19 18453 Rawa v. Setley Et Al

_________________________________________
READING AREA WATER AUTHORITY : IN THE COURT OF COMMON PLEAS

1801 Kutztown Road : BERKS COUNTY, PENNSYLVANIA
Reading, PA 19604 :
: DOCKET NO.
v. :
:
MICHAEL SETLEY, ESQUIRE, et al. :
Received County of Berks Prothonotary’s Office on 10/23/2019 11:47 AM Prothonotary Docket No. 19-18453
__________________________________________:
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Berks County Bar Association Servicio de Recomendación para Contratar Abogados
544 Court Street del Colegio de Abogados del Condado Berks
Reading, Pennsylvania 19601 544 Court Street
Telephone (610)375-4591 Reading, Pennsylvania 19601
Teléfono (610) 375-4591
www.BerksBar.org
www.BerksBar.org
Douglas F. Schleicher (Pa. I.D. No. 44078)
Glenn A. Weiner (Pa. I.D. No. 73530)
William J. Clements (Pa. I.D. No. 86348)
KLEHR HARRRISON HARVEY BRANZBURG LLP
1835 Market Street, 14th Floor
Philadelphia, PA 19103
ph (215) 569-2700
fax (215) 568-6603
dschleicher@klehr.com
gweiner@klehr.com Attorneys for Plaintiff,
wclements@klehr.com Reading Area Water Authority

________________________________________
: IN THE COURT OF COMMON
READING AREA WATER AUTHORITY : PLEAS OF BERKS COUNTY,
1801 Kutztown Road : PENNSYLVANIA
Reading, PA 19604, :
:
Plaintiff, :
:
v. : Docket No.
:
MICHAEL SETLEY, ESQUIRE :
4 Park Plaza, 2nd Floor :
Wyomissing, PA 19604, :
:
GEORGEADIS SETLEY RAUCH & :
PLANK, LLC, d/b/a GEORGEADIS :
SETLEY :
nd
4 Park Plaza, 2 Floor :
:
CONCORD PUBLIC FINANCIAL :
ADVISORS, INC., d/b/a CONCORD :
PUBLIC FINANCE :
2902 Windmill Road, Suite 6 :
:
DEAN MILLER :
320 South 17th Street :
:
MILLER ENVIRONMENTAL, INC. :
:
PHIL1 8313784v.1
TOM WELD :
920 Germantown Pike, Suite 200 :
Plymouth Meeting, PA 19462, :
:
-and- :
:
ATC GROUP SERVICES, LLC, d/b/a :
BCM ENGINEERS :
:
Defendants. : JURY TRIAL DEMANDED
_________________________________________ :
COMPLAINT
Reading Area Water Authority (“RAWA”) brings this complaint against: (i) RAWA’s
former solicitor, Michael Setley, Esquire (“Mr. Setley”); (ii) Mr. Setley’s law firm, Georgeadis
Setley Rauch & Plank, LLC, d/b/a Georgeadis Setley (“Georgeadis Setley”); (iii) Mr. Setley’s
financial advisory firm, Concord Public Financial Advisors, Inc., d/b/a Concord Public Finance
(“Concord”); (iv) RAWA’s former executive director, Dean Miller (“Mr. Miller”); (v) Mr. Miller’s
company, Miller Environmental, Inc. (“Miller Environmental”); (vi) RAWA’s former engineer,
Tom Weld (“Mr. Weld”); and (vii) Mr. Weld’s employer, ATC Group Services, LLC d/b/a BCM
Engineers (“BCM”).
Introduction
1. This is an action by RAWA, a municipal water authority, against its former
attorneys, financial advisors, executive director and engineers arising out of their breaches of
fiduciary duty, negligence and other wrongful conduct that resulted in RAWA engaging in
unnecessary but costly transactions, incurring excessive charges and fees for services rendered
and, ultimately, being burdened with excessive debt.
2. In particular, RAWA’s former solicitor, Mr. Setley, and former executive director,
PHIL1 8313784v.1
Mr. Miller, put their own interests ahead of those of RAWA, and enriched themselves and their
businesses at RAWA’s expense.
3. RAWA’s engineers worked with Mr. Setley and Mr. Miller to advance this scheme.
4. Ultimately, the victims of this scheme are both RAWA and the public, namely, the
citizen ratepayers residing in Reading, PA and the surrounding area serviced by RAWA.
5. RAWA brings this action to vindicate both its rights and the rights of the ratepaying
public serviced by RAWA, as set forth in, among other places, the Municipal Authorities Act, 53
Pa. C.S. §§ 5601 et seq. (the “Act”), including the public rights—and RAWA’s concomitant
obligations to advance and safeguard those public rights—respecting matters specifically at issue
in this lawsuit pertaining to financing, constructing, improving, maintaining and operating water
facilities. See, e.g., 53 Pa. C.S. § 5607 “Purposes and powers”; § 5608 “Bonds”; § 5609
“Bondholders”; § 5611 “Investment of authority funds”; § 5612 “Money of authority”; § 5614
“Competition in award of contracts”; § 5617 “Use of projects”; and § 5620 “Exemption from
taxation and payments in lieu of taxes.”
The Plaintiff
6. RAWA was established on May 20, 1994, and is a body corporate and politic
organized under the Act.
7. RAWA was incorporated pursuant to the appropriate action of the governing body
of the City of Reading, Berks County, Pennsylvania (the “City”), and exists under and is governed
by the Act.
8. RAWA has the power to, among other things, acquire, hold, construct, improve,
maintain and operate water filtration plants, trunk lines and water distribution systems.
PHIL1 8313784v.1
9. RAWA is governed by a board consisting of up to seven persons appointed by the
City (the “Board”).
10. At all times relevant to the transactions and occurrences set forth in this complaint,
RAWA was actually controlled by its executive director, Mr. Miller and his company, Miller
Environmental, acting in concert with RAWA’s former solicitor, Mr. Setley, and Mr. Setley’s law
firm, Georgeadis Setley.
11. RAWA’s principal office is located at 1801 Kutztown Road, Reading, PA 19604.
The Solicitor And Bond Counsel Defendants
12. Defendant Mr. Setley is a citizen of the Commonwealth of Pennsylvania, and is an
attorney licensed to practice law in this Commonwealth.
13. Defendant Georgeadis Setley is a limited liability company organized under the
laws of the Commonwealth of Pennsylvania.
14. Mr. Setley is a partner in Georgeadis Setley.
15. While currently known as Georgeadis Setley, Mr. Setley’s law firm previously
operated under the names “Georgeadis Setley Bucolo Rauch & Plank, LLC” and “Setley, Rauch
and Bucolo, LLC.”
16. From the mid-1990s through 2016, Mr. Setley acted as the solicitor for RAWA. In
addition, Mr. Setley and his law firm also acted as bond counsel for RAWA in connection with
the 2011 and 2015 Bond Issuances by RAWA.
17. Mr. Setley’s and Georgeadis Setley’s principal place of business is located at 4 Park
Plaza, 2nd Floor, Wyomissing, PA 19604.
The Financial Advisor Defendant
18. Mr. Setley is also an owner and/or principal of defendant Concord.
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19. Concord is a business corporation organized under the laws of the Commonwealth
of Pennsylvania.
20. Concord is a financial advisor, also known as a municipal advisor, registered with
the United States Securities and Exchange Commission (the “SEC”) and the Municipal Securities
Rulemaking Board (the “MSRB”).

