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Federal Judge Dismisses Kentucky RV Park Suit

October 2, 2009 by   - () Leave a Comment

A federal judge has dismissed a suit by Lakeview RV Park LLC that sought to enforce its contract to lease the city of Richmond, Ky.’s Camp Catalpa Park.

Senior Judge Joseph M. Hood granted the city’s motion to dismiss, citing a clause in the contract that calls for “Any action to interpret or enforce” the lease to be filed “exclusively” in state courts of Madison County, according to the Richmond Register.

While the case was dismissed with prejudice, meaning it may not be retried in federal court, Hood’s ruling states the action may be taken to state court.

The city commission voted Feb. 26, 2008, to lease Camp Catalpa to Lakeview RV Park LLC, whose principal owner is Allen D. Grant Jr.

The commissioners voted March 25, 2008, to void the lease after opponents organized and crowded city hall at subsequent meetings to protest the decision.

Lease opponents said the commission voted without reasonable public notice or consultation. They also claimed the action was veiled by opaque wording on the commission’s Feb. 26 agenda that read: “An Order of the City of Richmond Entering into a Net Ground Lease.”

After the commission reversed its decision, Richmond attorney Michael Eaves, who had drafted the lease contract, said it contained no right of rescission on the city’s part.

Lakeview RV Park, represented in federal court by Greenebaum, Doll & McDonald of Louisville, had argued that by rescinding the lease, the city also had voided the clause that limited legal action only to state courts in Madison County.

If that argument was valid, the judge wrote, the vote to rescind also would have voided the entire contract, leaving the plaintiff no grounds on which to sue.

Hood also cited a precedent he said prevents courts from overriding a contract clause limiting venues for legal action unless it is “unreasonable or unjust.”

Because both parties to the suit and the property in question all reside in Madison County, limiting legal action to state courts here is reasonable, he wrote.

Because the contract was agreed to “after months of discussion between the parties” and the limiting clause is in the same typeface as the rest of the contract, the judge stated, the plaintiff cannot claim it to be fraudulent.

The city was represented in federal court by Sturgill, Turner, Barker & Moloney of Lexington.

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