I heard that the city had some unusual legal expenses in recent years.  What is that all about?

The Stanley City Council approved the Arnolds' subdivision and subsequently has approved over 20 building permits without litigation. Nevertheless, in addition to the three litigation actions in 2009 described below, Rebecca Arnold initiated new actions against the City of Stanley in late September 2012 and continues to do so.  The most recent action initiated in 2014.  The City is in the process of defending itself through legal counsel.  More information can be shared with the community once the legal process is complete.

One of Rebecca's actions in 2012 has been resolved.  On the evening of August 9, 2012, the city held a long meeting with a series of agenda items.  There was a public comment opportunity on an ordinance scheduled for 5:00 PM, a public comment opportunity on an application for a variance scheduled for 5:15 PM, a public comment opportunity for the proposed FY 13 budget scheduled for 5:30 PM and a regular council meeting scheduled for 6:00 PM.  Out of respect for those who attended the meeting, each agenda item was begun shortly after the previous agenda item was concluded.  This was to avoid extensive dead-time while just waiting on the clock.  The actual start times for each of the agenda items was 5:03 PM, 5:20 PM, 5:25 PM, and 5:29 PM.  Since the 5:25 and 5:29 agenda items were begun prior to the scheduled time, the mayor and the city council let anyone who subsequently entered the meeting room know that we were running ahead of schedule but would gladly drop back to a prior item on the agenda to make certain their comments or concerns were heard.  Rebecca did not attend the meeting but she sent a couple of e-mails which were read and considered by the council.  Nevertheless, on September 6, 2012, Rebecca filed litigation against the city claiming that she had been affected by the regular council meeting starting 29 minutes early.  Not surprisingly the judge found that Rebecca was "not an affected party" and the City's motion for summary judgment was granted.  The judge's ruling was on September 30, 2013, over a year later!  Unfortunately this again cost the city to defend itself.  Furthermore, Rebecca appealed the decision to the Idaho Supreme Court (Docket 41600) which not only could have cost Stanley even more money, it did cost all the taxpayers of the State of Idaho for litigation in the state's highest court.  Not surprisingly the Idaho Supreme Court affirmed the judgement of the Custer County District Court.  Thankfully the Supreme Court found that "their appeal was brought without a reasonable basis in fact or law" and ruled that "Costs and attorney fees are awarded to the City."  This will enable the City to recover some of the cost of this litigation which has been an aggravation from 2012 to February of 2015!

Previously the City of Stanley was the respondent in five actions between 2009 and the new actions in 2012; three initiated by Rebecca Arnold and two initiated by the Stanley High Country Inn owned by Steve Hosac.  All five of these matters have been resolved.


The City was forced to defend itself from the two litigants in these five cases.  It did not choose to be a party in these lawsuits, but could not ignore them when they were filed.  The City is obligated to defend itself, and on that score it has fared well: It has prevailed in three cases; one case was remanded for further proceedings; and the other was resolved prior to judgment.  No court has found the City liable for any wrongdoing.  Settlements always involve some kind of compromise, but it is untrue in any of these cases to say that the City spent money to defend itself against the litigant only to concede or grant what the litigant had asked for in the first place. No court found the City was liable for any wrongdoing.  Settlements always involve some kind of compromise, but it is untrue in any of these cases to say that the City spent money to defend itself against the litigant only to concede or grant what the litigant had asked for in the first place.


The following provides more specific information on the actions by the two litigants:  


Rebecca Arnold


First, in 2009, Rebecca Arnold filed a petition for judicial review of the City’s decision regarding a second renewal of one of her building permits.  After a fully public process at which Ms. Arnold and her lawyer were allowed to present testimony, the City Council decided that Ms. Arnold had not met the requirements of the ordinance and denied the application, but invited her to provide more information that might satisfy the requirements.  Ms. Arnold contended to the district court that the City was required to issue a written decision concerning the permit.  The City argued in response that the permit was not of the type that required a written decision, but, in an unprecedented ruling the district court determined that the building permit at issue did require a written decision.  The court did not determine that the City was wrong in its denial of the decision.  The court expressly refused to award attorney fees to Ms. Arnold or to the City, ruling that the determination as to whether attorney fees could be awarded must be reserved until the decision was final.  Thus, the City’s denial of the building permit was not overturned.  Rather, the court required any such decision to be in writing.  Undeterred by this denial, Ms. Arnold again asked the Court to award her fees and her request was again denied. 


            Meanwhile, Ms. Arnold filed a second petition for judicial review contending that the City had erred in granting Ms. Arnold’s building permits, but clarifying that the building permits did not include approval of “building envelopes,” something neither City code nor state code regulate.  Ms. Arnold had refused to pay for the record and transcript initially and ultimately her attorney did finally pay part of the costs, as it is the obligation of the person initiating the action.  As this case proceeded, Ms. Arnold’s attorney withdrew from the case, and she represented herself in the matter.  In the end she did not pay all of the costs for the transcripts and the City had to absorb the remainder of the costs.


            To comply with the court’s order, the City issued a written decision in the first case approving the second request for a permit renewal.  Since the first denial of her permit, Ms. Arnold had finally submitted the necessary information, good cause for a renewal was found, and the permit was approved.   Nevertheless, despite having gained approval of her permit, she again filed a third petition for judicial review.  This case was heard before the district court this spring and in an unusual move, the district court ruled at the end of the hearing.  The court ruled that Ms. Arnold had not raised a viable challenge to the City’s decision and dismissed her case.  The Court did not order Ms. Arnold to pay the City’s attorney fees unfortunately.  Until recently, a state statute allowed for the award of attorney fees to a prevailing party in a petition for judicial review if the losing party brought the action without a reasonable basis in fact or law.  But the state Supreme Court ruled that even prevailing parties in petitions for judicial review are not eligible for an award of attorney fees under that statute.  Only prevailing parties in “civil actions,” like a garden-variety lawsuit, are.


            After this ruling, the parties again began discussions in an attempt to resolve the matter.  Before the second case was heard by the court, the parties reached an agreement that accommodated the City’s need to act consistently with its ordinances while providing the landowner with certainty so she could develop her property consistent with City code.  The settlement agreement provided for the remainder of Ms. Arnold’s cases to be dismissed and did not involve any payment by the City to Ms. Arnold. 


Steve Hosac


Steve Hosac filed two actions against the City concerning the City’s imposition of a penalty for Mr. Hosac’s willful failure to pay option taxes to the City as required by ordinance.  The City sought to dismiss the first action as brought without merit, and the district court agreed and dismissed the matter.  Mr. Hosac filed another action against the City regarding the imposition of the penalty for failing to pay option taxes.  The City sought dismissal of this case, as well, and the court again ruled that the matter was without merit and so dismissed it.  Rather than continuing with further threatened challenges from Mr. Hosac, the City offered and ultimately reached a settlement.

How much has the city spent on legal expenses in recent years and what was it used for?

Legal expenses include routine activity related to questions of interpretation or development of changes to city ordinances, and representation of the city for prosecution of infractions of the law (DUI charge for example).  They also include non-routine, litigation related legal expenses.  The expenses have varied subatantially over the last 8 years, reaching a peak in 2010.  Click on the image above and to the right to see the amounts spent in recent years and what it was used for.  

Particularly aggravating are the chages for litigation initiated by specific individuals.  No one is more upset than your mayor and city council members about having to spend money on these expenses rather than on any number of projects and services that could have been of direct benefit to the community. 

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