21. As a municipal advisor, Concord is obligated to work as a fiduciary for its clients,
such as RAWA.
22. Concord further markets itself as providing complete financial solutions for its
municipal clients, and performs services such as: (i) analyzing its client’s needs; (ii) analyzing the
annual and present value costs of financing in various markets; (iii) analyzing the cost/benefit of
competitive or negotiated methods of completing a transaction; (iv) recommending a plan of
finance to meet its client’s objectives; (v) preparing necessary information for bond rating agencies
and municipal bond insurers; (vi) assisting in the selection of a financing team; (vii) assisting with
obtaining investments; and (viii) attending closings for transactions to ensure that everything is
completed in accordance with its client’s expectations and needs.
Mr. Setley’s company, Concord, acted as RAWA’s financial advisor.
24. Concord’s principal place of business is located at 2902 Windmill Road, Suite 6,
Reading, PA 19608.
The Executive Director Defendants
25. Mr. Miller is a citizen of the Commonwealth of Pennsylvania and was the former
executive director of RAWA.
26. Mr. Miller is the owner and/or principal of Miller Environmental.
PHIL1 8313784v.1
27. Miller Environmental is a business corporation organized under the laws of the
Commonwealth of Pennsylvania.
28. Mr. Miller and his company, Miller Environmental, provided management,
executive director and other services to RAWA for many years, until 2016.
Mr. Miller and his company, Miller Environmental, along with Mr. Setley and his law firm,
Georgeadis Setley, controlled RAWA.
30. Mr. Miller’s and Miller Environmental’s principal place of business is located at
320 South 17th Street, Reading, PA 19602.
The Engineer Defendants
31. Mr. Weld is a citizen of the Commonwealth of Pennsylvania.
32. BCM is a foreign limited liability company registered to do business in the
Commonwealth of Pennsylvania.
33. BCM has a registered address of 1515 East 10th Street, Sioux Falls, SD 57103.
34. At all relevant times, Mr. Weld was an engineer and an employee of BCM.
35. At all relevant times, Mr. Weld and BCM acted as RAWA’s engineers.
36. Mr. Weld and BCM have a principal place of business in this Commonwealth
located at 920 Germantown Pike, Suite 200, Plymouth Meeting, PA 19462.
Jurisdiction And Venue
37. Jurisdiction and venue are proper in this Court because the parties are domiciled in
this county; may be served with process in this county; the harm complained of herein was suffered
by plaintiff in this county; and/or the causes of action and the transactions or occurrences out of
which the causes of action arose took place in this county.
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38. Personal jurisdiction over the out-of-state defendant exists because: (i) it has
sufficient and substantial minimum contacts with the Commonwealth of Pennsylvania; (ii) it
undertook to provide services to a Pennsylvania governmental entity located in this county; and
(iii) personal jurisdiction over it otherwise exists pursuant to Pennsylvania’s “Long Arm Statute”
at 42 Pa. C.S. § 5322(a)(1), (2), (3) and/or (4), any of which statutory sections alone are sufficient
to impose personal jurisdiction over the out-of-state defendant in this Court.
The Relationship Between RAWA, Mr. Setley, Mr. Miller And Miller Environmental
39. Mr. Setley had a long history with RAWA, dating back to work he did in connection
with the formation of RAWA in the mid-1990s.
40. Mr. Setley ultimately became the solicitor for RAWA in the mid-1990s, and served
in that capacity until he resigned in 2016.
41. During that time, Mr. Setley came to dominate RAWA’s operations, resulting in a
lucrative relationship for him and his law firm with RAWA.
42. For many years, Mr. Setley worked with Mr. Miller and Miller Environmental to
maintain and grow their control over RAWA, for their mutual benefit, and for the additional benefit
of their respective business entities. This created conflicts of interest.
43. Making matters worse, Mr. Setley’s and Mr. Miller’s inappropriate course of
conduct continued even after they received a final adjudication from the State Ethics Commission
which found that: (i) Mr. Miller was subject to conflicts of interest arising out of his outside
business dealings and his position at RAWA; and (ii) to safeguard RAWA from these conflicts,
RAWA’s solicitor—Mr. Setley—should scrutinize and review any Miller Environmental invoices
sent to RAWA. Yet, Mr. Setley exercised little oversight over Miller Environmental’s invoices
and, in turn, Mr. Miller similarly exercised little oversight over billings from Mr. Setley or his law
PHIL1 8313784v.1
firm. Rather than protecting RAWA through the framework ordered by the States Ethics
Commission, Mr. Miller and Mr. Setley continued to operate RAWA to benefit themselves and
failed to carry out their mandated oversight duties.
44. Mr. Setley and Mr. Miller, not RAWA’s Board, actually controlled RAWA.
45. For example, before public meetings of RAWA’s Board, Mr. Setley and Mr. Miller
would hold private pre-meeting conferences with the chairman of the Board, at which Mr. Setley
and Mr. Miller would decide what information would be disclosed to the Board in connection with
any decision that needed to be made, so as to ensure that a decision favorable to them—but not
necessarily to RAWA and its citizen constituents—would be made.
46. No minutes or other records were kept of these private pre-meeting conferences
(which Mr. Setley and Mr. Miller referred to as “executive sessions”).
RAWA’s Bond Issuances
47. Chiefly at issue in this lawsuit are defendants’ respective actions and omissions in
connection with three multi-million dollar tax exempt bond issuances by RAWA for the ostensible
purpose of funding, and re-funding, capital improvements (collectively, the “Bond Issuances”).
48. In 2007, RAWA issued Guaranteed Water Revenue Bonds—Series of 2007 in the
face amount of $25 million (the “2007 Bond Issuance”).
49. Mr. Setley acted as solicitor and bond counsel for RAWA in connection with the
2007 Bond Issuance.
50. In addition, Mr. Setley’s company, Concord, acted as RAWA’s financial advisor in
connection with the 2007 Bond Issuance.
51. Concord was hired as financial advisor without RAWA soliciting bids, despite the
conflicts of interest arising from Mr. Setley’s ownership of Concord.
PHIL1 8313784v.1
face amount of $50 million (the “2011 Bond Issuance”).
53. Mr. Setley and his law firm, Georgeadis Setley, acted as solicitors for RAWA in
54. Mr. Setley’s law firm, Georgeadis Setley, also acted as bond counsel for RAWA in
56. Neither the bond counsel nor the financial advisor work were subject to a bidding
process, despite the conflicts of interest inherent in those relationships because of Mr. Setley’s
ownership interest in both entities.
face amount of $25.13 million (the “2015 Bond Issuance”).
58. The ostensible purpose of the 2015 Bond Issuance was to refinance the bonds issued
in connection with the 2007 Bond Issuance.
59. Mr. Setley and his law firm, Georgeadis Setley, acted as solicitors for RAWA in
60. Mr. Setley’s law firm, Georgeadis Setley, also acted as bond counsel for RAWA in
connection with the 2015 Bond Issuance. Upon information and belief, as with the previous Bond
Issuances, the work of Mr. Setley, his law firm and Concord was not subject to a bidding process.
PHIL1 8313784v.1
62. At the time of the Bond Issuances, Mr. Miller and Miller Environmental, along with
Mr. Setley, controlled RAWA.
63. At the time of the Bond Issuances, Mr. Weld of BCM was RAWA’s engineer, and
worked together with Mr. Miller and Mr. Setley to preserve their control over RAWA.
Mr. Setley’s Other Wrongful Conduct, Including Conflicts Of Interest

