This morning I filed a complaint found here (Summons and Complaint) in the 33rd Circuit Court on behalf of the State of Michigan against Dennis Lee Hass and the Walloon Lake Water System, Inc. I am asking the court to order the defendants to pay a civil fine of $25,000 for violating an Assurance of Discontinuance, an agreement they signed with my office on September 10, 2013.
Prior to me taking office in January 2013, Mr. Hass was charged with a number of crimes, as was his wife. The primary charges were for criminal enterprise, where it was alleged that Mr. and Mrs. Hass were operating their business, the Walloon Lake Water System, in a manner that was essentially criminal in nature.
Judge Richard W. May dismissed these charges in late 2012. A few of the lesser charges against Mr. Hass were bound over to circuit court, including extortion and slander of title.
I reviewed the pending charges and the evidence that had been obtained, spoke with many witnesses and customers of WLWS as well as officials from the State of Michigan and determined that, though there was probable cause to believe that crimes were committed, as was determined by Judge May, this was a matter that was more civil than criminal in nature and called for a remedy that would not just result in a small fine, but that could potentially change the way that the business was operated.
The Attorney General and county prosecuting attorneys have the right to file actions under the Michigan Consumer Protection Act (MCPA). Under that same law, we also have the right to accept an Assurance of Discontinuance from a person or business instead of filing an action.
An Assurance of Discontinuance is an agreement where the party, in this case, Mr. Hass and WLWS, agrees to discontinue certain actions that are allegedly violations of the MCPA. The Assurance can also provide for payment of restitution to victims, as was done in this case – WLWS paid $7,500 to victims.
Once I received this Assurance, which would give my office oversight over WLWS, I dismissed the remaining charges against Mr. Hass without prejudice.
In addition to stopping the activities that led to the criminal charges, through the Assurance Mr. Hass and WLWS agreed that they would not retaliate against any of their victims or alleged victims.
Despite this agreement, they filed a lawsuit in Federal Court in Grand Rapids in July of this year. The people they sued include five customers of WLWS who were victims in the prior criminal case.
These people, customers of WLWS, were sued simply because they gave information to police or prosecutor’s office as part of the criminal investigation or were called to testify for the prosecution. I personally believe that the lawsuit is meritless and will ultimately be dismissed but the fact is these people should not have been sued for telling the truth to investigators.
I believe that this suit is retaliation for these actions by any definition, and as such is a violation of the Assurance of Discontinuance as to each customer who was sued. These five violations of the Assurance are punishable under Michigan law of a fine of $25,000 or $5,000 per violation.
Once the defendants are served with the complaint, they will have 21 days to respond. After I received their response, it is likely I will file a motion for summary disposition asking the judge to decide the case summarily as I do not believe there are any factual disputes involved.
While this will not put money in the pockets of the customers wrongly sued, it will serve as a reminder to the defendants that they are not above the law and they need to comply with agreements they enter into, especially with the Prosecuting Attorney’s Office and the State of Michigan. Hopefully it will also strongly encourage Mr. Hass to dismiss the lawsuit against his customers.