Monday, March 20, 2017

Rudy sues CMU for $6.3 million.

Madison County Engineer Rudy Warnock sued Canton Municipal Utilities for $6.3 million in U.S. District Court on March 9.  Mr. Warnock claims that CMU breached three contracts it entered into with him in 2016. CMU hired Mr. Warnock as its sole engineer in August but terminated him a few months later. 


The complaint states that CMU and Warnock Engineering entered into several agreements: water & sewer system improvements (November 8, 2016), General Engineering Services (January 4, 2016), and water & sewer system facility improvements (October 7, 2016).  He alleges the cost of the contracts to be $6.3 million.


However, the CMU board underwent some reshuffling and the new powers on the board decided to terminate Mr. Warnock's relationship with the board.  CMU attorney Barbara Blackmon sent two letters to Mr. Warnock last December and January that ordered him to cease all work on behalf of CMU.  The December 29 letter stated:

Pursuant to the action of the Canton Municipal  Utilities (CMU) Commission  terminating its contract of Warnock and Associates, LLC, and at the request  of  the  General  Manager,  Kenneth W. Jones, you are hereby given notice to cease and desist from performing any work whatsoever for or on behalf of  the  Canton Municipal  Utilities  Commission.
However, this is Rudy Warnock, who is not going to lie down just because an attorney says "boo!".  He fired back at CMU through his attorney Dorsey Carson in a January 31 letter. Mr. Carson stated:

Our law firm has been retained by Warnock Engineering, LLC to collect from CMU the entire balance that CMU owes Warnock on an open account, which, as of January 31, 2017, was $6,329,974.87.  Enclosed is the itemized statement of CMU's open account.  

Mr. Carson also asked for interest and attorney's fees for his client. The Blackmons wasted no time in responding to CMU's now-former engineer.   Ed Blackmon shot back at Mr. Warnock with his own letter demanding all documentation for work allegedly performed by Warnock & Associates.  The demand included drawings, diagrams, plans, invoices, and a description of all work performed.   Thus Mr. Warnock answered the demand with his lawsuit.

Remember that copyright infringement that Mr. Warnock used successfully against the Madison County Board of Supervisors to win over half a million dollars? That tactic appears again in this lawsuit:

18. CMU has no license or other right to use Warnock Engineering's copyrights, work product, or other intellectual property unless and until all outstanding amounts are paid by CMU, including but not limited to work provided for engineering designs, drawings, plans, specifications, and other copyrighted work, and for amounts due from the date of termination.
The case is assigned to U.S. District Judge Halil S. Ozerden.  The lawsuit and letters are posted below.

Kingfish note: Sarah Fowler to rip off in 3...2...1....

 Hmmm...... The Warnock on one side,  the Blackmons on the other..... sounds like A Fistful of Dollars.


56 comments:

Anonymous said...

It's too bad they both can't lose.

Anonymous said...

I can't believe I am going to say this but, I am Team Blackmon!

Anonymous said...

Ed Blackmon don't take kindly to that kind of shit Dorsey.

Anonymous said...

No way he did that much work. He will bankrupt CMU and the residents of Canton will have their utility bills go up tremendously.

Anonymous said...

Most contracts don't allow you to unilaterally terminate the contract without cause.. For all we know, the contract states that Warnock is due the entire fee should CMU do so.

Anonymous said...

Note to all political subdivisions: There are all manner of qualified engineering professionals in the tri-county area who know the meaning of "it's a round world." There is NO REASON to enter into a contract with Rudy f@cking Warnock. Ever.

Anonymous said...

11:05 Exactly! None of us know what the contract provides, so none of us can comment. One thing on which one would likely be correct in commenting: You can just about be sure that, if Barbara is Board attorney, she advised that Rudy be terminated.....and not because he didn't perform his work. With her, it's ONLY about race.

Anonymous said...

The simple solution is to annex Gluckstadt, and have them pay Rudy. This would make everyone in the current Canton happy.

Anonymous said...

11:19, you have no clue.

Anonymous said...

I think it is safe to assume that Canton would not agree to a contract that required them to pay the entire balance in order the cancel the contract. That would be really dumb. Even for them.
I also think it is fair to assume that Canton owes him for work done but does not own that work. The new engineer is not going to take the liability of using some else's partly finish work and the engineer who started the work is certainly not going to stand behind it when he was not allowed to complete the work.
But it is perfectly reasonable for Canton to want to see how much work has been done so they can determine how much is owed for the work.

Anonymous said...