64. Toward the end of his tenure as solicitor, in connection with a forensic investigation
relating to RAWA’s operations commissioned by RAWA, Mr. Setley was asked about the terms
of his engagements as RAWA’s solicitor and bond counsel, the methodology of his billing, back-
up materials to support his billing and whether he fully disclosed to RAWA, and obtained informed
consent from RAWA for, the conflicts inherent in the various roles he, his law firm and his
financial advisory firm played in connection with the Bond Issuances.
65. Despite request from the auditors and investigators, Mr. Setley did not produce
written engagement letters with RAWA in connection with the legal services he and his law firm
performed for RAWA.
66. Despite request from the auditors and investigators, Mr. Setley did not adequately
explain the methodology of the billing for legal work performed for RAWA.
67. Despite request from the auditors and investigators, Mr. Setley was unable or
unwilling to produce back-up materials to support his billings to RAWA.
68. Despite request from the auditors and investigators, Mr. Setley did not produce any
written disclosures to RAWA that explained or addressed any actual or potential conflicts of
interest he, his law firm or his financial advisory business had in connection with the multiple roles
they played in the Bond Issuances. Moreover, Mr. Setley provided no evidence of RAWA having
granted informed consent to such conflicts. Records of the Board demonstrate no such consent.
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69. It is believed, and therefore averred, that Mr. Setley, his law firm and his financial
advisory firm, Concord, charged hundreds of thousands of dollars in excess fees to RAWA.
70. Furthermore, in light of these conflicts, RAWA was not properly advised as to
whether it needed to engage Concord to advise it on the Bond Issuances. While Concord was paid
in connection with the Bond Issuances, it is not apparent what services it actually provided, or if
those services were necessary or valuable to RAWA.
71. In addition, without proper disclosure to RAWA and informed consent, Mr. Setley
participated on both sides of transactions with RAWA.
Mr. Miller’s Other Wrongful Conduct
72. Mr. Miller used his management role in RAWA to the benefit of himself and his
company, Miller Environmental.
73. For example, Mr. Miller directed that Miller Environmental perform certain work
for RAWA, such as testing and examination of the source water used by RAWA and meter reading
services, without first determining whether those services could be performed more efficiently and
inexpensively by RAWA personnel. It is believed, and therefore averred, that Mr. Miller then
overcharged RAWA for the services provided to RAWA by Miller Environmental.
74. It is also believed, and therefore averred, that Mr. Miller caused RAWA to pay for
unnecessary water service improvement upgrades, failed to bill for RAWA services rendered and
forgave RAWA bills in the case of certain favored individuals and businesses, to advance his
personal interests and the interests of his company, Miller Environmental, at the expense of
RAWA and its citizen constituents.
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75. It is further believed, and therefore averred, that this misconduct on the part of Mr.
Miller has cost RAWA hundreds of thousands of dollars, both in excessive and unnecessary fees
charged by Miller Environmental and in lost revenues.
76. In short, Mr. Setley and Mr. Miller used RAWA as a vehicle to enrich themselves
and their business entities at the expense of RAWA and its citizen constituents, and further
deprived RAWA of the ability to take prompt corrective measures to prevent the ongoing abuses
of Mr. Miller and Mr. Setley.
The Excess Indebtedness Resulting From RAWA’s Bond Issuances
77. It is a required (and logical) process to first identify and estimate the cost of the
necessary capital improvements that an authority proposes to undertake with the proceeds of bonds
before timing and sizing a bond issuance.
78. Mr. Setley and Mr. Miller had a vested interest in maximizing the size of RAWA’s
bond issuances, which would allow them to reap additional and concomitant benefits from their
positions as insiders controlling RAWA.
79. Mr. Setley and Mr. Miller were aware that the sizing of the 2007 and 2011 Bond
Issuances were in excess of the amount of proceeds reasonably necessary to support capital
improvement needs. Although there were not enough necessary capital improvement projects
identified to support bond issuances in those amounts, Mr. Setley and Mr. Miller directed RAWA’s
engineer to identify additional construction projects to support the size of the Bond Issuances.
80. Mr. Weld and BCM, although they knew that there were not enough necessary
capital improvement projects to justify the size of the Bond Issuances, followed Mr. Setley’s and
Mr. Miller’s instructions, and added construction projects to RAWA’s capital improvement plans
and budget so that the size of the Bond Issuances could be justified.
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81. Indeed, the size of the Bond Issuances were inconsistent with RAWA’s annual
capital improvement plans and any reasonable expectations drawn from those plans.
82. RAWA did not undertake all of the projects identified in the increased project list
and did not use all the proceeds of the 2007 and 2011 Bond Issuances promptly after issuing the
bonds. Nor were all of the proceeds used on the projects listed at the time of the Bond Issuances.
83. Consequently, proceeds from the 2007 and 2011 Bond Issuances sat unused in
short-term, low-interest bearing accounts. Nonetheless, of course, RAWA had to pay interest to
the bondholders on the full amount of the Bond Issuances, even though RAWA had not truly
needed to obtain that much financing.
84. In addition, with respect to the 2011 Bond Issuance, Mr. Setley and Mr. Miller
encouraged RAWA to issue the bonds in the latter part of the year, when financing is more
expensive than it would have been in the first part of the following year. Concord, despite being
hired specifically to advise RAWA on financing strategies and to arrange the most favorable terms
for any financing issued by RAWA, failed to advise RAWA that issuing the 2011 bonds when it
did would be more costly than waiting until the following year. As RAWA had no urgent need for
the proceeds of the 2011 Bond Issuance, there was no good reason to rush the financing out when
it was more expensive to do so.
85. Furthermore, by increasing the number of projects that RAWA would undertake in
order to use the additional bond funding, Mr. Setley and Mr. Miller guaranteed additional revenue
streams for them and their firms in that they would be retained to provide services to RAWA with
respect to the additional projects.
86. These facts alone demonstrate that Mr. Setley and Mr. Miller caused RAWA to
overborrow and incur excess indebtedness.
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87. Nor was this a function of mere negligence on the part of Mr. Setley and Mr. Miller.
88. At or about the time of the 2007 and 2011 Bond Issuances, the City was in financial
distress from years of mismanagement.
89. Mr. Setley and Mr. Miller were concerned that the City, in a quest for additional
revenues or assets, would try to absorb RAWA and directly provide and bill for water and related
services (the City already earned revenues by directly providing and billing for sewerage services).
90. Mr. Setley and Mr. Miller also were concerned that private utility companies would
attempt to purchase the water facilities controlled by RAWA.
91. To preserve their lucrative positions with RAWA, Mr. Setley and Mr. Miller caused
RAWA to engage in the Bond Issuances because the resulting debt would make RAWA a much
less attractive takeover target for either the City or a private utility company.
92. In short, Mr. Setley and Mr. Miller, and their respective business entities, put their
personal interests ahead of the interests of RAWA by overburdening RAWA with debt from the
Bond Issuances—debt that RAWA will be paying for many years in the future.
93. Indeed, RAWA was forced to incur even more costs and expenses to refinance the
improvident 2007 Bond Issuance with the proceeds from the 2015 Bond Issuance.
94. Mr. Setley and his law firm, Georgeadis Setley, additionally acted in multiple roles
in connection with the Bond Issuances, including in the role of RAWA’s solicitor, RAWA’s bond
counsel and—through Mr. Setley’s other business, Concord—as RAWA’s financial advisor.
95. Thus, it was in the financial interest of Mr. Setley, his law firm and his financial
advisory firm, Concord, to both encourage the Bond Issuances and increase their size, because the
fees earned by Mr. Setley and his businesses acting in these multiple roles would increase as the
size of the Bond Issuances increased.
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96. Making matters worse, there is no evidence that Mr. Miller and Mr. Setley
recommended that the work of bond counsel or financial advisor be bid out; rather, this work
appears to have been awarded to Mr. Setley, his law firm and Concord with little or no meaningful
debate.
97. Because Mr. Setley and his law firm were able to act in multiple roles in the Bond
Issuances without having to go through any competitive bidding processes, it is believed, and
therefore averred, that Mr. Setley, his law firm and Concord charged excessive or unnecessary fees
to RAWA in connection with the transactions.
98. Mr. Weld and BCM actively participated in this scheme by identifying and adding
projects to RAWA’s budget and capital improvement plans in an attempt to justify the excessive
size of the 2007 and 2011 Bond Issuances. Mr. Weld and BCM also benefited from increasing the
number of projects undertaken by RAWA because they received fees for providing engineering
services related to the additional projects.
99. To advance each other’s private and personal financial interests, these defendants
worked together to conceal material facts from the Board that were necessary for Board members
to make fully informed decisions as to these critical matters.
100. It is believed, and therefore averred, that RAWA will incur millions of dollars in
excessive interest and debt service charges in connection with the Bond Issuances, in addition to
the inflated and unnecessary costs and fees it incurred to issue the bonds in the first place.
Count I—Negligence
RAWA v. Mr. Setley And Georgeadis Setley
101. RAWA incorporates by reference the above allegations as if set forth at length
herein.
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102. RAWA employed Mr. Setley and his law firm, Georgeadis Setley, to provide legal
services to RAWA.
103. Mr. Setley and his law firm, Georgeadis Setley, failed to exercise ordinary skill and
knowledge in in providing legal services to RAWA.
104. Among other things, Mr. Setley and his law firm, Georgeadis Setley, failed to
properly advise RAWA as to the necessity, timing and sizing of the Bond Issuances, and further
failed to advise RAWA regarding their conflicts of interest in connection with the multiple roles
they performed during the Bond Issuances.
105. Mr. Setley and his law firm, Georgeadis Setley, also failed to properly advise
RAWA of the scope and cost of the legal services they would provide, including failing to set forth
the terms of their engagements in proper engagement letters, and subsequently providing
inadequate support for their legal bills to RAWA, which led to the overbilling and overcharging
of their client.
106. The actions and omissions of Mr. Setley and his law firm, Georgeadis Setley, were,
at worst, fraudulent and, at best, grossly negligent.
107. The negligence of Mr. Setley and his law firm, Georgeadis Setley, were the
proximate cause of damages to RAWA.
WHEREFORE, RAWA demands judgment in its favor and against Mr. Setley and his law
firm, Georgeadis Setley, jointly and severally, on Count I of its Complaint, in an amount in excess
of $50,000.00, along with costs, attorney’s fees and interest as may be allowed by law, and such
other relief as the Court feels is just under the circumstances.
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Count II—Breach Of Fiduciary Duty
herein.
109. As RAWA’s attorneys, Mr. Setley and his law firm, Georgeadis Setley, owed a
fiduciary duty to RAWA.

