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Brooksville's legal firm seeks change in pay system in lawsuits against developers

BROOKSVILLE — The law firm that handles the city's legal matters wants to change the way it may be paid as it pursues a pair of ongoing big-ticket lawsuits.

The Hogan Law Firm wants to be paid on a contingency basis, rather than on a retainer and hourly rate, in order to go after issuers of more than $20 million in surety bonds to LandMar Developers and Hampton Ridge, the bankrupt developers of Southern Hills Plantation.

Under the proposal, the law firm would act as an independent contractor in the court cases against Travelers Casualty and Surety Company of America and Chubb Group Insurance Cos., which issued several performance bonds for infrastructure LandMar failed to complete.

The law firm will take a percentage of any proceeds won in the case, with the rest of the money going toward completion of the unfinished infrastructure.

Compensation fees, which are set by Florida statute, would allow the law firm to receive anywhere from 5 percent to 25 percent of any money recovered, depending on the amount.

If the city loses the case, however, the law firm would receive nothing from the city for its efforts.

The firm's contract with the city calls for a minimum of 75 hours per month, at $175 an hour, for a minimum of $13,125, and $185 an hour for additional work. The city's legal fees the last two years have totaled $239,157 and $222,720 — all but a few thousand dollars going to Hogan.

The City Council will be asked Monday to approve the proposal. The matter was tabled at the council's Nov. 15 meeting at the urging of outgoing council member Richard Lewis who wanted his replacement, Emory Pierce, to be brought up to speed on the case before any consideration is given.

The case stems from the 2008 bankruptcy filing by original Southern Hills developer LandMar Development, which left unfinished some infrastructure in the second and third phase of Southern Hills.

With a new developer ready to take over the subdivision, the council had hoped to collect the money from the surety companies to complete the infrastructure.

But according to Mayor Lara Bradburn, the city's case took a hit in August when the judge presiding over the case ruled that one of the bondholders for the project wasn't required to pay the millions the city says it's owed. That's why she favors allowing the legal battle to continue.

"There's a lot riding on this," said Bradburn. "This could be worth $20 million to us, but if we lose this suit we lose the ability to put valuable infrastructure in place in the future.''

The city does have a small victory to claim.

Last month, council members voted to accept a settlement with a bond company to allow a new developer of the Cascades at Southern Hills to complete the infrastructure left unfinished by developer Levitt & Sons.

The settlement calls for Bond Safeguard Insurance Co. to pay $251,191 toward completion of roads and sidewalks in Phase 1 of the subdivision, which is now owned by Tampa-based CaSHP Homes.

Logan Neill can be reached at (352) 848-1435 or lneill@sptimes.com.

Brooksville's legal firm seeks change in pay system in lawsuits against developers 12/02/10 [Last modified: Thursday, December 2, 2010 8:25pm]
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