FAIRHOPE, Ala. — The lawsuit against the city of Fairhope and Timothy M. Kant and defended by a Mobile law firm that received $181,329 in attorney fees from the city last month has a new trial date, which is now scheduled to begin more than two years after the case was first filed.

Originally set for jury selection next month, the trial in the federal lawsuit brought by members of the Dyas family against the city of Fairhope and Kant over the so-called “Dyas Triangle” property has been rescheduled to May 4, 2010, according to federal court records.

After an Oct. 6 conference with attorneys for the parties, the new trial date and discovery schedule were set by U.S. Magistrate Katherine Nelson, who is handling motions and other preliminary matters in the lawsuit that will be tried by Judge William Steele of the federal district court in Mobile.

Nelson’s order requires that all depositions and other discovery be completed by Jan. 4 and that a pretrial conference before the trial judge will occur on April 20.

“This is a firm pretrial setting, and the parties should be ready for trial by the pretrial conference,” the Oct. 6 order stated. “The parties estimate that the trial of this action will require one week.”

The lawsuit was initially filed April 2008 in state court in Baldwin County by Charles, Arthur, Pamela, Drew and Eric Dyas against the city of Fairhope and Kant, but the case was moved to the federal court in Mobile by the defendants a month later.

The plaintiffs claim that the city, Kant, and others who are identified by the letters A-G, instead of by name, are “guilty of conspiring with Fairhope Mayor Timothy M. Kant and others for the purpose of depriving plaintiffs of their vested rights in the Village North PUD approved by the City of Fairhope in 2002.”

Bordered by U.S. 98, Veteran’s Drive and Highway 104 at the northern entrance to Fairhope, the “Dyas Triangle” was the site of an earlier federal lawsuit by the Dyases against the city, which resulted in a settlement and creation of the planned unit development called Village North. Although plans for a mixed-used development were approved by the city for that property, which included an 18,000-square-foot commercial building, the property has not been developed and remains a wooded tract of land at the Scenic Highway 98 entrance to the city.

One of the main issues in the lawsuit concerns how development plans for the so-called “Corte Rectangle” property, owned by Arthur Corte and located across U.S. 98 at Parker Road, were treated differently by the city than for plans to develop the Dyas property.

After the developers of the Corte property received approval from the city for a 52,000-square-foot building, the developers of the Dyas property sought a similarly sized commercial building on their property, which was denied by the city. The lawsuit followed that denial.

The commercial phase of the “Corte Rectangle” property has been developed, where there is now a 52,000-square-foot Publix Super Market that opened last summer.

FY 2010 budget

projects reduced legal fees

The council met privately in an executive session last month to discuss pending lawsuits and how the various projected litigation costs should be accounted for in the budget adopted on Sept. 28.

The budget adopted by the council for this fiscal year, which started Oct. 1, shows $300,000 for legal expenditures projected during the next 12 months. But that amount was projected when the trial date in the Dyas case was scheduled for early November.

This year’s budget amount for legal fees contrasts with $460,403 for legal expenditures projected in the amended budget for last year.

However, during Monday’s City Council meeting, Councilman Rick Kingrea complained about the size of the attorney fees the city had paid recently and might face in the future if steps weren’t taken to control the costs.

He stated specifically that the Hand Arendall law firm, three of whose attorneys are representing the city and Kant in the Dyas lawsuit, received payments of $181,329 in September alone.

According to city records, the law firm received the following payments by check last month: $65,997 on Sept. 3; $23,227 on Sept. 10; and $92,105 on Sept. 24.

Not all those fees are associated with the Dyas lawsuit, because an attorney for that firm also represents the city’s Planning and Zoning Commission on an ongoing basis, and the firm also handles other litigation-related matters for the city.

However, a recent ruling in the Dyas lawsuit could result in increased fees paid to the Hand Arendall firm during the next three months.

One of the hotly contested pretrial discovery issues in the lawsuit is whether certain city officials can be deposed by the plantiffs. The defendants won the first round of that battle earlier this year when a different U.S. magistrate ruled in their favor.

That decision was appealed to the trial judge who issued an order on Sept. 24 that allows for some questioning of some of those individuals.

The three attorneys for the defendants — Caine O’Rear III, Lisa Cooper and Katherine Bonnici of the Hand Arendall firm — filed a 10-page motion to reconsider that order six days later.

Unless the judge modifies his order, a number of council and commission members could be deposed prior to the Jan. 4 deadline, which would result in additional fees paid by the city for the presence of defense attorneys at those depositions, and for related costs.

Kingrea used a stack of legal bills from the past month to support his statements that the city needed to do something to rein in its legal fees. He also stated that one of those bills indicated the city was paying more to the Hand Arendall firm than the hourly rate recommended by the Alabama Municipal Insurance Corp. According to the AMIC Web site, cities use AMIC services to help “manage their liability, property and other insurance and loss-related obligations.”

Although Council President Debbie Quinn asked City Administrator Gregg Mims and City Attorney Marion “Tut” Wynne to meet to discuss the legal fees issue and report back to the council, the council took no formal action regarding the issue raised by Kingrea.