Terry Vierra’s request in late 2014 that the San Lorenzo Valley Water District take on his conflict-of-interest case turned out to be a costly gamble – for him and for the district.
On Monday, April 3, in Superior Court in Santa Cruz, Gary Redenbacher, the lawyer for Bruce Holloway of Boulder Creek, filed papers in Superior Court in Santa Cruz asking the court to order payment of $101,583 in legal fees.
Monday night, the San Lorenzo Valley Water District, voted unanimously to leave payment of those fees, plus a $9,006 court judgment – not counting accumulating late fees, up to former water district director Vierra.
The district had paid for Vierra’s legal defense for two years, but Monday drew the line on paying for the consequences of its lawyers’ unsuccessful efforts – a judgment for the plaintiff.
In matter-of-fact language that contrasted sharply with her aggressive defense of Vierra a month ago, water board President Gene Ratcliffe said Monday:
“The district provided a defense for Terry Vierra. Now that a legal decision has been rendered and reaffirmed by the judge, the district’s obligation is complete.”
In a suit brought by Holloway, Superior Court John Gallagher had ruled in December against Vierra, saying he violated California conflict-of-interest statutes. Vierra, a Boulder Creek realtor and liquor store owner, had been the only remaining defendant in the case, which originally also had included the water district as a defendant.
Facing the prospect of soaring legal fees, growing public protests and dwindling chances of winning an appeal, the board on Monday dropped all financial support for Vierra as quickly as it had assumed what it called its “obligation” two years ago.
The board already has paid two teams of lawyers nearly $120,000 to represent Vierra, the legal fees through Feb. 9. An estimated $50,000 in February and March legal bills from the district’s lawyers – for an unsuccessful March attempt to convince Judge John Gallagher to reverse his own ruling – are headed to the district’s list of payables this and possibly next month.
The district had filed a Notice of Appeal in the case on March 21, which would have added another two years to its prior two years of legal bills for Vierra, and run up continuing plaintiff attorney fees.
Monday’s twin decisions to drop the appeal and to force Vierra to pay his own court judgments “spared” the district ratepayers at least three payments totaling more than $210,000 – up to $110,589 for Vierra’s court judgment, another estimated $60,000 in payments to district lawyers acting in Vierra’s behalf, plus another estimated $40,000 for plaintiff’s legal fees if the appeal is rejected.
Under California law, a winning plaintiff’s counsel is entitled to be compensated for “allthe hours reasonably spent” on the case.
Litigation attorneys say that theoretically, the court is supposed to award all of the claimed fees unless the other side can prove that a fee was somehow excessive or not earned. While courts have considerable discretion in awarding these fees, there is typically less discretion in public-interest litigation, such as the Vierra case.
The request by Redenbacher, a Scotts Valley attorney, that $101,583 be added to Vierra’s judgment will be heard by Gallagher, the trial judge, in court on May 17.
“This case was efficiently and effectively litigated in the face of a well-funded, all-out defense, to a very successful result,” Redenbacher said in Monday’s filing. “Plaintiff’s attorney is entitled to be fully compensated for that accomplishment.” He said he worked more than 180 hours on the Vierra case.
“Despite the district’s admission that this was a conflict of interest, that they knew about the conflict of interest, and that they receive regular training to prevent conflict of interest, they displayed no interest whatsoever in correcting or stopping their fellow board member from profiting from that conflict of interest,” he wrote.
“Under normal circumstances, a public agency that realizes it has entered into an illegal contract will bring an action themselves to set aside the contract or, at the least, maintain an air of neutrality while the prosecutor or private citizen litigates the action rather than make it appear that the agency was complicit in the conflict.”
“Instead of displaying even the most basic contrition at allowing this conflict, the district doubled down by providing a vigorous defense for Vierra,” Redenbacher wrote. “The extensive media attention generated by this lawsuit also shows that the public has more than a theoretical interest in assuring that local public officials not take actions that enrich themselves.”
