Cape Girardeau developer sues mayor, city

~ Rodney Arnold has filed a lawsuit over statements made to the Southeast Missourian.

Cape Girardeau developer Rodney Arnold has filed a lawsuit in circuit court against the city of Cape Girardeau and Mayor Jay Knudtson, claiming that Knudtson made defamatory statements in a newspaper article about Arnold, implying "deception or incompetency" in Arnold's business dealings regarding his Whispering Oaks subdivision.

The statements were printed in the Oct. 25 Southeast Missourian in an article by reporter TJ Greaney about Arnold's controversial Whispering Oaks, a 140-lot subdivision off of County Road 620, north of Cape Girardeau. The lawsuit was filed Nov. 14 in the 32nd Judicial Circuit. A hearing has been scheduled before Judge William Syler at 9 a.m. March 12.

"It's terribly disappointing," Knudtson said Thursday. "But at this point, I have to decline to comment due to the fact that it's pending litigation."

Arnold could not be reached Thursday. His lawyer, David Damick of St. Louis, said he would not comment on the case's specifics without his client's permission. The petition said Arnold is seeking damages because the statements damaged his reputation and hurt him financially, but did not mention how much in damages is sought. But Damick said that is standard procedure for lawsuit petitions and that an amount would be determined later.

The newspaper article described was about area homeowners at Whispering Oaks who claimed they had been deceived by Arnold, who is now building multifamily homes after they said he gave oral commitments two years ago that he would be building single-family homes on large 1 1/2-to-3-acre plots of land. Arnold was also in the process of having the subdivision annexed into the city of Cape Girardeau, which the council eventually approved and was to take effect today.

Knudtson was quoted at the time as saying he was disappointed at what had happened, "whether it is through deception or miscommunication." He also said: "This many people can't all be wrong," of the Whispering Oaks homeowners who said Arnold had promised to only build single-family homes.

The petition claims that Knudtson was speaking on behalf of the city, which is why it is named in the suit.

The petition also says Knudtson knew his claims were false and were made with "reckless disregard for the truth."

The statements, according to the lawsuit, caused Arnold financial loss, claiming that at least one person has since rescinded his offer to purchase property from Arnold based on Knudtson's statements. The petition does not name that person.

The comments also caused Arnold personal stress, the lawsuit said.

City manager Doug Leslie said he could not say much about the case either. But he wanted the public to know that the lawsuit isn't about the annexation of Whispering Oaks, which has proceeded. A request to rezone portions of the property has been withdrawn, Leslie said.

There are 58 homes at Whispering Oaks and another 15 under construction. But Leslie said he is always concerned when the city is sued, which is a rare occurrence.

Former mayor Al Spradling III confirmed he will likely represent the city and Knudtson in the case. But he didn't want to comment on the case until that was a certainty. Spradling is being appointed to the case by the Missouri Public Entity Risk Management Fund, or MOPERM. MOPERM was created by Missouri law for state public entities in 1986 in response to a liability insurance crisis that left many entities unable to afford adequate insurance protection. When such entities -- fire protection districts, school districts and municipalities -- are sued, MOPERM finds local lawyers to represent their client's financial interest.

smoyers@semissourian.com

335-6611, extension 137