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Finance committee hears update on repeated development lawsuits; staff recommends restoring legal-defense reserve
Summary
Committee members were briefed on an ongoing series of lawsuits tied to a local development. Staff said insurance coverage has been exhausted for those claims and recommended adding approximately $100,000 to next years legal-defense budget to allow more aggressive counsel and potential pursuit of vexatious-litigation remedies.
The finance committee reviewed litigation tied to a multi-year development dispute and heard that several related claims have exhausted insurance for that series of allegations, leaving the city to cover further legal costs directly.
"An additional claim was filed against the city recently and has been filed with the Fourth District Court," said the staff member reporting on the matter. The staff update noted the complaint references a letter written in August 2019 and asks the city to alter records; staff said they will not change official records retrospectively.
Staff told the committee the city has roughly $14,000 remaining from a prior insurance payment tied to the matter and that insurers are now viewing later claims as part of the same series. For that reason, staff recommended placing $100,000 back in the budget as a legal-defense reserve for next year. "As of right now, they are considering this part of that one big lawsuit, so they deny that they're gonna cover it anymore," said Chris, the staff presenter. "So weve been asked to put a hundred thousand dollars back in there again for next year."
Committee members discussed legal strategy. Several said they were frustrated that repeated suits had been dismissed historically but continued. Members asked whether the city has the right counsel and whether it should recruit a more aggressive municipal-real-estate litigator. One committee member volunteered a name of an attorney with relevant experience and said the firm could be contacted for a proposal.
Staff also said that if the claims remain active, the city may pursue state-level remedies related to vexatious litigation. "The mayor brought it up in a public meeting in the town hall, that they are going to push back on this one and go after the laws in the state," the staff speaker said.
The finance committee did not take a formal vote solely on adding the $100,000 but included discussion of restoring legal reserves as part of the committees recommended budget package to the city council.
