Superior Court Judge Thomas J. Hutchins ruled Tuesday a court-appointed receiver improperly collected $25,500 in special assessments from 264 Simi Valley homeowners.

In clarifying an earlier ruling, Hutchins ordered the Le Parc Community Association to re-collect the money by Oct. 1 for eventual payment toward a $7.2 million debt awarded ZM Corp. during arbitration last year.

The decision left both sides of a complex legal battle bitter.

"If I do my job correctly, nobody is going to be happy; that's just the way it works," Hutchins said before his decision.

ZM attorneys argued it was unfair to order the money returned, that homeowners have done nothing to pay off the judgment and that stripping the receiver of powers to levy assessments would hamper delinquent notices -- the "teeth" of court rulings leading to eventual foreclosures.

"The association has done nothing, absolutely nothing, to satisfy the judgment," ZM attorney Glen Campbell told the judge. "We are doing everything proper under the court order.

"It's tantamount to try to unring the bell."

Homeowners, tired of unpaid utility bills, uncollected trash, frozen assets and possible foreclosures at the west Simi Valley complex, argued Hutchins should allow them the right to pay bills out of their monthly dues.

Resident are on the verge of losing outdoor electricity, water, gas and trash services as a result of thousands of dollars worth of unpaid bills.

"We're just asking for enough money to continue running this place, to grant order where chaos exists," said Robert Long, an attorney representing the Le Parc Community Association.

Jim Lingl, attorney for the former association, whose board was accused of breach of contract and defamation of ZM Corp. five years ago, said injuring homeowners was not the intent of Hutchins' earlier ruling.

"The people who have had their pockets robbed, the people who have paid money, are not part of this action, they have been threatened with foreclosure," Lingl said. "That is not pursuant to the court's order."

But whereas Hutchins was willing to clarify a June 8 decision ordering Le Parc's new homeowners association to levy a $166-a-month special assessment to pay off the judgement, he was not willing to order an exemption for utilities without a new motion.

"The (ZM) receiver can keep the golden goose alive, or not. He could take it all," Hutchins said. "I don't know why you guys haven't worked any of this stuff out, but that's beside the point."

Two dozen Le Parc residents expressed sadness a solution was not at hand.

"I paid over $300 last month and the utilities still aren't paid," Celeste, a 33-year-old Le Parc owner, said. "I can't afford $300, and still have trash. There are going to be rats everywhere."