WAILUKU - Tom Krukow, one of the small band of unhappy buyers of Hidden Valley Lake in Tennessee, says Chicago banker and part-time Maui resident Clyde Engle could have ended their lawsuit against him years ago for a few hundred thousand dollars upfront and a promise to pay the rest of a $2.5 million judgment later.
Instead, a Maui jury delivered a nearly $54 million verdict against Engle on Wednesday.
Engle claims to be insolvent. Collecting on the judgment may be difficult, but Krukow said afterward, "Whether we get anything out of that or not, the satisfaction is incredible."
Engle's failure at Hidden Valley Lake ruined retirement plans for Krukow and his wife, Judy, he said.
Instead of a comfortable house on the lake, surrounded by their children, they live in a trailer in Arizona, and Judy Krukow makes sandwiches for a Chevron station to buy gas so Tom can make weekly trips to Utah to visit their 45-year-old son, who is severely disabled by diabetes.
Although the judgment came in a Maui court, all the plaintiffs were originally Tennesseans. Under Tennessee law, the Hidden Valley Lake lots could be offered only to in-state buyers.
Tom Krukow, an expert in satellite maps who worked on the Saturn V program in California, later moved to Tennessee to manage real estate, including 4 million square feet of malls. The pay wasn't that good, he said, but the medical benefits were great, and he had a range of cardiovascular problems. He and Judy were thinking of retirement when he noticed a billboard in Dickson County, Tenn., one county away from where they lived. It advertised a lakeside retirement community.
They drove to Missouri to look over a similar lakeside resort by the same company and thought the operator-developer was doing a great job.
Hidden Valley was to have 2,200 lots, five artificial lakes, with the best lots on the water, and lots for recreational vehicles and then campgrounds on the outer perimeter.
The Krukows bought five of the best, intending to sell off two to pay down the other three, keep one on either side as a buffer and build a big house for their family.
It would have worked, too, Krukow said, because he got in early, in the mid-1980s, and toward the end lots were selling for $25,000. Later, after the lake drained away, lots went for $800 to $1,000. That was in the mid-1990s.
By that time Chicago banker Clyde Engle, who controlled a large number of varied businesses, had acquired Hidden Valley through one of his companies, National Development, which was controlled by another of his company, Sunstates.
Dickson County is karst country, broken limestone. Krukow said the 100-acre lake needed to be lined. The liner failed, twice, and the project with it.
"They started calling it Hidden Valley, not Hidden Valley Lake," he said.
Krukow said he ended up in a powerful position, because the original developer had written association rules for the homeowners association that said that once 51 percent of the lots had been sold, the trusteeship would transfer from the developer to the owners.
At a lightly attended meeting, the developer proposed to even out the common area fees, with each owner, rather than each lot, paying one share.
While that would have benefited him, as owner of five lots, Krukow said it would have saved the developer, with a thousand lots, a lot more, but it wouldn't have paid for the utilities and roads.
He told the developer's vice president to take a hike and ended up as president of the new trustees.
Later, after the crash, a small group of principal plaintiffs went after Engle. (The lawsuit is captioned Boles v. Engle, because a woman named Gladys Boles was the biggest owner among the 25 plaintiffs.)
Over the next 16 years, some of the main plaintiffs sold out or dropped out, but the Krukows kept the faith.
They had a hard time finding a lawyer, since there was only one in Dickson County who hadn't worked for the developer.
That one, a former district attorney, Thomas Bates III, got the ball rolling by establishing the owners as a class of 3,876 members and won a $2.5 million verdict. (There are nearly twice as many owners as lots because most lots were bought by couples.)
As trustee for the lead plaintiffs, Krukow said he was able to offer Engle a deal: Pay the portion of the judgment to the lead plaintiffs and defer payment of the principal to the rest of the class (who had not put up any money for the lawsuit) until later. Engle declined.
He told the Maui jurors that his lawyers advised him that the judgment was not valid. A Tennessee appeals court said he was wrong about that, and by that time the judgment had risen to about $4 million.
But Engle did not pay.
Meanwhile, Engle's businesses had started to fail. The bank he headed, which he and his wife, Siobhan, owned, and which had once paid him more than a million dollars a year, was seized by regulators last year.
At the time of the original verdict, Krukow would have been content to get his $50,000 back. Since then, though, he and his wife have pursued the case for victory, whether they get any money back or not.
George Grumley, their Chicago advocate, found Chicago investors who were willing to finance the effort "in the high six figures."
These backers now stand to get their money back and then some, if the Engles still have assets and if they can be recovered.
"He's a brilliant guy," said Krukow, who said he bears no malice toward Engle but feels some pity for him for his business failures.
The Krukows came to Maui to be presented to the jurors as typical examples of Engle's victims, and they spent weeks here last year, before that trial ended in a hung jury.
This time, they expected to be here a couple of weeks. Judy Krukow took off from her job, which means they have no income now. Tom is retired.
While happy to have won their case, Wednesday she was worried about her sandwich-making colleague at the Chevron back in Apache Wells. She said her colleague called to say she didn't know how much longer she could manage on her own.
So, despite being the heiress-apparent to a share of $54 million, on Wednesday Judy Krukow was planning to leave Maui and start making sandwiches again.
* Harry Eagar can be reached at heagar@mauinews.com.