110. Mr. Setley and his law firm, Georgeadis Setley, breached their fiduciary duty to
RAWA by failing to act in good faith and for the benefit of RAWA in all matters for which Mr.
Setley and his law firm, Georgeadis Setley, were employed.
111. Among other things, Mr. Setley and his law firm, Georgeadis Setley, used Mr.
Setley’s position as RAWA’s long-time solicitor to control RAWA for their financial benefit, and
for the benefit of Mr. Setley’s other business, Concord.
112. This was especially true in the case of the Bond Issuances, where Mr. Setley used
his influence and control over RAWA to, in essence, “triple dip” fees at the expense of RAWA,
by ensuring that he would act as solicitor, he or his law firm would act as bond counsel and his
other business, Concord, would act as financial advisor to RAWA in the same transaction.
113. This not only allowed Mr. Setley to charge excessive or unnecessary fees in his
various roles, but also allowed him to control the timing and sizing of the Bond Issuances for his
benefit, and for the benefit of his law firm and Concord.
114. Because of their self-interest in the Bond Issuances, Mr. Setley and his law firm,
Georgeadis Setley, further failed to properly advise RAWA as to the necessity, timing and sizing
of the Bond Issuances.
115. Mr. Setley, along with Mr. Miller, concealed and/or carefully controlled the
information that would be disclosed to RAWA’s Board, to ensure that decisions made by the Board
17
PHIL1 8313784v.1
would benefit himself, his law firm, Georgeadis Setley, and his company, Concord, and would do
nothing to endanger the control Mr. Setley and Mr. Miller had created over RAWA and the
valuable business they received from their positions.
116. RAWA suffered resulting injury and damages.
firm, Georgeadis Setley, jointly and severally, on Count II of its Complaint, in an amount in excess
of $50,000.00, along with costs, attorney’s fees, interest and punitive damages as may be allowed
by law, and such other relief as the Court feels is just under the circumstances.
Count III—Breach Of Contract

