In January 2021, the City of Rusk filed suit against Jan Pate for nonpayment of sewer services. Trial was held Wednesday, July 13 in the Justice of the Peace Precinct 1 court with visiting judge Darlene Childress presiding.
City of Rusk vs Jan Pate
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Jan Pate developed the Highland Park Subdivision just northwest of Rusk approximately 17-18 years ago through his company Jan Pate, Inc.. This subdivision was located a few yards outside the city limits of Rusk. The city worked in conjunction with Pate after exercising their extraterritorial jurisdiction under Texas law; the city’s officials required their inspectors to approve of certain apsects of the construction. Pate and the City of Rusk agreed that after completion of this subdivision, the city would annex this property, along with the newly installed sewer system lines, provide sewer service and take over the meters for each residence. The City acquired a permit from TxDOT to bore a sewer line under FM 2972 to connect the new subdivision’s lines to the city’s sewer system and take over the meters from Rusk Rural Water Supply.
The City of Rusk failed to follow through with their plans and had no way of billing residents for their sewer service. New personnel at the city believed that the sewer system installed by Pate was not good enough and for around two years after the city connected the lines, they did not bill anyone.
A new city manager wanted someone to pay for the sewer services being provided and went to Pate since he was the developer. One meter for the entire subdivision was installed to record usage. Pate became the middle man between the resident’s and the city and collected a portion of the bill from each resident to pay the account each month. This continued for about 10 years this way, until 2019. That’s when Pate became aware that it was most likely illegal for him to be collecting the money for a utility service when he was not an authorized utility service provider so he asked the city to charge the owner’s individually. The city refused to do this; they threatened to cut off sewer services to the subdivision if Pate did not pay up, even though the city had never billed the residents for the sewer service. After a little over two years of non-payment on the account, the city sued Pate for collection of monies they say were due on this account.
After closing arguments and a brief recess, the judge denied all relief requested by the City of Rusk. Judgement was ruled in favor of the Defendant, Jan Pate with Jan Pate Inc., plus $2,500 in attorney’s fees.
Parties involved have 21 days to seek an appeal on this judgement.