Lake of the Ozarks residents will take land dispute to court

05/24/2014 6:29 PM

06/03/2014 10:17 AM

Here on Screech Owl Circle, where lake water laps at the seawall, doors open slowly when strangers knock.

Residents are worried, or mad, or both. Some won’t talk at all. Because more so than anywhere else at Lake of the Ozarks, this area is game on in the fight against Ameren Missouri, the utility that operates Bagnell Dam and controls the lake.

Nearly everyone on this block is involved or has been involved in a lawsuit or other legal wrangling with Ameren, which announced a few years back that 1,200 or so lake homes, somehow, over decades, got built on land owned by the utility as its buffer around the water that stretches into four counties.

Dwight Weaver, a photographer and writer who has been at the lake more than a half century, put it simply: “People wanted to be as close to the water as possible, and nobody stopped them.”

The first of several lawsuits, which could turn into “squatter rights” cases, is set for trial June 16 in Camden County Circuit Court. At the judge’s gavel, five years after discovery of the boundary mess, fear and sleepless nights will finally give way to points of law.

Ameren denies any wrongdoing, saying the mistakes were made long before it took over the Osage Hydroelectric Project in 1997. It blames the title companies that insured the deeds, saying they were in order.

Those title companies have provided legal counsel to the plaintiffs.

On one side will be the residents who argue they paid for their homes and the tax bills over the years. Some sank their retirement savings into the properties and hoped to pass them along to their children. Some homes had been in families for generations.

On the other side, Ameren will likely stick to deeds going back to the 1920s, when Ozark farmers sold land to make way for the lake. As for taxes, Ameren responds in court documents that it paid every tax bill sent its way.

Early on, the company said the structures might have to be removed. But after intervention by a federal authority, the threat of removal was pulled back. Ameren has since offered to “quitclaim” some residents’ properties down to a certain elevation contour line in exchange for the residents agreeing to cede a strip of land along the shore.

Some residents took the deal even though, in theory, campers could pitch tents on company ground that used to be their backyard. And if their house straddled the new line, a deck would not be included in the “carve-out” conveyance.

Some residents also said they received an IRS Form 1099 for “miscellaneous income.”

Others, such as Dale and Jim Thompson, decided to fight. They didn’t like the idea of Ameren giving them property they had already bought — especially considering the utility wasn’t going to give it all.

“We want what we paid for, and that’s all the way to the water,” Dale Thompson said one day last week as she sat with her husband on the back deck of their home on Screech Owl Circle.

Jim Thompson nodded.

“They (Ameren) could have saved themselves a lot of trouble a long time ago,” he said. “But there was nobody over at that company to say, ‘We can’t do this to these people.’”

The Thompsons sued Ameren, asking for a “quiet title” transfer of ownership. In the alternative, their suit seeks the property based on adverse possession, the legal provision that says if you live somewhere for 10 years and nobody objects, it’s yours.

Ameren declined to answer questions from The Star. Instead it released this statement for this story: “It is regrettable that certain title companies failed to properly note our ownership upon issuing insurance policies to homeowners. Ameren Missouri has not filed suit against any homeowner, and it is unfortunate that instead of taking responsibility for their error, certain title companies have filed needless and wasteful litigation.”

Dale Thompson wants to know why Ameren doesn’t just quitclaim the entire properties to the residents, and she doesn’t buy the company’s reasoning that it must protect the shoreline so nothing can impede the hydroelectric project.

“Show me how this house interferes with their ability to operate the dam,” she said.

By the lake, Bagnell is perhaps 40 miles from the Thompson home.

Camden County Assessor Eddie Whitworth blames the whole fiasco on good ol’ boys pushing rushed development decades ago and nobody paying attention to where houses were being built. At some point, he said, title companies didn’t even mention contour lines.

Whitworth fully understands why some homeowners are fighting — they bought where they did so they can get to the lake.

“If he can’t own (all the way) to the water, that changes the value of the place,” Whitworth said.

“That’s when you need to stand up and bow your chest out and say, ‘This place is mine. I paid for it.’”

Perhaps as much as anyone, Overland Park attorney Tim Sear knows the lake.

He’s studied the history, collected documents, represented lake clients and has a place himself down there near the Niangua arm. A recent day in his office, he unfolded old maps showing farms now long underwater.

But all his resources still don’t explain how men who ran things in the early days let today’s mess get started.

“I don’t know,” Sear said. “And they’re all dead.”

Leland Payton, a Springfield author who has written extensively about the lake, has a theory. And it goes back well before any guys ever yelled at gals at the famous party cove at the 4-mile marker of the Grand Glaize Arm.