herein.
118. RAWA, Mr. Setley and his law firm, Georgeadis Setley, were parties to an
enforceable contract whereby Mr. Setley and his law firm were to provide legal services to RAWA.
119. Upon information and belief, there is either no written contract or, if a written
contract exists, it is in the sole possession of Mr. Setley and his law firm, Georgeadis Setley.
120. Mr. Setley and his law firm, Georgeadis Setley, had a duty to exercise ordinary skill
and knowledge, and to provide competent legal services, pursuant to the contract.
121. As set forth at length above, Mr. Setley and his law firm, Georgeadis Setley,
breached the parties’ contract by failing to exercise ordinary skill and knowledge, and by failing
to provide competent legal services, in connection with their representation of RAWA.
122. All conditions precedent, if any, necessary to bring this action against Mr. Setley
and his law firm, Georgeadis Setley, have been met.
18
PHIL1 8313784v.1
123. RAWA has been damaged as a direct, proximate and reasonably foreseeable result
of Mr. Setley’s and Georgeadis Setley’s breaches of contract.
firm, Georgeadis Setley, jointly and severally, on Count III of its Complaint, in an amount in excess
of $50,000.00, along with costs, attorney’s fees and interest as may be allowed by law, and such
other relief as the Court feels is just under the circumstances.
Count IV— Negligence

RAWA v. Concord
herein.
125. RAWA employed Concord to provide financial advisory services to RAWA in
connection with the Bond Issuances.
126. Concord failed to exercise ordinary skill and knowledge in providing financial
advisory services to RAWA.
127. Among other things, Concord failed to properly advise RAWA as to the necessity,
timing and sizing of the Bond Issuances, and further failed to advise RAWA regarding its conflicts
of interest in connection with the role it performed during the Bond Issuances, and its close
relationship to Mr. Setley and his law firm, Georgeadis Setley.
128. Concord also failed to properly advise RAWA of the scope and cost of the financial
advisory services it would provide, which led to the overbilling and overcharging of its client.
129. Concord further allowed the underwriter to charge RAWA excessive fees to
underwrite the bonds.
130. The actions and omissions of Concord were, at worst, fraudulent and, at best,
grossly negligent.
19
PHIL1 8313784v.1
131. The breaches and negligence of Concord were the proximate cause of damages to
RAWA.
WHEREFORE, RAWA demands judgment in its favor and against Concord on Count IV
of its Complaint, in an amount in excess of $50,000.00, along with costs, attorney’s fees and
interest as may be allowed by law, and such other relief as the Court feels is just under the
circumstances.
Count V—Breach Of Fiduciary Duty

RAWA v. Concord
herein.
133. As RAWA’s financial advisor, Concord owed a fiduciary duty to RAWA.
134. Concord acknowledged that duty in writing, stating that Concord “is your fiduciary
with its interests dedicated solely to you, as our client.”
135. Concord breached its fiduciary duty to RAWA by failing to act in good faith and
for the benefit of RAWA in all matters for which Concord was employed.
136. Among other things, Concord, along with its principal, Mr. Setley, and Mr. Setley’s
law firm, Georgeadis Setley, used Mr. Setley’s position as RAWA’s long-time solicitor to control
RAWA for Concord’s financial benefit in connection with the Bond Issuances.
137. This allowed Concord to charge unnecessary fees as RAWA’s financial advisor,
and also allowed Concord to control the timing and sizing of the Bond Issuances for its benefit,
and for the benefit of its owner, Mr. Setley, and his law firm, Georgeadis Setley.
138. Because of its self-interest in the Bond Issuances, Concord further failed to properly
advise RAWA as to the necessity, timing and sizing of the Bond Issuances.
20
PHIL1 8313784v.1
WHEREFORE, RAWA demands judgment in its favor and against Concord on Count V
of its Complaint, in an amount in excess of $50,000.00, along with costs, attorney’s fees, interest
and punitive damages as may be allowed by law, and such other relief as the Court feels is just
under the circumstances.
Count VI—Breach Of Contract

