A Message ... FROM THE ASSOCIATION PRESIDENT
EPCOR LITIGATION We have an update on our lawsuit against EPCOR related to community pond liners. After months of legal proceedings and many attempts to reach a settlement with EPCOR, the difficult decision was made to dismiss our lawsuit. This lawsuit arose after we noticed some damage to the clubhouse pond liners and collars. After reviewing the matter, our legal committee and outside counsel
advised the Board that there was a strong case for holding EPCOR responsible for the liner deterioration. Initial attempts to reach an agreement were unsuccessful, so a business decision was made to start legal proceedings. This ended up being a protracted undertaking, and as can happen when facing a well-funded opponent, the costs of continuing became untenable. There were also some unfavorable rulings by the Judge, and it was concluded that a Tonto “Win” or any meaningful settlement was unlikely. As part of the dismissal, EPCOR requested and was awarded a reimbursement of their legal fees in the amount of $386,015. We were able to negotiate a $50,000 discount, and on December 12, 2024, we paid EPCOR $336,015 to conclude the case. This outcome is obviously extremely disappointing to the Legal Committee, our outside counsel, the Board, and all of us as residents of Tonto. We know the ponds will need repairs at some point, however, we are unaware of any risk of catastrophic failure. We are hoping any significant repair can be avoided or delayed well into the future. During this time, we will continue to build our reserves to fund repair needs as they occur. Fortunately, in satisfying this fee award to EPCOR, no special assessment will be necessary. The TVA has more than sufficient reserve funds, a portion of which are earmarked for the community ponds, to pay these fees. Any money spent to prosecute the lawsuit is considered solely in furtherance of the pond repair and maintenance needs and accordingly, a justifiable reserve expense.
Tom Schouten, President TVA
3 | ASSOCIATION
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