All the way back to Walter Cravens and Louis Egan, two men instrumental in the early days of Lake of the Ozarks. Both went to federal prison.

Cravens was a Kansas City banker who was indicted in 1928 for phony loan activities related to land acquisition for the lake. According to Payton’s new book, “Damming the Osage,” which he co-wrote with his wife, Crystal, the parole report for Cravens stated that while president of the Federal Land Bank, “he diverted funds of the bank to finance a large hydroelectric enterprise on the Osage River” and “made false statements as to the financial condition of the bank.”

It went on to say, “Defendant is a very shrewd businessman with a large vision.”

Cravens’ bank building still stands at 15 W. 10th and is part of a walking tour of the Kansas City Public Library district.

Egan was president of Union Electric, the company that built the Bagnell Dam. In a series of stories, the St. Louis Post-Dispatch uncovered that Union Electric under Egan had demanded kickbacks from contractors and then used the payoffs to bribe politicians and newspaper reporters.

According to the Paytons’ book, “Egan regarded Lake of the Ozarks as his own private pond.” He was convicted of corruption in the early 1940s.

Also, in 1940, Frank J. Boehm, a Union Electric vice president, was convicted by a federal jury of two counts of perjury related to a company slush fund.

It was about that time that government regulators told Union Electric to sell off all the land higher than 670 feet above sea level and to control everything below 670 to ensure proper operation of the hydroelectric project. The lake, when full, reaches 660 feet.

Nobody today is accusing Ameren, Union Electric’s successor, of anything illegal. Ameren didn’t take over until almost six decades later. Leland Payton said, however, that those early days perhaps fostered an “indifference” and an affinity for shortcuts that persevered over the years, particularly during the boom times of the 1960s and 1970s.

“My guess is maybe that’s why things there are screwy today,” Payton said.

The new discovery happened when Ameren, as part of its license to operate Bagnell Dam, filed an updated shoreline management plan with the Federal Energy Regulatory Commission. It showed hundreds of houses and decks sitting in the lake’s buffer zone, below the contour line for 670 feet.

At the time, Jeff Green, Ameren’s shoreline management supervisor, blamed hurried development and little government oversight for houses being built on company ground.

When FERC saw the new encroachments, it ordered the “non-conforming” structures to be removed.

That’s when Ameren sent out letters to homeowners saying no action was eminent, “but we can give you no assurances as to the future.” Some angry homeowners immediately said they would stop paying taxes on their homes since they didn’t own them.

Sear, the attorney, advised against such a move.

“Paying the taxes is often the best argument for adverse possession,” he said.

Or has Ameren started paying those bills?

Whitworth, the assessor, smiled at that.

“No … they haven’t come in here and wrestled me to pay the taxes.”

Russell and Marsha Sharp live just a few doors down from the Thompsons on Screech Owl Circle, where some entire lots fall below the 670-foot mark.

So if a warranty deed says the purchaser bought land on that lot above 670 feet, they bought nothing, because none of that lot is above that elevation.

The Sharps’ lawsuit against Ameren claims they have been in exclusive possession of the property down to the water’s edge. They say they have maintained the property and paid the taxes since building the house in 1995. They also say they have a warranty deed and the plat for the Lake Valley subdivision has been recorded with the Camden County recorder of deeds since 1970.

In its response, Ameren cites its own warranty deed — one that’s a lot older — that says it owns everything below the contour line of 670 feet.

“Plaintiffs have never had and do not have a claim or interest in the (property) that is superior to Ameren Missouri’s fee simple absolute ownership. At all times, the location of the project boundary has been a matter of record and Ameren Missouri’s ownership has been a matter of public record.”

The company’s quitclaim offer drops the contour line to 662 feet, the revised elevation set by the federal commission.

Some residents would have been more inclined to accept the company’s quitclaim offer if not for one thing: The strip of land below 662 feet elevation — land that used to be their yard — could be used for public access.

During a deposition for an earlier case, an attorney asked Green, of Ameren, if someone could pitch a tent on that land. Green did not immediately respond.

“Could I spend a weekend there?” the attorney persisted.

“Technically you could,” Green answered.

So some have chosen to fight. Whatever path residents have taken, it’s been a long five years on a lake where the sun shines bright and the water’s fine.

“Everybody just wants it over,” resident Fred Lowtharp said. “But that’s a big company.”

To reach Donald Bradley, call 816-234-4182 or send email to dbradley@kcstar.com.

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