSWD bondholders updates on each case as they moved through the courts.
Bank OZK would receive a check in the amount of the proceeds of the illegal $18 charge from six counties on March 16, 2023. A hearing for garnishment was filed in Boone County on May 15. That case is still pending.
A hearing was held in Carroll County over the matter on May 23, with Judge Jackson ruling in favor of taxpayers getting their money back through garnishment. He would find Bank OZK in contempt of court over failing to turn over funds in August.
With Fox now ruling that taxpayers can no longer attempt to get their money back, it is up to each individual circuit court to move their cases forward.