I heard that CMU had a more than $10 million surplus and Rudy closed in like a bee to a flower. Guess their cushion for improvements is gonbye-bye. Such a shame that this boy is allowed to call himself an engineer. 11:19 posted a true statement: There are plenty of reputable engineering companies in the tri-county area that will complete your work, that will consider their clients as owners of their work product, and furnish your customers quality service. Think Madison County been screwed out of enough money? Should anybody else get in line?

Anonymous said...

But wasn't Babs the board attorney pre-Warnock too?

Anonymous said...

Rudy does seem to generate a lot of litigation doesn't he?

Anonymous said...

@12:23 you haven't been paying much attention then. The chances of the annexation ever taking place are less than 50%. There are many, many people against it, including officials from Canton.

Anonymous said...

@9:59 TRUTH!!!

Anonymous said...

Choosing between Blackmon and Warnock is like choosing between Purgatory and Hell. With Warnock you go straight to Hell.

CMU was doing pretty well for a guvmint associated entity. Warnock "Engineering" specializes in ripping guvmint agencies off for millions of dollars in inflated and questionable "engineering" work. As soon as he was named CMU engineer (in a coup organized by his friends), Warnock discovered millions of dollars of no-bid "emergency" work that needed to be done ASAP!!

I guess he knew his time would be short, so he ran up $6 million in bills at the blink of an eye. The Blackmons are no more honest than Warnock, but Warnock is probably the only "engineering" firm on the planet that can gut a client's bank account faster than a crooked law firm can!!

Although, the Blackmons are usually on the side of evil, they rescued CMU from a worse fate. They will bleed CMU also, but will do so at a sustainable rate...........

Anonymous said...

Cant be a easy feeling for Bolden with the election less than 2 months away. Last time he got elected to get the Blackmons out, now he is the one bringing the Blackmons back in. I do think he is their best option of the choices running up there though.

Anonymous said...

No kidding! "Kingfish note: Sarah Fowler to rip off in 3...2...1...."
She thinks of you as her "source". How/why is she still there?

Bankroll Fresh said...

Everybody working, everybody getting paid

Anonymous said...

Warnock was hired, signed contracts, did work, and wants to be paid in accordance with his contracts. What is wrong with this? I bet you lawyers on here billing $500/hr get paid too.....

Anonymous said...

What does this have to do with jackassery in Jackson? Is this Madison Jamabalya? When I drive up 55 and into Gluckstadt I see nothing but metal buildings (pre engineered type). And Gluckstadt thinks they are uptown? Please

Anonymous said...

Seriously 7:01!!! He did more than $6M of work in a few months!!! He would need 50 lawyers to bill that much. He wants the contract amount whether he did the work or not. Sure not the way engineering contracts should be written. But Espy may have helped write.

Anonymous said...

I'm puzzled. You can make a contract that doesn't have specifications of the engineering work to be done, how it's to be done,what materials etc. will be used and the cost for each phase of the project to be done? These " plans" with specifications for a single project suddenly become proprietary AFTER the contract is signed? The plans are the first thing you buy, not the last thing. The rest is pay for work done and the engineer should be able to demonstrate work done.
In other words, you buy something you never see? He'll do the engineering but you have no idea what it will be like, only how much it will cost?
If he bid on the project, were there no specifications of what work he was required to do and what standards he had to meet?
There is something wrong with this picture and a competent judge should know that.

Anonymous said...

"...and a competent judge should know that." True statement although it will not get that far. Discovery is a bitch.

John Dough said...

I'm not following the logic, 7:13:

"You can make a contract that doesn't have specifications of the engineering work to be done, how it's to be done, what materials etc. will be used and the cost for each phase of the project to be done? These "plans" with specifications for a single project suddenly become proprietary AFTER the contract is signed?"

Where did you obtain this bit of information? Engineering contracts typically DO include a scope of work. Cost of the engineering work IS included in the contract. Construction specifications and materials are not - those are included in the design specifications that the engineer produces under his engineering contract. The engineer doesn't meet those specs - the construction contractor does.

Also said: "The plans are the first thing you buy, not the last thing. The rest is pay for work done and the engineer should be able to demonstrate work done."

What does this mean? Typically an engineering contract would specify that the engineer will (in the future, under the contract) produce design plans/specs for a project, so that is the END product of a design contract. The "work done" is the resulting plans and specs. An additional engineering contract/scope may be included for engineering oversight, management, approval, etc., of the construction project during construction, but construction is performed by a construction contractor.

"In other words, you buy something you never see? He'll do the engineering but you have no idea what it will be like, only how much it will cost?"

