Judge Vann, Mike Ross Clash
|Dissolved title company point of legal disputes
By Josh Flory knoxnews.com
A Lenoir City judge and a prominent Maryville developer are entangled in a legal dispute that also is linked to a federal tax lien against the judge.
The matter is highlighted in a July complaint filed in U.S. District Court by an entity called Assurance Title Co. That company was the plaintiff in the complaint, which stated that members of Assurance included Lenoir City Judge Terry G. Vann, Tracy Riedl and Maryville developer Mike Ross.
Vann, Ross, Riedl and the United States are named as defendants in the suit.
The complaint also says that in the process of filing articles of dissolution for Assurance and terminating its affairs, the firm found itself holding $78,713 payable to Vann. It said the $78,713 stake encompassed proceeds remaining from the assets of Assurance, and that Ross and Riedl also may have a claim to the stake. In addition, the complaint cited a federal tax lien against Vann’s property and named the United States as a claimant to the money.
“As a disinterested party,” the complaint said, “(Assurance) seeks to avoid becoming embroiled in litigation over claimants’ conflicting claims to the stake.”
According to a January 2007 notice filed with the Loudon County Register of Deeds, Vann is facing a $170,573 tax lien for unpaid taxes from 2002, 2003 and 2004. The notice cites a lien in favor of the United States on all property and rights to property belonging to Vann for the amount of the taxes.
In an interview, Vann indicated that he is challenging the finding and said the government files a lien against anyone who challenges what they owe. “The records are full of them,” he said. He also said he has repaid some of the amount in question.
In a written statement, Vann said that he has engaged in negotiations to resolve the tax issues that led to the lien filing, and that the tax issues “relate in good part to the wrongdoings of the other owners of Assurance Title Company.”
The statement said the company was successful, according to tax returns filed by the other owners “who had charge of its management,” adding that the other owners of the company “allocated hundreds of thousands of dollars of income to me on these tax returns and yet never distributed a single penny to me.”
“Worse yet, from the standpoint of creating unnecessary problems with the Internal Revenue Service,” Vann’s statement continued. “They did not give me adequate and timely notice that large amounts of income were being allocated to me on these tax returns. The information was not provided until after the last date for filing my federal income tax return, even after taking into account all extensions.”
In his own filing, Ross said he was a member of Assurance and denied that he had a claim to the $78,713. But in a cross-complaint against Vann, Ross said that “Vann now claims that he is entitled to additional, substantial distributions from Assurance Title and/or its other members.” In his filing, Ross denied that Vann is entitled to additional distributions. In an interview, Ross said Vann had an ownership interest in Assurance.
In her response to the lawsuit, Riedl denied that she had a claim to the stake, but she filed a cross-complaint against Vann that echoes Ross’ complaint. An attorney for Riedl declined to comment.
Assurance also has also come up in a separate complaint originating in Colorado. In September, a Boulder woman filed a lawsuit in U.S. District Court alleging that when she bought a lot in Rarity Mountain — a Campbell County project of Ross’ development firm Rarity Communities — Assurance Title performed the underwriting on a mortgage she obtained in connection with the deal. The suit alleged that Rarity Communities made false representations to her, including “providing title insurance to Ms. Ariowitsch through a title company in which Mr. Ross had an undisclosed ownership interest.”
In an interview, Ross said Assurance probably provided title insurance for people who were buying property in Rarity projects. Asked if his own interest in Assurance was disclosed to buyers, Ross initially said it probably was disclosed, but added that “I’m not sure whether it was or not.”
Asked if a developer has an obligation to disclose such a connection, Ross said he didn’t think so.
“It wasn’t (that) we were trying to hide it. … That’s just a standard title insurance policy that’s issued that the bank requires,” he said.