Attorney representing town for arbitration speaks to subcommittee
Published 7:11 pm, Thursday, June 23, 2011
Tim Fisher, the attorney representing New Canaan in the Lakeview Avenue Bridge arbitration, went before the Town Council subcommittee Wednesday night to discuss the more than $800,000 in legal bills accrued during the arbitration process.
"When we entered into this case, we looked at it as we understood it at the time and made judgements as we went along as to how to defend it and how to approach settlement opportunities," Fisher, an attorney with McCarter & English, LLP, said. "When this case commenced at the end of 2008, the town viewed this claim ... as having very little merit."
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The matter itself stems from a conflict between the town and Loureiro Contractors concerning the Lakeview Avenue Bridge construction in 2008. The town went into arbitration after withholding $250,000 from the contractors and claiming the firm was delaying the construction project. According to documents, Loureiro Contractors claimed the work was delayed due to unforeseen complications with underground utilities, overhead wires and flooding.
Going into the case, before the arbitration hearings began, Fisher advised the town as to how much he expected the legal bills to cost depending on the number of hearings. At that time, nearly two months before the hearings began, Fisher estimated the cost to be between $150,000 and $200,000 only concerning legal bills involved with hearings.
"That estimate was based on how long we thought the hearings would run, which was in turn based on what we understood the issues in the case would be and based also on the size of the dispute," Fisher said. "We assumed that the contractor would not intend to spend more on this case than it was worth from the contractor's perspective. And between that and our assessment of what the issues were, we anticipated a certain number of hearing dates. And based on that, we made a judgement call as to what the likely costs were going to be."
Initially, it was assumed nine hearings would be held in front of the arbitrators including expert witnesses and evidence analysis among other things. Instead, there were nearly 22 hearings, jacking up the price of the legal bills. In July 2010, the town had already spent $275,000 in legal bills after 13 hearings. That figure does not include $70,694 in legal bills prior to the hearings.
"So yes, there were three more hearing dates than anticipated," Town Council subcommittee member Tom O'Dea said. "But you're well beyond what your estimate was on cost."
In terms of predicting the costs after July when the hearings had already exceeded the estimated cost, Fisher explained it would have been too difficult to tell how much money was left due to the unpredictable nature of the case.
"At that point in time, in June [of 2010], we didn't know how much more it was going to cost," he said. "What we knew was that month was going to be $80,000 or so and in fact the next month was $100,000. But we didn't know what it was going to be the next month and, more importantly, we didn't know how many more months like that it was going to be. So we knew we had a problem; we didn't know its dimensions. In terms of what was the alternative available to us, we didn't know for sure what they would have taken," Fisher said. "But we learned, a couple to three months later, was the lowest number they were willing to articulate was $800,000. You know we certainly spent less than $800,000 after that point and we didn't know where the arbitrators were going to come out. So we had three unknowns that we were grappling between."
When asked about the settlement, Fisher explained that once the hearings began, and even before, the town never thought the contractors would agree to have reasonable discussions on the matter.
"There was no indication that the other side was going to settle for any amount less than $800,000," Fisher said. "We couldn't control it but we tried to predict it assuming there was a rational decision making about how expensive to make this case given how much the other side was looking for. We truly believed it would not be in [LCI's] interest to have this case go 20-plus hearings and planned our strategy accordingly."
So after 13 hearings, the town spent $275,000 in legal fees.
Fisher said they had the option of pursuing the case less aggressively in order to save money, but he explained that the arbitrators could have assumed the town had given up on the case and awarded the contractors more than the current $650,000 award.
Also in regards to settlement, Director of Public Works Michael Pastore and Town Attorney Christ Jarboe said that if the town chose to settle the claim, the 80 percent reimbursement from the state would have been revoked.
"I think it was almost certain that if we settled, we weren't going to get reimbursed," Pastore said.
Additionally, Fisher indicated that throughout the process he mainly interacted with Pastore, First Selectman Jeb Walker and Town CFO Gary Conrad. Fisher's only meeting with other town officials was an executive session with the Board of Finance in September 2010, where he outlined the major issues in the case up to that point. In terms of all meetings concerning the arbitration, there were three Board of Finance and three Board of Selectmen executive sessions.
The subcommittee also asked Fisher to entertain the idea of some kind of credit to give back to the town regarding the legal bills. While making no promises, Fisher did indeed say he would look into seeing how that would work. Fisher also told the subcommittee that he had stopped billing the town, indicating this last visit was of no charge.
"I would be asking the same questions if I was in your position," Fisher said. "I very much respect this process and I think you've been asking the right questions. I've thought a lot about this in advance hoping that I would be able to answer them well. I'd be happy to go home but I'm also happy to stay as long as it takes because I recognize the importance of this."
The subcommittee will next meet June 30, where they will have discussions with the Board of Selectmen.