Partly correct. The client will tell the engineer, via his contract, what he is to do. Typically, the engineer will advise the client on the specifics needed to be accomplished. For instance, the client tells the engineer they need help with their water system, but they don't know exactly what it would take, technically, to solve their problem. The engineer's contract says go plan and design water system improvements to solve the specified water problem. The engineer then decides HOW to best solve the problem, does the planning and design, and that product is what he bills for under his contract and what is then used for the construction contract.

"If he bid on the project, were there no specifications of what work he was required to do and what standards he had to meet?"

Under Mississippi law, engineers aren't allowed to compete based on price, i.e., bid on projects. Engineers are hired, usually noncompetitively, as professionals who design projects, which are then usually (by law, if public) put out for bids to be constructed by construction firms. The design bid on does include specifications.

To the extent that "no bid" construction work is done by public entities in MS, that is a pretty thin area of state procurement law, and it often, IMHO, violates the law. But the engineer, while perhaps ill-advisedly giving legal advice on such contracts, is not a party to the construction contract.

Anonymous said...

The Blackmons, Warnock, Carson and Espy spotted having lunch together at Local 463 discussing their planned raping of CMU.

Anonymous said...

Rudy wanted every dime CMU has. He lost the county and wants to make it up on the backs of the poor people in Canton. If the CMU Board entered into some contract with this big of termination clause, I would think they would have some type of personal liability for gross negligence. Did Espy review this contract or advise? No way Warnock did this much work so quickly.

Anonymous said...

do we have any engineering fees from new projects we can compare Rudy's to?

it would be nice to sse the difference in billings

Anonymous said...

From my understanding over half of the fee was to a sewer rehab of the existing system which is a very simple set of plans not requiring a ton of engineering. It is possible that he did all the work of this type in just a few months. If that is indeed the case CMU better get their checkbook out cause they will have to pay for what was authorized. I hear that ALL votes on these contracts were unanimous. Makes you wonder what REALLY happened??

Anonymous said...

The Blackmon's heard that Warnock was working on a $40M sewer project and saw dollar signs and got the 3 black commissioners to fire him & Espy so they could swoop in and make the money. After the dust settled they realized that a Warnock had protected himself by a strong termination clause. Oops. Now what to do?

Anonymous said...

All this makes for an exciting election season up in Canton. Any of the incumbents have any real challengers?

Anonymous said...

Maybe the Blackmons and Warnock will partner so that everyone can make millions and screw the people of Canton.

Kingfish said...

Just like in Mad Men when they combined the companies to get the big contract.

Anonymous said...

Just to clarify, even if Canton annexed some of the Gluckstadt area it would have no affect on this. That is because utility areas are different than city limits. So the people at Panther Creek that are currently on CMU water will be helping pay Rudy's bill, and it doesn't matter if they are in Canton, Gluckstadt, or unincorporated areas of Madison County. And the new Mac Haik dealerships would not help pay Rudy's bill even if they are annexed into Canton because they are on Bear Creek water and sewer and Entergy electric. And that would not change with an annexation.

Anonymous said...

@1:35 although you are correct, it doesn't matter! The annexation IS NOT GOING TO HAPPEN! The Mayor and those voting for it have lost their minds.

Anonymous said...

My bad @1:35, you are correct that the two have nothing to do with one another as well. And yes, many people north, south, east, and west of the canton city limits are on CMU already.

Anonymous said...

If CMU has accumulated millions of dollars as reported earlier, of course lawyers and engineers are looking for ways to legally embezzle it, that is what they do. My only question is why and how did CMU make all of this money? Obviously overcharging customers for utilities.

Anonymous said...

CMU has for years been managed like any prudent utility - charging rates that allowed it to build up reserves so that in case of a disaster situation they could react as necessary and continue to provide services to its many customers. A great example was Katrina - yes, even as far north as Canton there was damage to the utility system. But because of the proper management of the business they were able to rebuild and get back on line quickly.

After years of good management and building up of these reserves, the previous Mayor couldn't help but lust after the cash. Even after his defeat four years ago, he tried to take control of the board in his lame duck last two weeks with the goal beiing to sell off the profit arm (electric service), take the cash, and leave the city residents with a broke water and sewer system. Looks like over the four years the good doctor hasn't been in hiding but has been trying to do a rear guard movement to get his hands on the cash from the outside.

Watching From The Fifth Row.. said...

3:57...you don't specifically say, but I think I see his picture on campaign posters and billboards around Canton now. The man is Truly as disgusting as Rudolph the Red-nosed Engineer.

Anonymous said...

Yes @3:57 is speaking of the devil himself Truly. But. @3:57 don't fool yourself. This is an Arnel Bolden power play all day! Arnel has his frat brother Kenny Wayne Jones are in bed with the Blackmon's on this deal. Truly is running for re-election but will be left out in the cold. The Blackmon's $ is with Arnel Bolden now.

