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Woodmen's youth campground mired in years of legal disputes

Olin Newby stood surveying a muddy red lake, surrounded by eroding hills dotted with concrete pads.

“That’s where the pavilion would have been,” he said, pointing. “And the girls’ cabins were supposed to be there.”

The 100-acre tract off Russellville Road in Monroe County was envisioned as a camp for children, which could also be used as a winter conference retreat. It was to be called Camp Kaita, in honor of children who were victims of hurricanes Katrina and Rita.

The camp was being built by Central Georgia Woodmen of the World Fraternal Program before money ran out and the project became mired in mud — and accusations. It’s now the subject of three lawsuits, including one brought by Newby and other Woodmen Fraternal members against their own leadership.

“I got involved because I got aggravated about what seemed to be misdeeds in building the camp,” said Woodmen member Morton Lindner of Martinez, who is a petitioner in that lawsuit. “In my opinion, someone needs to be held responsible. What has happened with the youth camp project is just a disaster.”

SEEDS OF CONFLICT

A gravel road winds around the 21-acre, man-made lake at the camp property, crossing a large concrete dam that appears to be cracking a bit.

Silt fences and large rocks that were serving as riprap to deter erosion have washed downhill, and in some places threaten to destabilize the road.

Woodmen Fraternal is made up of people who own life insurance through Woodmen of the World Life Insurance Society, which is governed by its members.

Policyholders are organized by Woodman Life into local lodges, which are grouped into one of three Georgia regions. Newby said the Central Georgia region, which follows the Fall Line from Columbus to Augusta, has about 22,000 adult Woodmen lay members and 2,200 children.

Stephen Dillard, attorney for the current leadership of Central Georgia Woodmen Fraternal, said he could not comment on the case.

In an e-mail, he conveyed a statement from Woodmen Life regarding the membership in Central Georgia Woodmen Fraternal: “Woodmen of the World Life Insurance Society neither confirms nor comments on customer data.”

One perk of being a Woodmen member is access to low-cost summer camp for children between the ages of 8 and 15.

The Central Georgia Woodmen Fraternal region sold its interest in a camp near Gainesville that it shared with the north Georgia region. The roughly $1.3 million proceeds were to be used to build its own camp in Monroe County, Bibb Superior Court records show.

But now the money is gone. Contractors who were building the camp sued Woodmen Fraternal in 2007 for what their lawsuit says is about $675,000 in unpaid work, plus damages. Woodmen Fraternal countersued, accusing the contractors of fraud and shoddy work.

Meanwhile, a derivative lawsuit was filed in April 2008 by some members of Central Georgia Woodmen Fraternal against their own leadership, trying to compel their leaders to seek damages from Woodmen Life and others they claim are responsible for the failure of the camp project.

Two former Central Georgia Woodmen directors, Newby and Ann Rape, brought the derivative lawsuit. Newby and Rape are also former Woodmen Life employees.

Woodmen Life representatives have repeatedly said the company wasn’t even aware of the camp effort until lawsuits were filed.

But a January letter from the petitioner’s attorney, Brian Smith, states, “We have received reliable information that Woodmen (Life) officials in Omaha have directly conspired in much of the misconduct at issue.” The letter later became part of the court record.

About 80 more members, roughly half from Jones County, have signed on as petitioners to the lawsuit, said Jerry Lumley, their attorney. But 10 to 12 more petitioning members withdrew their names later, Lumley said.

Some of them filed affidavits indicating that they didn’t understand what they were signing or were misled.

But Lumley, Newby and Jimmy Crutchfield, a member of the fraternal lodge in Round Oak, say Woodmen Life employees threatened and intimidated people who joined the lawsuit.

Brian Smith, one of the attorneys for Central Georgia Woodmen Fraternal, sent a letter to Woodmen Life’s Omaha attorney Feb. 7, 2008, stating that “Woodmen agents have threatened my clients and told them that they ‘could be in a lot of trouble’ if they attempt to bring their claims.” That letter is an exhibit in the court file.

Crutchfield said that when he asked members to join the lawsuit at a meeting, a Woodman Life sales representative told them they would be sued and lose their homes.

“Some in line to sign turned around and walked off,” Crutchfield said.

TANGLED WEB

At issue is the management of the camp’s construction, including the lake, dam, road and 11 buildings. Court documents show that Woodmen Fraternal spent all the $1.3 million on the 2005 purchase of the land and the subsequent construction.

The lawsuits and minutes of Woodmen Fraternal meetings indicate that the project was supervised by Billy Groce, who as state director for Woodman Life (an employee of the insurance company) was also president of Central Georgia Fraternal.

The fraternal board believed that the $1.3 million would cover the entire cost of building the camp, but it didn’t. In 2006, board minutes indicate that Groce and construction superintendent Bill Bailey told the board that $450,000 would finish the job, so the organization took out a $450,000 loan from Merchants and Citizens Bank of McRae. The Camp Kaita property served as collateral for the loan.

