EDITORIAL: The Cost of Lawsuits

April 1, 2013

Last week somebody posted the following notice on the Cape Charles Post Office telephone pole:

DID YOU KNOW??

ATTENTION

So far our town of Cape Charles has 

spent $76,386.01 of your money for

attorney’s fees to respond to the lawsuit 

from Old School Cape Charles.

You and every other town resident will

pay for this foolish lawsuit!!!

Ask the Wave . . . why they didn’t 

publish this!

So far, no one has asked the WAVE — but if they did we would refer them to our March 4 analysis, where we wrote: Records show that since July 1 of last year, the Town has spent almost $64,000 on the [Old School lawsuits].

There were legal costs prior to July 1, so the anonymous telephone poll poster probably got it right: total attorney fees of $76,386 and, to be precise, one penny.

If the unknown informant had wanted that fact circulated to the most possible people, he or she could have written a letter to the editor at the WAVE. We would have published it. (Of course, that would have required the writer to have the courage to identify himself.)

But there was even another way: send it for publication in the ANONYMOUS section of the WAVE. We would have published that as well.

Regardless, the unknown writer raises a salient, if unintended, point: why does the Town of Cape Charles, with a population of 1,000, spend so much money on lawyers?

The $76,000 is not the total cost for Old School legal fees. As the WAVE has reported, the Town paid its own attorney $15,000 just to review the contract to convey the Old School to a developer for a price of $10.

That should make the Guinness World Records:  legal costs were 1,500 times the sales price.

Worse, Town Council proceeded to ignore the Town attorney’s advice to require a performance bond and a buyback option in the contract. So if the developers fail to carry out their plan to convert the school and parkland into a 17-unit apartment building, there is no penalty, and nothing the Town can do about it.

Except, perhaps, sue. And at what cost?

The $15,000 legal fee also seems money badly spent considering that the Town attorney failed to raise a red flag over language in the contract stating that Purchaser shall not operate the Project as a low-income housing facility under any state or federal program. That got the Town in hot water with fair housing advocates and, as a result, state legislators. After the building was already sold, the Town revised the contract to drop the offending language.

So, adding the $15,000 fee to review the Old School contract to the $76,000 to answer the lawsuit brings the legal cost to the taxpayer to $91,000.

CONTINUED FROM FIRST PAGE

Of course, the implication of the telephone pole poster is that Cape Charles residents had no business objecting to the decisions of their elected Town officials.

Just because Town Council held illegal secret meetings to give away the school and parkland, local residents should have remained silent. (The meetings were illegal because Virginia code 2.2-3712 requires that ”No closed meeting shall be held [without] a motion that . . . identifies the subject matter . . . . A general reference to the . . . subject matter of the closed meeting shall not be sufficient to satisfy the requirements for holding a closed meeting”).

Just because Town Council failed to offer the school and parkland to the highest bidder (normally a requirement when divesting public property), residents should not have objected.

And just because none of the three members of Town Council whose term expired June 30 was returned to office, no one should object that those same three lame ducks voted to sell the school only days before their terms expired. It’s very unlikely that Town Council could have obtained the three-fourths majority required to sell (or give away) Town property had they waited a few days longer for the newly elected members to take office.

The Town of Cape Charles is no stranger to legal battles and the resulting costs. They’ve been going on well before the Old School debacle. For example,  the WAVE reported last July that taxpayers footed $80,000 in attorneys’ fees for a legal wrangle with South Port Investors over the Cape Charles Yacht Center now under construction.

And there are more legal fees to be borne. After the Town failed to follow its own design requirements for building new structures in the Historic District (specifically a bathroom in Central Park designed to resemble an adjoining c. 1980s sewage pump station), a resident filed suit in Circuit Court.

As of February the Town attorney had received over $2,000 to look into that matter. We can expect the final cost to be far greater.

The bottom line is that, yes, this little town spends a huge amount of your money on lawyers. We believe that the taxpayers should be asking: Why?