RAWA v. Concord
herein.
141. RAWA and Concord were parties to an enforceable contract whereby Concord was
to provide financial advisory services to RAWA. See Exhibit A.1
142. Concord had a duty to exercise ordinary skill and knowledge, and to provide
competent financial advisory services, pursuant to the contract.
143. Among other things, Concord recognized that it had a duty to use its “best efforts”
on behalf of its client, RAWA, in connection with the Bond Issuances.
144. As set forth at length above, Concord breached the parties’ contract by failing to
exercise ordinary skill and knowledge, and failing to provide competent financial advisory
services, in connection with its engagement with RAWA.
145. All conditions precedent, if any, necessary to bring this action against Concord have
been met.
of Concord’s breaches of contract.
WHEREFORE, RAWA demands judgment in its favor and against Concord on Count VI
1
RAWA is only in possession of the contract relating to the 2015 Bond Issuance.
21
PHIL1 8313784v.1
of its Complaint, in an amount in excess of $50,000.00, along with costs, attorney’s fees and
interest as may be allowed by law, and such other relief as the Court feels is just under the
circumstances.
Count VII—Breach Of Fiduciary Duty

RAWA v. Mr. Miller And Miller Environmental
herein.
148. Mr. Miller and Miller Environmental were entrusted to provide management
services to RAWA.
149. In addition, Mr. Miller was RAWA’s executive director.
150. Mr. Miller and Miller Environmental owed a fiduciary duty to RAWA.
151. Mr. Miller and his company, Miller Environmental, breached their fiduciary duty
to RAWA by failing to act in good faith and for the benefit of RAWA in all matters for which Mr.
Miller and his company, Miller Environmental, were employed.
152. Among other things, Mr. Miller and his company, Miller Environmental, used Mr.
Miller’s position as RAWA’s executive director to control RAWA for their financial benefit.
153. Mr. Miller improperly used the Bond Issuances to pile debt on RAWA so as to
make it less likely that either the City or a private company would attempt to take it over, for the
purpose of preserving his lucrative position as executive director and Miller Environmental’s other
revenue streams from RAWA.
154. Upon information and belief, Mr. Miller also used RAWA to personally benefit
himself and his company, Miller Environmental, by strategically providing benefits to certain
favored individuals and companies at RAWA’s expense.
22
PHIL1 8313784v.1
155. Mr. Miller caused RAWA to enter into contracts with Miller Environmental to
perform services for RAWA that could have been performed more efficiently and inexpensively
by RAWA employees or other third party contractors; this allowed Miller Environmental to charge
excessive fees to RAWA, thereby enriching Mr. Miller and his company at RAWA’s expense.
156. Mr. Miller, along with Mr. Setley, concealed and/or carefully controlled the
information that was disclosed to RAWA’s Board, to ensure that decisions made by the Board
would benefit himself and Miller Environmental, and would do nothing to endanger the control he
and Mr. Setley had over RAWA.
157. Because of their self-interest in RAWA’s financial transactions, Mr. Miller and
Miller Environmental failed to properly advise RAWA’s Board and, indeed, concealed critical and
material information from RAWA’s Board regarding RAWA’s financial dealings.
WHEREFORE, RAWA demands judgment in its favor and against Mr. Miller and his
company, Miller Environmental, jointly and severally, on Count VII of its Complaint, in an amount
in excess of $50,000.00, along with costs, attorney’s fees, interest and punitive damages as may
be allowed by law, and such other relief as the Court feels is just under the circumstances.
Count VIII—Breach Of Contract

RAWA v. Mr. Miller And Miller Environmental
herein.
160. RAWA, Mr. Miller and Miller Environmental were parties to a series of
enforceable contracts whereby Mr. Miller and Miller Environmental were to provide management
services to RAWA. See Exhibit B.
23
PHIL1 8313784v.1
161. Mr. Miller and Miller Environmental had a duty to exercise ordinary skill and
knowledge, and to provide competent management and other services, pursuant to the contract.
162. Among other things, Mr. Miller and Miller Environmental were responsible for the
management of all operational, environmental and maintenance activities of RAWA, including
planning, organizing, coordinating, supervising and directing all internal and external activities of
RAWA.
163. As set forth at length above, Mr. Miller and Miller Environmental breached the
parties’ contract by failing to exercise ordinary skill and knowledge, and failing to provide
competent management and other services, in connection with their employment by RAWA.
164. All conditions precedent, if any, necessary to bring this action against Mr. Miller
and Miller Environmental have been met.
of Mr. Miller and Miller Environmental’s breaches of contract.
WHEREFORE, RAWA demands judgment in its favor and against Mr. Miller and his
company, Miller Environmental, on Count VIII of its Complaint, in an amount in excess of
$50,000.00, along with costs, attorney’s fees and interest as may be allowed by law, and such other
relief as the Court feels is just under the circumstances.
Count IX—Negligence
RAWA v. Mr. Weld And BCM
herein.
167. RAWA employed Mr. Weld and BCM to provide engineering services to RAWA.
168. Mr. Weld and BCM failed to exercise ordinary skill and knowledge in providing
engineering services to RAWA.
24
PHIL1 8313784v.1
169. Among other things, Mr. Weld and BCM failed to properly advise RAWA with
respect to the capital improvement projects used to justify the Bond Issuances prior to RAWA’s
decisions to participate in the Bond Issuances.
170. This failure caused RAWA to engage in excessive borrowing, and to incur the
concomitant, and unnecessary, interest obligations.