Newby said Groce broadened the project, doubling the intended size of the lake, adding more cabins and adding concrete bridges to the design. Newby said that as a board member, he was not consulted, and he said he is unaware that any others were consulted either.

The contractors, Delta Building Systems and Southern Land Clearing & Excavating LLC, claim in their lawsuit that Groce approved all the work, assured them that they would be paid and then fired them abruptly. Through their Atlanta attorney, Jan Cohen, the contractors denied accusations of poor workmanship. The lack of payment has been “disastrous” to their businesses, Cohen said.

Groce is still employed by Woodmen Life in another region of Georgia, said his attorney, Robert Gunn. Gunn said he had no further comment on the cases while they are pending.

The lawsuit filed by Newby, Rape and others also seeks damages from Groce and Monroe County Properties LLC.

All parties acknowledge in court filings that Monroe County Properties was a wholly owned subsidiary of Woodmen Life, created to purchase Central Georgia Woodmen’s $450,000 debt from the bank in 2007.

Owning that debt makes Monroe County Properties the primary creditor. That means it has first dibs on the profits from a foreclosure sale of the property – effectively wiping out the later liens by the contractors.

Opinions clash on what Woodmen Life intended at this point.

“It is my understanding that Monroe County Properties purchased the note ... to prevent it from going into default,” said Jason Fender, president and chairman of the Central Georgia Woodmen Fraternal board since October 2006. “It is my understanding that all the actions taken by Woodman Life and Monroe County Properties were being done with the hope of ultimately finishing the construction of the camp,” he stated in an affidavit.

In the affidavit, Fender said the loan was due in a lump sum at the end of a year, in March 2006, and Central Georgia didn’t have funds for the payment.

The member lawsuit, however, paints the foreclosure as a land grab.

The lawsuit states that “Woodmen Fraternal’s real property may be stolen from it by Woodmen Life. ... A sale of the property is likely imminent, and Woodmen Life would retain the profits therefrom.”

According to the lawsuits, Monroe County Properties held a foreclosure sale May 1, 2007, at which a representative of the contractors made the high bid of more than $1 million. However, the buyer couldn’t produce the money the same business day, so the sale was voided.

Monroe didn’t hold another foreclosure sale, so the land still belongs to Central Georgia Woodmen Fraternal. Woodmen Life offered a deal to Central Georgia Woodmen Fraternal in April 2008, which the organization accepted. The agreement provides $1.35 million to Central Georgia Fraternal, but then subtracts several values from the total: the value of the camp land, any money Woodmen Fraternal receives as a result of the lawsuit against the contractors, and any money Woodmen Life might be required to pay as a result of the derivative lawsuit.

On the other hand, if the contractors win up to about $674,000, Woodmen Life would cover that plus the $1.35 million.

Lumley says the proposed agreement has so many exceptions that the fraternal organization probably wouldn’t receive any money at all. His clients say the current leadership shouldn’t have accepted the offer.

After The Telegraph asked Woodmen to clarify some of the language in the agreement, Woodmen Life updated the agreement June 18. The updated version states that Woodmen Life “has provided financial assistance to pay for Central Georgia’s attorney’s fees” in both lawsuits, and Woodmen Life will not ask for reimbursement.

The agreement states that the payment “is intended to help guarantee that Central Georgia will be in at least the same (if not a better) position than (it) was before it made the independent decision to build the camp.”

But the updated deal also added a new caveat: The entire agreement will be voided if the derivative lawsuit is not dropped or dismissed by Sept. 30.

IF WE BUILD IT ...

Newby and others still want to see the camp built. Without it, Central Georgia Woodmen has rented camps in different parts of the state for the last several years, he said.

This summer, instead of holding two to four camp sessions, the fraternal organization can offer only one session to 110 children, Newby said. He expects to turn some children away.

Woodmen member Charlotte Wilson said the camp cost is doubling to $50 per child this year.

“Fifty dollars in this economy is rough when you have several children,” she said.

Lumley said his clients “are not in this to make money. They’re in it to try to get a camp for their children, just like they were promised.”

But the petitioners are asking for more money than the total of what Central Georgia Fraternal has lost.

In a January 2008 demand letter before the lawsuit was filed, the petitioners requested $5 million from Woodmen, Groce and Monroe County Properties.

The letter argues that the amount will cover building the camp, paying debts and damages, and attorney’s fees.

Crutchfield and other petitioning members voice outrage at Woodmen Life’s actions in relation to the camp project.

“I’ve been a Woodmen member 71 years — I was a day old when my father took out a policy on me,” Crutchfield said. He attended Woodmen camp as a child.

After years of legal wrangling that has sometimes become very personal, Crutchfield has strong opinions about how Woodmen officials have handled the camp debacle.

“I never would have believed Woodmen would cover something up just because they didn’t want to admit they were wrong,” he said. “I was a national delegate twice, and I’ve never seen anything like this.”

To contact writer S. Heather Duncan, call 744-4225.

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