Nine years ago Maricopa was a town in which the cattle outnumbered people by a ratio of more than 10 to 1. All of that would begin to change when developers arrived and began to formulate a plan for the town’s future in order to help create a community where people could find affordable housing outside the big-city environment. While the developers had the vision for the community, they needed a partner to bring the cable, Internet and phone services. Enter Orbitel Communications. The cable provider entered into a 30-year agreement with the first master-planned community, Rancho El Dorado, in which the company agreed to provide cable service to every lot in exchange for a monthly assessment of $12 per lot, which would be included in the monthly HOA dues and passed along to the cable company. However, tensions concerning the collection and remittance of these fees have spawned a community lawsuit between the homeowner’s association and Orbitel, with the HOA seeking more than $1 million in damages and dissolution of their 30-year cable contract. “We shouldn’t be in the cable business,” said Rancho El Dorado’s HOA lawyer Charles Maxwell in a July interview with InMaricopa.com. The claim, which was filed against the cable company on Aug. 28, states the contract for Orbitel “was made in bad faith, obtained through fraud and executed in knowing violation of the community’s bylaws.” The claim states that in the fall of 2000, Rancho El Dorado’s original developers, Pecan Valley Investments and CHI Construction, were doing business as Phoenix Capital Partners (PCP). The claim states PCP developed the infrastructure plan for the community, which included contracting cable service for the area. However, the claim alleges PCP had a 20 percent ownership stake in Orbitel, and one of the company’s duties was to acquire “business opportunities” with the Rancho El Dorado HOA in exchange for profit sharing. In January 2001, Michael Reinbold was named president of the HOA board, concurrently holding that role in addition to positions at Pecan Valley and PCP. On May 24, 2002, Reinbold and Orbitel signed the cable contract between the community and the cable provider, granting Orbitel exclusive rights to provide basic cable service to homeowners in Rancho El Dorado for a term of 30 years. Section 5.5 of the HOA’s bylaws states: Unless otherwise provided by the board, all contracts shall be executed on behalf of the association either by the president or vice president and countersigned by the secretary or managing agent after said contract was approved by the board. To counter this policy, the suit alleges Orbitel inserted language that would not require a second signature. The HOA’s Maxwell said in the claim that Orbitel knew of the conflicts of interest, yet ignored them and attempted to circumvent the bylaws by inserting the authorization clause in order to facilitate the intended long-term financial benefits of the agreement. The same day Orbitel and the HOA signed their contract, the cable provider and developers executed a compensation agreement that would pay PCP three percent of its profits for 30 years, according to the claim. Reinbold signed the agreement for PCP as the company’s president. In June 2004, the compensation contract was terminated between the two entities because of a payment dispute concerning assessment dues to Orbitel, with CHI and Pecan Valley each paying Orbitel $100,000. On June 15, the developer-controlled HOA board “ratified” the original agreement for cable service with Orbitel. In 2005, when the board became owner-controlled, the HOA requested Orbitel terminate the agreement because of the conflict of interest. However, Orbitel declined to do so. Then, at the end of 2008, after reviewing its year-end financials, the association discovered it had overpaid Orbitel $28,525 for fees it had not collected from homeowners. “The association has fulfilled its obligation to bill owners, but the increasing number of delinquent owners and foreclosures has resulted in a drastic decrease in the actual amount of funds collected,” Maxwell said in a letter to Kirkman. In his letter, Maxwell added the HOA would reduce future payments to offset this amount to the company beginning with the first quarter 2009 payment, and from then on only submit payment to Orbitel for money collected from its current lot owners. Orbitel's lawyer countered in a letter that the company felt the agreement called for the HOA to pay for all lots, regardless if they were current on assessments. The cable company would go on to disconnect cable service to 333 of 733 delinquent lot owners to help in the collection of delinquent accounts. Keith Kirkman, Orbitel’s chief executive officer, declined to comment on the pending litigation, but talked about the Rancho El Dorado dispute during a July interview with InMaricopa.com. “Many of these associations want to look at Maricopa and where it is today, but you really need to look back seven years to understand the risk this company took,” Kirkman said at the time. The contracts the cable company signed with nine master-planned communities in Maricopa required cable service to be in place before the first home was built. “It is not like we said get 100 homes built first, then we will offer service,” Kirkman said in the interview. “The people moving into these communities had all the services they would expect from a full-service cable company on day one.” He added that if the founder of Orbitel had not put money into Maricopa, the city might not have grown at the rate it did. “Who would have moved to Maricopa if there was no Internet, phone and cable service available?” To further illustrate the risk the cable company took when deciding to go into Maricopa, it is not necessary to look further than the Valley, according to Kirkman. “Cox has a customer base of 650,000; they did not think Maricopa was a wise investment, and Qwest (terminated) their license to provide cable services in the city.” “Our investment could have gone south,” Kirkman said. “Instead, Orbitel is in the community, providing quality service, quality employment and excellent customer service.” A court date is scheduled for Dec. 17 in the Pinal County Superior Court. 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