171. Making matters worse, after the Bond Issuances, Mr. Weld and BCM, while
knowing that the proceeds from the Bond Issuances could not expeditiously be spent on presently
necessary construction projects, actively worked hand-in-hand with Mr. Setley and Mr. Miller to
retroactively add projects to RAWA’s capital improvement plan and budget, for the purpose of
concealing RAWA’s excessive borrowing.
172. Mr. Weld and BCM also failed to advise RAWA’s Board as to these matters, and/or
concealed this information from the Board.
173. The actions and omissions of Mr. Weld and BCM were, at worst, fraudulent and,
at best, grossly negligent.
174. The breaches and negligence of Mr. Weld and BCM were the proximate cause of
damages to RAWA.
WHEREFORE, RAWA demands judgment in its favor and against Mr. Weld and BCM,
jointly and severally, on Count IX of its Complaint, in an amount in excess of $50,000.00, along
with costs, attorney’s fees and interest as may be allowed by law, and such other relief as the Court
feels is just under the circumstances.
Count X—Breach Of Fiduciary Duty

RAWA v. Mr. Weld And BCM
herein.
25
PHIL1 8313784v.1
176. As RAWA’s engineers, Mr. Weld and BCM owed a fiduciary duty to RAWA.
177. Mr. Weld and BCM breached their fiduciary duty to RAWA by failing to act in
good faith and for the benefit of RAWA in all matters for which Mr. Weld and BCM were
employed.
178. Among other things, Mr. Weld and BCM failed to advise RAWA, prior to the Bond
Issuances, that there were not enough necessary capital improvement projects to support the timing
and sizing of the Bond Issuances.
179. Instead, at the urging of Mr. Setley and Mr. Miller, Mr. Weld and BCM added
unnecessary projects to the capital improvements list to justify the amount of the bonds that Mr.
Setley and Mr. Miller wanted RAWA to issue.
180. Mr. Weld and BCM, after the Bond Issuances, then worked to add construction
projects to RAWA’s capital improvement plan and budget in an attempt to support the unnecessary
indebtedness that RAWA had incurred, and to spend the excess proceeds from the oversized Bond
Issuances.
181. Even so, Mr. Weld and BCM were unable to add enough real after-the-fact
construction projects to promptly spend the excess proceeds from the oversized Bond Issuances.
182. In doing this, Mr. Weld and BCM were knowingly serving the interests of
themselves, Mr. Setley and Mr. Miller, as opposed to serving the interests of RAWA, as they were
required to do.
183. Mr. Weld and BCM, along with Mr. Setley and Mr. Miller, concealed and/or
carefully controlled the information that would be disclosed to RAWA’s Board, to ensure that
decisions made by the Board would benefit themselves, and would do nothing to endanger their
26
PHIL1 8313784v.1
position as RAWA’s engineers (which, in turn, hinged on ensuring that nothing endangered the
control that Mr. Setley and Mr. Miller had over RAWA).
WHEREFORE, RAWA demands judgment in its favor and against Mr. Weld and BCM,
jointly and severally, on Count X of its Complaint, in an amount in excess of $50,000.00, along
with costs, attorney’s fees, interest and punitive damages as may be allowed by law, and such other
relief as the Court feels is just under the circumstances.
Count XI—Breach Of Contract

RAWA v. BCM
herein.
186. RAWA and BCM were parties to an enforceable contract whereby BCM was to
provide engineering services to RAWA. See Exhibit C.
187. BCM had a duty to exercise ordinary skill and knowledge, and to provide
competent engineering services, pursuant to the contract.
188. Among other things, BCM was required to completely disclose and discuss all
ongoing issues and action items in monthly written engineers’ reports for the Board’s consideration
and debate, and openly consult with the Board on such matters; evaluate construction and design
proposals; provide a value determination for such proposals; provide bidding assistance for
projects; provide construction administration services for RAWA; and act as RAWA’s project
representative on various construction projects.
189. As set forth at length above, BCM breached the parties’ contract by failing to
exercise ordinary skill and knowledge, and by failing to provide competent engineering services
to RAWA.
27
PHIL1 8313784v.1
190. All conditions precedent, if any, necessary to bring this action against BCM have
been met.
of BCM’s breaches of contract.
WHEREFORE, RAWA demands judgment in its favor and against BCM on Count XI of
its Complaint, in an amount in excess of $50,000.00, along with costs, attorney’s fees and interest
as may be allowed by law, and such other relief as the Court feels is just under the circumstances.
Count XII—Aiding And Abetting Breach Of Fiduciary Duty

RAWA v. Mr. Setley, Georgeadis Setley, Concord, Mr. Miller,
Miller Engineering, Mr. Weld And BCM
herein.
193. Mr. Setley, Georgeadis Setley, Concord, Mr. Miller, Miller Engineering, Mr. Weld
and BCM each owed to RAWA a fiduciary duty.
and BCM each breached their respective fiduciary duty to RAWA.
and BCM each was aware of the other’s fiduciary duty to RAWA.
and BCM each intentionally and knowingly acted in concert with the others pursuant to a common
design for the purpose of substantially assisting or encouraging the others to breach their respective
fiduciary duties to RAWA.
28
PHIL1 8313784v.1
197. RAWA suffered injury and damages as a direct and proximate result of the actions
and inactions of Mr. Setley, Georgeadis Setley, Concord, Mr. Miller, Miller Engineering, Mr.
Weld and BCM, as set forth above.
WHEREFORE, RAWA demands judgment in its favor and against Mr. Setley, Georgeadis
Setley, Concord, Mr. Miller, Miller Engineering, Mr. Weld and BCM, jointly and severally, on
Count XII of its Complaint, in an amount in excess of $50,000.00, along with costs, attorney’s
fees, interest and punitive damages as may be allowed by law, and such other relief as the Court
feels is just under the circumstances.
Dated: October 22, 2019 //s// Douglas F. Schleicher

Douglas F. Schleicher
Glenn A. Weiner
William J. Clements
KLEHR HARRRISON
HARVEY BRANZBURG LLP
ph (215) 569-2700
fax (215) 568-6603
gweiner@klehr.com
wclements@klehr.com
Attorneys for Plaintiff,

Reading Area Water Authority
29
PHIL1 8313784v.1
ph (215) 569-2700
fax (215) 568-6603

________________________________________
:
Plaintiff, :
:
v. : Docket No.
:
:
SETLEY :
nd
:
PUBLIC FINANCE :
:
DEAN MILLER :
:
:
PHIL1 8318647v.1
TOM WELD :
:
-and- :
:
BCM ENGINEERS :
:
_________________________________________ :
CERTIFICATE OF MERIT AS TO MICHAEL SETLEY, ESQUIRE AND

