WHITEFIELD — Late Sunday morning, George Fergusson stopped briefly while measuring the water level of Clary Lake to call out to two neighbors who had stopped on Route 218 to look at the lake.

“Isn’t it beautiful?” he said.

Thanks to Friday’s rain, the water in Clary Lake has reached a level where many of the lakefront property owners have wanted it to be for more than a half-dozen years — two feet below the top of the Clary Lake Dam.

That marks a milestone in a longstanding dispute over the water level in the lake and the operation of the dam that impounds it that was mostly resolved when the Clary Lake Association bought it from its bankrupt former owner.

But the complicated disputes surrounding the Clary Lake Dam are not all settled.

For two days last week in Lincoln County Superior Court, Robert Rubin and Cheryl Ayer presented their case for damages related to the low lake level to Justice Daniel Billings at a civil bench trial.

Rubin and Ayer, who are married and are both attorneys — although Rubin is now retired — sued Paul Kelley and Pleasant Pond Mill LLC and Richard Smith and AquaFortis Associates LLC in January 2016, claiming the lowered level of the lake that straddles the Whitefield-Jefferson town line in northern Lincoln County has harmed their property.

Pleasant Pond Mill was the entity that owned the dam; AquaFortis Associates owns property adjacent to the dam including a downstream mill building. Both of those entities as well as Kelley and Smith, were named in a water level order issued by the state Department of Environmental Protection as well as in this lawsuit.

In 2004, Rubin and Ayer paid $225,000 for a chalet-style house with a separate garage on 1.4 acres on the lake. Among the improvements they made was replacing a float with a dock that extends about 15 feet from the shore. But when the lake level dropped after 2011, the waterline receded, leaving the end of their dock dry.

Kelley has said that the dam was breached in Tropical Storm Irene in 2011 and repairing it would pose a hazard to the downstream mill property owned by AquaFortis.

Two appraisals presented at trial of the property owned by Rubin and Ayer, one in 2016 and one earlier this year, put the value of the property at $165,000.

Following initial complaint by Rubin and Ayer, none of the defendants was represented by attorneys and they failed to comply with court orders, resulting in sanctions being imposed including not being able to call witnesses.

Since that lawsuit was filed, Kelley has filed for bankruptcy protection on behalf of himself and Pleasant Pond Mill; both have been dismissed from the lawsuit.

“In 42 years as an attorney, I have never seen a defendant work so hard against producing anything,” Rubin said in his closing comments.

Part of his case in seeking damages from Smith and AquaFortis is based on showing that Kelley and Smith and their limited liability companies are closely connected both personally and in business. At one time, both were members of Pleasant Pond Mill LLC, until AquaFortis was created, documents show, and Rubin provided evidence that Kelley and Smith have a joint bank account.

Dennis Carrillo, attorney for Smith and AquaFortis Associates, in his closing argument said Rubin’s attempt to pierce the corporate veil of the LLCs was all well and good.

“But someone has to be behind the veil to be revealed,” he said, maintaining that his clients had no responsibility for the dam or its operation.

“This is a terrible situation. This is Maine, where were all love our lakes. No one is happy about how this has turned out, but Richard Smith and AquaFortis Associates are not liable for what happened.”

The Clary Lake Dam is seen Dec. 18 in Whitefield. Kennebec Journal photo by Joe Phelan

Billings comes to this lawsuit with some knowledge of all the parties and the situation.

In February, Billings heard arguments in the appeal in Lincoln County Superior Court initially brought by Kelley and Smith and their LLCs of the DEP’s water level order issued in 2014 as a result of a petition brought by property owners on Clary Lake.

A decision and order affirming the water level order was issued later that month and it was not appealed.

Pleasant Pond Mill had been dismissed from the appeal in January 2016; the LLC had been administratively dissolved in 2014 and had lost its standing.

Billings said he would take the matter under advisement.

“There are some complicated legal issues,” he said.

In the meantime, the Clary Lake Association closed on the dam property in October.

The DEP approved the transfer of its water level order to the Clary Lake Association, and the association had hired PCS Construction to make repairs on the dam by spraying concrete on the upstream side of the dam, and digging out the rotten concrete and replacing the structure of the weir.

Fergusson, who is also secretary of the Clary Lake Association Board, said the association will develop a water management plan that satisfies the state’s order.

By spring, the water level is expected to be at the top of the dam, so stop logs will be put in place on the weir to accommodate a higher water level.

The next work to be done on the dam is finding and fixing the leak in the gate.

“It’s not the gate itself. The gate is fine,” he said. “We’ll have to deal with that when the water warms up.”

Jessica Lowell — 621-5632

[email protected]

Twitter: @JLowellKJ

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