Superior Court Judge Colin Campbell heard the lawsuit challenging the town of Diamond Star's right to incorporate Monday morning in Phoenix and will issue a ruling later on its legality.
The lawsuit was filed in November by George Randall; Roy Haught; Terra Star Valley 40, one of G. Michael Horton's development companies; and several others. Randall and Haught own the well in Star Valley that will feed Horton's pipeline to Payson, and that will provide the excess water the town of Payson has agreed to purchase for $750,000.
Chris Benjamin, a member of the Diamond Star Water Coalition, attended the hearing.
"Basically there was one attorney for the Randall-Haught group (Steven Hirsch), one attorney for our town (David Ouimette of Mariscal, Weeks, McIntyre & Friedlander), and then there was one attorney (Brian Chambers) and the county manager (Steve Besich) for the county, and they all got up and did their oral arguments," he said. "(The judge) wouldn't say anything definitive, but it just looked like he was getting the message."
Diamond Star Town Attorney Fredda Bisman said she talked to Ouimette after the hearing.
"We really don't like to comment on litigation when it's ongoing," she said. "I did speak to Dave and he said it went well, but beyond that we'll wait and see what the judge says."
Diane McDaniel, acting Diamond Star town clerk and wife of Mayor Ronnie O. McDaniel, also attended the hearing. She said it was difficult to tell how the judge was leaning or when he might reach a decision.
"Who knows," she said. "I mean, the questions that the judge asked were questions we would have wanted him to ask.
"Hopefully we'll get a real quick response, and hopefully it will be in our favor. When he was done, he closed his books, said he'll take it under advisement, and walked out."
Nobody from the town of Payson attended the hearing.
While Randall, Haught and Horton all declined to discuss the lawsuit, Diamond Star Councilor Art Lloyd, an attorney, said he expects a fast dismissal.
"We don't think these people and entities have any legal standing whatsoever," he said. "The only entity that can challenge it from our research is the town of Payson; the town of Payson is the only entity that could be affected by the incorporation.
"You had a situation where two-thirds of the residents signed a petition, their signatures were ratified and validated, and then you had the board of supervisors, upon advice of their legal counsel, being told that everything that was done was legal and proper, and then they unanimously approved it. The town is moving forward."
Lloyd speculated that the lawsuit might have been filed to counter an attempt by Diamond Star to stop the use of water from their community to build new subdivisions in Payson.
"I think they're very concerned because the town of Star Valley is ready to take some action," he said.
The complete list of those who filed the lawsuit includes Randall and his wife, Victoria; Haught and his wife, Marie; Raymond and Patricia Cline; Charles and Susan Hall; Larry and Antoinette Gay; James and Dana Armstrong; Terra Star Valley 40; Gray Horse Homes; and R and H Boulder and Granite.
In other Diamond Star news, Councilor Chuck Heron explained why the town could hire LFR Levine Fricke, an environmental management and consulting engineering company, to begin monitoring private wells in Diamond Star without going out to bid. Horton had asked that and a series of other questions in a letter to Mayor McDaniel dated Jan. 19.
"Arizona Revised Statutes allow a town to contract services of an engineering firm and so forth without going to bid," Heron said. "It's the same rule that allows Aero Drilling to drill all of Payson's wells without going to bid."
Heron said his water task force will select an assortment of heavy-use, multi-use wells and private, domestic-use wells for LFR to monitor "so we get a good feel for what we're doing."
"We're coordinating our effort with Gila County," he added. "They're going to be doing some monitoring -- primarily monitoring for any contaminants from the old dump.
"If the town of Payson does what they said they were going to do -- come out and do a safe yield study -- we really have three different studies. It will be interesting to compare the results."