HISID attorney makes few comments on Bischoff case, developer says suit could have been settled inexpensively

Tuesday, April 2, 2013
Attorney Tom Kieklak, representing HISID on the Bischoff lawsuit, explained he did not want to answer specific questions about the case, as it might hurt the district's chances of winning it. Kathryn Lucariello / Carroll County News

HOLIDAY ISLAND -- In a special meeting Monday evening, HISID attorney Tom Kieklak spent more time lecturing on law topics than on talking about the assessment of benefits lawsuit, David Bischoff v. HISID. At the end of the meeting, developer Tom Dees took the Board of Commissioners to task for not settling the suit when it could have been less expensive.

Kieklak cautioned it is rare for attorneys to give public presentations about a case in litigation or talk about litigation strategy.

He said he was hired to give the district the best chance in a legal system that is set up as an "adversary system."

"There is no way to do that if I litigate the case to the world ahead of time," he said.

He said the Bischoff complaint was amended, and the case is currently in discovery, which is "the lengthiest and most costly phase of the case." But he also said he doesn't see anything "abusive" in the plaintiff attorney's discovery requests. Those requests number 23 pages.

Kieklak said if the case goes to trail, it is unlikely any Holiday Island property owner would be able to sit on the jury, as the person is automatically a member of the class bringing suit.

He said if there is an appeal, the appeal would go directly to the state Supreme Court because it is an illegal tax exaction case.

"An appeal typically takes nine months to a year," he said.

He said Arkansas has the "second-most intrusive FOIA in the country," and that there is no attorney-client privilege in Arkansas. Lawyers' files are open to inspection by the public, he said, following the Fayetteville-Edmark case of 1990.

While he acknowledged that some suburban improvement districts in Arkansas are meant to be temporary, Kieklak said the district and the plaintiff have a fundamental difference about the interpretation of legislation regarding the perpetuity of SIDs.

"Your side, if you're the district's side, believes that a suburban improvement district is not a temporary animal that is meant to begin improvements that will eventually become a city. Your side believes that an improvement district is authorized by state law, and by its character can continue in perpetuity." (Ed. note: This sentence was misquoted in our April 2 Midweek print edition due to a faulty sound recording. We apologize for the error.)

He said a SID could dissolve itself once it has paid its debts, but doesn't have to.

"The theory that assessments are finite and are drained over time, based upon the initial value of the improvement or additional improvements would run up against this enabling legislation which tells us that improvement districts may continue in perpetuity," Kieklak said.

He said the opposition's proposal of setting a new value for assessments which then wind down and force the district to choose a new form of government would "not come from the legal process" of having an appraisal and an assessment and might therefore leave the district open to new litigation.

The board had several questions, and then the public was allowed to ask questions or make statements, and several people spoke, most expressing concerns about the cost of litigation.

Kieklak said that as far as attorney fees are concerned, it is customary in Arkansas to follow the rule "you pay your own way."

At the end of the meeting, in response to questions from the public about whether developer Tom Dees had been instrumental in nearly getting the lawsuit settled, Dees himself stood up and said he had met with Bischoff's attorneys for two hours and had "worked out a deal that could solve this whole thing."

He said he had also met privately and individually with all five HISID board members and told them he thought it could be resolved, that Bischoff would go with it. At the next board meeting, he said, the board was asked if there was anything new in the case, and they said no, and also said no at the next meeting a week later.

"I've done my part. I've had this thing settled four, five or six times," Dees said. "They won't pull the trigger. It's very simple."

He said the board has never acknowledged his private meetings with them, with which Chairman Ken Ames disagreed, and then added, "Tom, you're right, you did give us a proposal, but we haven't seen anything back in writing. Where's that?"

When Dees recounted not being allowed in the bank conference room last fall to take part in settlement talks with former Chairman Linda Griswold, Ames attempted to cut him off. Several people in the audience said, "We need to know this!" and many applauded.

"We could have settled this thing for $5,000 to $10,000, is that true?" Dees continued, then turned to the Bischoffs, sitting in the audience. "Bischoffs, is that true?"

"True," said Kathy Bischoff.

"We couldn't even get in the building," he said. "I've been here 33 years, and I couldn't even go in the doggone building."

He said he had "never done anything to hurt this place, and you know it."

Commissioner Ken Brown said his concern was about the lawyers' fees on the Bischoff suit, and the first document he received as a commissioner was for attorney's fees of $200,000, then heard a rumor it had gone up to $250,000, and he said he doubted the attorneys had worked 1,000 hours at $250 per hour to claim $250,000 in legal fees.

"I don't think they should get that kind of money, and the same is true with the other lawsuit (Table Rock Landing v. HISID)," he said. "We have about a million in reserves in Holiday Island. It should not be spent on attorneys, ours included."

"We've got four attorneys on the payroll," Dees said. "HISID does. Four. There's your answer right there."

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