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Pasco must pay legal fees, court says

An appeals court decision could tack another $1-million onto the $600,000 Mad Hatter Utilities won in a lawsuit against the county.

It was the most expensive lawsuit Pasco County had lost to date: $1.8-million to be paid to Mad Hatter Utilities for encroaching on its service territory.

Even though a federal judge reduced that amount by about two-thirds last year, a recent appellate court ruling still could stick the county with a bill topping $1.6-million. That would include the reduced judgment and what Mad Hatter attorneys have requested in fees.

Pasco County commissioners learned Tuesday of the July 19 appellate court decision, which upheld an earlier decision by Judge Thomas B. McCoun in favor of Mad Hatter. At the urging of interim County Attorney Robert Sumner, county commissioners will schedule a closed-door session with outside counsel Marion Hale to discuss a settlement of Mad Hatter's attorneys fees.

"I want this board to be involved," Sumner said.

"We're talking about an awful lot of money."

Mad Hatter attorneys argued at trial that Pasco, in essence, tried to drive the private utility out of business in order to take over its lucrative wastewater treatment business.

The utility also said the county improperly provided utility services to developers in its service areas, especially when it agreed to connect Denham Oaks Elementary School to the county's water and wastewater system.

Jurors agreed and in 1996 awarded the utility $1.8-million. McCoun later reduced that amount to about $600,000 but gave Mad Hatter jurisdiction to serve the school and the Oak Groves subdivision, said Mad Hatter attorney Bill Moore. Moore's firm handled Mad Hatter's appeals, not the original trial.

Both the county and Mad Hatter appealed various parts of the ruling and all appeals were denied, Moore said. The result: Pasco will have to pay the $600,000 plus attorneys fees, assuming there are no more appeals.

The lion's share will go to the trial attorneys, including Lutz lawyer Gerald Buhr.

"They've asked for $1-million in attorneys fees," said Hale, the county's attorney in the case, of Mad Hatter's trial attorneys. Hale said the billing was redundant in places and she doubted if the court will grant the full amount. She added that Mad Hatter, not the county, got the ball rolling on the appeal and thus might not qualify for those attorneys fees.

"The fat lady hasn't sung yet."

Moore said his firm has not yet calculated its fees.

Hale said she already had filed a motion for the entire appellate court to rehear the matter, a procedure known as rehearing en banc. Regular appeals are heard by a three-judge panel, and a majority of district appellate judges must agree before a case can be reheard.

Problems between Mad Hatter and the county date back to 1991, when treated wastewater from percolation ponds at a Mad Hatter sewage facility in Land O'Lakes overflowed, sending treated wastewater into the surrounding neighborhood. Mad Hatter entered into an agreement with the county, allowing it to treat some of the wastewater.

Mad Hatter, the county said, delayed making the connection to the county's system, leaving the bacteria-filled water in the residential streets. The two utilities eventually entered into a permanent agreement, but Mad Hatter later accused the county of trying to curtail its growth.

_ Information from Times files was used in this report.

A years-long struggle

The federal lawsuit leading to the $1.6-million-plus bill potentially facing Pasco County today was filed in 1994 by Mad Hatter Utilities president Larry DeLucenay. The suit sought $3-million in damages and accused the county of, among other charges, conspiracy, breach of contract and violating DeLucenay's right to due process. "It was the county's true and unlawful objective to drive Mad Hatter out of business," the lawsuit said, "in order that the county could take over and itself provide exclusive utility services within Mad Hatter's growth service area."

Source: Times files

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