Editor’s note: This article is the latest in a continuing series on the cost of legal fees and related attorney contract and lawsuit issues in Fairhope. 

The city has been in violation of state law in the way it awards attorney contracts for at least a decade, according to information developed the past three months by the Fairhope Courier. 

Alabama law specifically requires that all municipal contracts be in writing, and also gives primary authority for approving such contracts to the City Council. 

With one recent exception, Fairhope has never reduced its attorney contracts to writing, or had them approved by council, since at least 2000, when Mayor Tim Kant first took office, according to information developed by the Courier. 

During recent interviews, Kant stated that contracts for outside counsel, such as in the multi-million dollar “Dyas triangle” litigation and the July lawsuit filed by the city’s insurance carrier to withdraw from defense of that two-year-old case, have never been in writing or brought before the council for approval during his years in office. 

“So far as I know, there aren’t any,” said City Clerk Lisa Hanks, responding last month to the Courier’s request for all written contracts with attorneys representing the city, its officials and staff in all pending litigation. 

The award of such attorney contracts, including the hourly fees negotiated with law firm attorneys, has always been handled out of the mayor’s office, in consultation with the appointed city attorney, without written contracts or council approval, Kant said. Such procedures for handling contracts with outside counsel were inherited from the previous administration before he took office almost 10 years ago, the mayor said. 

New scrutiny of how the city handles attorney contracts was spurred by the disclosure at last week's council meeting that the mayor had hired the Hand Arendall law firm to defend the city and mayor in the lawsuit brought by the city's insurance carrier. The Alabama Municipal Insurance Corp. sued the city and Kant July 7 to withdraw from defense of the Dyas case, claiming it was not obligated to pay legal fees or any judgments in the case. 

Attorneys with the Hand Arendall firm have defended the city and Kant in that complex litigation, set for a February jury trial in Mobile federal court, since it was filed in April 2008. Because the hourly fee rates of that firm’s attorneys involved in the case exceeded AMIC's cap, an arrangement was reached for the city and insurer to share in payment of the law firm bills. 

“I guess because the Hand Arendall firm had been dealing with the Dyas case, and this is what it was pertaining to, I just kept the same counsel,” Kant said Wednesday. “If the (City Council) doesn’t want to use the attorneys that are representing us, I guess they have every right to change that.”

Like the Dyas lawsuit before it, the contract for the hiring of the Hand Arendall firm on the AMIC case was neither put in writing nor submitted to the council for approval. In addition, the council’s legal liaison was not informed of the AMIC lawsuit, city officials and staff said.

The handling of that attorney contract, in addition to violating state law, also violates recent city laws adopted by the council and signed by the mayor since the current council took office in November 2008. One of those resolutions requires that all contracts for attorney and other professional services be submitted to the council for approval. The other resolution requires that Councilman Rick Kingrea, the council's legal liaison, be briefed on all pending cases and provided with contracts made with law firms representing the city.

“For whatever reason, (Kingrea) was not kept in the loop when we first got noticed,” Kant said regarding the filing of the AMIC lawsuit against the city and mayor. “We need to make sure in the future he is notified. Ultimately it was my fault for not double-checking to make sure (he was notified).”

Hanks said when her office received the AMIC complaint, it was sent to the city attorney. In the past, when her office has received lawsuit complaints, they have been sent to the city attorney and the local insurance agent for AMIC, she said. 

“I inherited those procedures from (the last city clerk),” Hanks said.

The Alabama League of Municipalities has written extensively on municipal contracts in one of its publications, and an attorney  for ALM said attorney contracts should be in writing and approved by the council.

“Municipal contracting is a two-step procedure requiring cooperation between the mayor and the council,” states a 2008 article by ALM. “Ordinarily, the council must decide whether the municipality should enter into the contract. After the council votes to accept a contract, the mayor must then execute the contract for the municipality.” 

That article stated that the validity of city contracts is frequently a subject decided by courts. 

“You can almost say that contract (with AMIC) is null and void because the council did not approve it, and the mayor does not have the authority to hire an attorney; that's the council’s job,” said Council President Lonnie Mixon, after learning about the circumstances surrounding that lawsuit. “That contract should have been brought before the council.”

Councilwoman Debbie Quinn stated she thought it was too late to change law firms in the AMIC case, but noted the reason for adopting the resolution regarding professional service contracts was to get some reasonable control over those expenses.

“Mobile County, Mobile school board and others have definite procedures in place before they hire any firm,” she stated. “It will be nice when we can move forward with something similar.” 

Mixon said the council needs to get involved immediately in the current AMIC case, as well as regarding how future attorney contracts are handled.

“I think we have no choice but to get involved and get the information and find out, and then for us to make a decision,” Mixon said about the city’s hiring of the Hand Arendall firm in the AMIC case. “That’s our job. We’ve got to get in there and do that. Just because (the mayor) said he hired (that firm) doesn’t make it legal.”