@6:45 yes, Rudy is as bad as we all know he is, BUT I've said it before and I'll say it again. The people that still live in canton and don't want to leave Canton, would much prefer Rudy screwing them, than Arnel Bolden & the Blackmon's. Truly is the bottom of the barrel for sure, but the Blackmon's are just on his shoulders and unfortunately for canton, the Blackmon's have gotten ahold of a good mayor in Bolden.

As was mentioned above, the election in Canton will be interesting, to say the least.

Anonymous said...

I heard that someone on the CMU board of directors was an insurance salesman. I also heard he contracted with CMU for a catastrophic "Tornado policy". I then heard he was self insuring the contract. To those uninformed, this means he hoped a catastrophic event never occurred because he obviously would be personably responsible for the catastrophic damage, which as we all know he could not pay. I don't know if this is accurate, but if anyone knows more about who and what is involved here, please let the rest of us Cantonians know who and what was involved. If this is true, somebody needs to enjoy some time in the Canton clinker.

Anonymous said...

You said it, Arnel, Kenny Wayne Jones & the Blackmon's are working together to steal as much CMU money as possible. Wake up Canton!!!! It's time for a "Clean Sweep" of Arnel and Company.

Anonymous said...

Arnel was in cahoots on the insurance scam!

Anonymous said...

Arnel "smooth mouth" Bolden ran 4 years ago on a promise to remove the Blackmon's. now he is clearly on their payroll. I agree, time for a clean sweep!

Anonymous said...

Don't forget.....a tornado has hit Canton before!

Anonymous said...

8:33 am Thank you. You made my points. That's why there are question marks at the ends of those sentences which you must have noticed since you included them.

I thought my questions were rather obviously dripping with sarcasm.

Now apply all the facts you provided and apply them to defend Rudy's lawsuit.

Would you now like to deal with " copyrighted work" and how one gets paid for work not completed?

I'm waiting with baited breath to know what marvel of engineering that Rudy has" copyrighted" and have you explain how that works in engineering. I would think Rudy would be famous for coming up with such innovated , new engineering feats.

Anonymous said...

All of those negative comments on Mayor Bolden are clearly from his opposition. He is the only honest one in the bunch. Truly cannot go back in!

Anonymous said...

What has Bolden done?? Nothing but waste our tax dollars and give jobs to his buddies. Oh and this CMU scandal caps off his pathetic term. Bolden will be lucky to get 10% of the vote. He and Tony must be related.

Anonymous said...

2:07, Bolden is an honest man swimming in a shark tank. He has fought Warnock and tried to get rid of him. Canton is blessed to have a man like Bolden. He just needs some help from some new Aldermen.

Anonymous said...

Speaking of sharks in the tank, when might we hear from Rudy or his wealthy attorney?

Anonymous said...

Rudy is the "County Engineer" for the adjoining Leake County Board of Supervisors.
Those Good Ole Boys don't realize they are getting screwed just yet. Rudy and former
Prez of MS Association of Supervisors - current Leake Supervisor Joe Helton are thie... i mean "thick as thieves".

Anonymous said...

Hell Rudy is never around! As far as Mayor Bolden, he came in honest but has quickly learned how to use his position as Mayor to enrich his insurance business. Does that sound honest? Sounds like Mayor Bolden has become a shakedown artist. Glad he will be gone soon.

Anonymous said...

Well hello Olivia Harreld. Yes I see you.

Anonymous said...

9:24 has no idea what is really going on in Canton. Rudy is trying to get $6 million for 4 months work at CMU. His eyes go as big as saucers seeing that cash. Bolden will win again. Truly is supported by the Blackmons, but he already had his failure. Greg Green has no respect from the populace. As a Cantonian, I'm voting for Bolden.

Anonymous said...

HAHAHAHHAHHA @8:36, Good Morning Arnel!

Why even try to hide the fact that Arnel & The Blackmons are in this together. Everyone knows that when Arnel allowed The Blackmons to become the CMU attys that he had gone to bed with them! Don't say he couldn't have changed it, because he could have. The alderman had the votes to remove the member of cmu that made the appointment but Arnel refused to meet and allowed them to hire the Blackmons.....

NEWS TO EVERYONE... There is no more Truly & Blackmons, Truly is a lost cause and wont come close to winning. The Blackmons are supporting Arnel Bolden for Mayor. The race is between Arnel Bolden and Greg Green, its that simple.

Anonymous said...

@9:25 Olivia Harrell, not Harreld. But, I agree, word is she is voting against what her ward wants on about everything only because Arnel tells her how to vote. He takes advantage of her trust. She isn't running for re-election.

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