GEORGEADIS SETLEY RAUCH & PLANK, LLC, D/B/A/ GEORGEADIS SETLEY
I, Douglas F. Schleicher, attorney for plaintiff, Reading Area Water Authority, hereby
certify that:
1. as to defendant Michael Setley, Esquire, an appropriate licensed professional has
supplied a written statement to the undersigned that there is a basis to conclude that the care, skill
or knowledge exercised or exhibited by this defendant in the treatment, practice or work that is the
subject of the complaint, fell outside acceptable professional standards and that such conduct was
a cause in bringing about the harm; and
2. as to defendant Georgeadis Setley Rauch & Plank, LLC, d/b/a/ Georgeadis Setley,
the claim that this defendant deviated from an acceptable professional standard is based solely on
allegations that other licensed professionals for whom this defendant is responsible deviated from
an acceptable professional standard and an appropriate licensed professional has supplied a written
statement to the undersigned that there is a basis to conclude that the care, skill or knowledge
exercised or exhibited by the other licensed professionals in the treatment, practice or work that is
the subject of the complaint, fell outside acceptable professional standards and that such conduct
was a cause in bringing about the harm.
PHIL1 8318647v.1
Glenn A. Weiner
William J. Clements
KLEHR HARRRISON
ph (215) 569-2700
fax (215) 568-6603
gweiner@klehr.com
wclements@klehr.com

PHIL1 8318647v.1
ph (215) 569-2700
fax (215) 568-6603

________________________________________
:
Plaintiff, :
:
v. : Docket No.
:
:
SETLEY :
nd
:
PUBLIC FINANCE :
:
DEAN MILLER :
:
:
PHIL1 8318684v.1
TOM WELD :
:
-and- :
:
BCM ENGINEERS :
:
_________________________________________ :
CERTIFICATE OF MERIT AS TO TOM WELD AND

ATC GROUP SERVICES, LLC D/B/A BCM ENGINEERS
I, Douglas F. Schleicher, attorney for plaintiff, Reading Area Water Authority, hereby
certify that:
1. as to defendant Tom Weld, an appropriate licensed professional has supplied a
written statement to the undersigned that there is a basis to conclude that the care, skill or
knowledge exercised or exhibited by this defendant in the treatment, practice or work that is the
subject of the complaint, fell outside acceptable professional standards and that such conduct was
a cause in bringing about the harm; and
2. as to defendant ATC Group Services, LLC d/b/a/ BCM Engineers, the claim that
this defendant deviated from an acceptable professional standard is based solely on allegations that
other licensed professionals for whom this defendant is responsible deviated from an acceptable
professional standard and an appropriate licensed professional has supplied a written statement to
the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or
exhibited by the other licensed professionals in the treatment, practice or work that is the subject
of the complaint, fell outside acceptable professional standards and that such conduct was a cause
in bringing about the harm.
PHIL1 8318684v.1
Glenn A. Weiner
William J. Clements
KLEHR HARRRISON
ph (215) 569-2700
fax (215) 568-6603
gweiner@klehr.com
wclements@klehr.com

PHIL1 8318684v.1

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_________________________________________

READING AREA WATER AUTHORITY : IN THE COURT OF COMMON PLEAS

wclements@klehr.com Reading Area Water Authority

1. This is an action by RAWA, a municipal water authority, against its former

and, ultimately, being burdened with excessive debt.

businesses at RAWA’s expense.

“Bondholders”; § 5611 “Investment of authority funds”; § 5612 “Money of authority”; § 5614

taxation and payments in lieu of taxes.”

organized under the Act.

City (the “Board”).

firm, Georgeadis Setley.

The Solicitor And Bond Counsel Defendants

12. Defendant Mr. Setley is a citizen of the Commonwealth of Pennsylvania, and is an

attorney licensed to practice law in this Commonwealth.

laws of the Commonwealth of Pennsylvania.

14. Mr. Setley is a partner in Georgeadis Setley.

and Bucolo, LLC.”

the 2011 and 2015 Bond Issuances by RAWA.

Plaza, 2nd Floor, Wyomissing, PA 19604.

The Financial Advisor Defendant

18. Mr. Setley is also an owner and/or principal of defendant Concord.

Rulemaking Board (the “MSRB”).

competitive or negotiated methods of completing a transaction; (iv) recommending a plan of

completed in accordance with its client’s expectations and needs.

Mr. Setley’s company, Concord, acted as RAWA’s financial advisor.

The Executive Director Defendants

executive director of RAWA.

26. Mr. Miller is the owner and/or principal of Miller Environmental.

Georgeadis Setley, controlled RAWA.

320 South 17th Street, Reading, PA 19602.

The Engineer Defendants

31. Mr. Weld is a citizen of the Commonwealth of Pennsylvania.

32. BCM is a foreign limited liability company registered to do business in the

located at 920 Germantown Pike, Suite 200, Plymouth Meeting, PA 19462.

Jurisdiction And Venue

which the causes of action arose took place in this county.

to impose personal jurisdiction over the out-of-state defendant in this Court.

with the formation of RAWA in the mid-1990s.

in that capacity until he resigned in 2016.

of their respective business entities. This created conflicts of interest.

failed to carry out their mandated oversight duties.

necessarily to RAWA and its citizen constituents—would be made.

(which Mr. Setley and Mr. Miller referred to as “executive sessions”).

RAWA’s Bond Issuances

face amount of $25 million (the “2007 Bond Issuance”).

2007 Bond Issuance.

connection with the 2007 Bond Issuance.

conflicts of interest arising from Mr. Setley’s ownership of Concord.

face amount of $50 million (the “2011 Bond Issuance”).

connection with the 2011 Bond Issuance.

connection with the 2011 Bond Issuance.

connection with the 2011 Bond Issuance.

ownership interest in both entities.

face amount of $25.13 million (the “2015 Bond Issuance”).

in connection with the 2007 Bond Issuance.

connection with the 2015 Bond Issuance.

connection with the 2015 Bond Issuance.

Mr. Setley, controlled RAWA.

Mr. Setley’s Other Wrongful Conduct, Including Conflicts Of Interest

financial advisory firm played in connection with the Bond Issuances.

performed for RAWA.

unwilling to produce back-up materials to support his billings to RAWA.

those services were necessary or valuable to RAWA.

participated on both sides of transactions with RAWA.