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HISID: See you in court! Board rejects settlement offer in Bischoff class-action suit
HOLIDAY ISLAND -- More than 200 property owners and residents attended a jam-packed and at times highly emotional meeting at the Clubhouse Monday night to hear the Board of Commissioners discuss and vote on settlement offers made in two lawsuits against the district.
In the case of Bischoff v. HISID, property owner David Bischoff initially filed suit questioning the legality of the Assessment of Benefits performed in 2011. Bischoff later filed two amendments to the complaint, the second dated Jan. 25. It expands the complaint to an illegal exaction class-action suit, alleging that HISID has engaged in illegal levy and collection of assessments over many years, resulting in no balance in its AOB upon which to levy assessments anymore and challenges several types of expenditures, such as the sewer plant debt fee, the security fee, the water tower fee, separate amenities fees, the contract for deputies and marketing.
In a letter the district received Friday from Bischoff's attorney, Tim Hutchinson, Bischoff offered a "settlement framework" that gives HISID relief from having to repay all past levies and establishes an arbitrary method of continuing to generate revenue, but only for a few years. The settlement offer asks for payment of Bischoff's attorney fees, which currently stand at around $200,000.
The HISID board voted unanimously on a motion by Commissioner Ken Brown to fight this suit "to the fullest extent of the law" and to engage a law firm with success in defending class action suits to assist Attorney Matt Bishop in the case. Bishop said he would welcome help in the case and warned the board the entire process would take at least two years if it goes to court.
Brown, addressing the suit, said reading it is "not something to go to sleep on; it will keep you awake."
He said it would "just about make you cry" and that if it's passed by a judge and not fought, "We're done at Holiday Island. We're done."
He added he was "shocked that two of our homeowners would bring this upon us."
Commissioner Linda Graves said she believes there is some basis on which to fight it.
"If I have anything to say, by God we are going to fight this."
She also said she has no reason to believe the district assessor, Tom Reed, who is a certified appraiser, did the assessment wrong, but "if we find he did it improperly, we should sue him, too."
Property owners were allowed to speak, and several urged the board to settle the suit to avoid miring the district in a drawn-out, costly court case. But others, such as former BOC Chairman Linda Griswold, urged the board to "hire the best damn lawyers money can buy and counter-sue."
Some appealed directly to Bischoff, who was at the meeting, asking him to drop the suit.
"I pray you will go home tonight and think seriously about what you're doing," said a tearful Mary Smith. "...Please, when you go home, have the dignity and courage to rescind this lawsuit."
"You may have a cause for action -- we may have done some things wrong," said Barb Kuhn, "but wouldn't it have been better to try to come up with a solution rather than take us all down?"
Commissoner Bruce Larson said the suit seems like "legal extortion," to pay $200,000 in attorney fees and then use arbitrary numbers for any further assessments, which will only keep the district afloat for a year or two. But he also later urged people not to "vilify" the Bischoffs.
"I think they started in on this with some valid concerns, and then it got out of control."
Commissioner Greg Davis said the board should continue to use Bishop to try to negotiate a settlement. He was the lone dissenting voice at the start of the meeting to add hiring a law firm experienced in class action suits to the agenda.
Chairman Ken Ames' voice was the most vehement when he said to the crowd and to Bischoff, "Most of you know me -- I cut to the chase, I don't mince words, so here is my comment: See you in court!"
His statement was greeted with cheers and loud applause.