A group wanting to build a town center at the town of Walden has sued Vice Mayor Lizzy Schmidt, saying she had a conflict of interest on the issue and failed to disclose it.
LOP, LLC filed the complaint in Circuit Court.
The group said it owns a 23-acre tract at Walden and wants to build a town center anchored by a grocery store.
It says the Walden Planning Commission recommended approval of a town center with no cap on the size of the buildings.
LOP says it drew up plans for a town center with a grocery limited to 30,000 square feet. It says, compared to prior plans, that was a drastic reduction in size for the grocery.
It says Vice Mayor Schmidt introduced an ordinance to limit the grocery size to 15,000 square feet, and it passed, 2-1, with the other board member in favor and Mayor Lee Davis opposed.
Mayor Davis sent the matter back to the Walden Planning Commission, which recommended that just two buildings in the center be up to 30,000 square feet. That was rejected by the Walden Council, 2-1, with Vice Mayor Schmidt casting one of the no votes. The 15,000 square foot limit was approved.
The suit says the ordinance "destroyed any possibility" of building the center as proposed.
The complaint says in 1947 that Winborn Willingham, grandfather of Vice Mayor Schmidt among others, formed the Lookout Mountain Investment Corporation, which still exists. It says the registered agent for LMIC is Anne Rollison Young, who is the sister of Vice Mayor Schmidt and a Walden town employee.
It says LMIC earlier purchased over a mile of bluff property at Walden and has developed it as Forest Park.
LMIC also bought property on Taft Highway and developed Signal Plaza Shopping Center. It included a grocery that was first operated by M&J and later by Pruett's.
The suit says LMIC "has had a lucrative monopoly" since the grocery was built in 1974.
It says the 15 grandchildren of Winborn Willingham now own LMIC.
The complaint says Vice Mayor Schmidt has a financial interest in the LMIC lease where Pruett's is located. It says some of the funds from the lease go to finance a family "party house" at Tavares, Fla.
The suit says Vice Mayor Schmidt, who is an attorney, 'violated the town's code of ethics by not disclosing information about LMIC. It also says she violated ethical standards as an attorney.
It claims she is guilty of "fraud and fradulent activity" for allegedly failing to disclose a financial interest in the Pruett's lease.
The suit, filed by attorney Josh Crowfoot, asks $1.2 million compensatory damages, $3.6 million for compensatory damages in connection with interference with a business relationship, and $7.2 million in punitive damages.