Lawyers, leaders clarify legal issue

By Andy Gates - Argus Observer
Sunday, August 26, 2007 2:08 AM PDT

ONTARIO - The city’s recent fumble regarding an effort to repeal a contentious tax ordinance may have resulted from a failure by city staff to specifically ask its Portland-based lawyers how to correctly repeal the mandate.

The city’s current attorney, Larry Sullivan, told the City Council Tuesday it did not really repeal an ordinance on May 21 for system development charges, even though city leaders thought they had accomplished that feat.

The city was forced to repeal its contentious SDC ordinance, after it was sued in September 2006 by two developers over its hurried implementation of the mandate last year.

The developers, Larry Tuttle and Jackson Fox, asserted the city denied them their rights and broke state laws by not providing public hearings and notice on the SDC matter. So the city settled its $25,000 lawsuit without admitting any liability by agreeing to pay Fox and Tuttle’s legal fees, refund SDC revenue and repeal SDC mandates.

Sullivan told the City Council the city’s problem evolved because it did not have a local attorney.

ADVERTISEMENT

“From my limited investigation into the matter, it appears to me that the problem arose because there was no local attorney advising the city, not because the city failed to consult with an attorney,” Sullivan said in an Aug. 15 memo to the City Council.

The city’s former local attorney from the law firm Yturri Rose LLP, Ontario, resigned from working with the city in April, Sullivan said in his memo, before the city made its May 21 mistake.

However, something Sullivan did not mention in his memo was Yturri Rose LLP had no involvement at all with the city’s litigation with Tuttle and Fox because the firm had a conflict of interest.

“We did not represent the City of Ontario in connection with any aspect of the litigation with Messrs. Fox and Tuttle. The same is true with respect to the settlement and implementation of the settlement agreement. Our firm was unable to assist either party with the litigation due to a conflict of interest. In other words, parties on both sides of the lawsuit were clients of the firm and ethical rules prohibited us from representing either side,” Bruno Jagelski, Yturri Rose LLP, said in a statement released by the local law firm Wednesday.

That fact was news to at least two new members of the City Council — Councilwoman Susann Mills and Mayor Joe Dominick — and to councilman Lewie Allen.

“No, I didn’t know about that. I knew they (Yturri Rose) didn’t do anything with the settlement, but I didn’t know there was a conflict of interest,” the mayor said Friday.

Mills agreed.

“If it was ever brought out, I don’t remember it being brought out,” the councilwoman said Friday. “I didn’t know there was a conflict, I cannot see why that was not brought out sooner.”

Allen also said he did not recall being made aware of Yturri Rose LLP’s conflict of interest. Ontario City Manager Scott Trainor, however, said the new council may not have been aware of the issue, but longer serving council leaders were told about it.

“I don’t think the new councilors would have been privy to the information regarding the conflict because the only time that it came up was at the beginning of the lawsuit, prior to any of their involvement ... But the existing councilors at that time were informed that Yturri Rose could not represent us in the Fox/Tuttle litigation because of a conflict of interest,” Trainor said Friday.

Ontario City Councilman Dan Cummings said he was told by city staff quickly after the lawsuit was filed about the Yturri Rose LLP conflict of interest situation.

The Yturri Rose LLP law firm was not consulted and did not advise the city regarding the repeal of the SDC ordinance, Jagelski said in the release.

“It is our understanding that the city retained counsel from outside the area after we declined to represent the city due to the conflict of interest,” Jagelski said in the release.

Attorneys from the city’s other legal counsel from Portland, Schroeder Law Offices, P.C., apparently did not advise the city on the correct procedure to follow to repeal the SDC ordinance.

“The firm (Schroeder Law Offices P.C.) was not asked to advise the city, and did not advise the city, as to the correct procedure to follow to repeal Ordinance 2583,” Sullivan’s memo shows.

Lawyers from Schroeder Law Offices P.C., assumed the city would be using Yturri Rose’s services to repeal the SDC ordinance because they still represented the city when it entered into the settlement agreement with Tuttle and Fox, according to Sullivan’s memo.

But Ontario City Recorder Tori Barnett told Sullivan she and lawyers from the Portland firm “did not discuss the mechanics of the repeal,” Sullivan’s memo shows.

So did the city ever consult with any attorney about the specific mechanics and procedure for repealing the SDC ordinance?

The answer to that question, Trainor said, was described in Sullivan’s memo.

“Since I wasn’t a part of the conversation between Tori (Barnett) and the attorney, I’m not sure I have anything of value to add,” Trainor said Friday.

Barnett could not be reached Friday for comment. The mistake also signaled a need for full-time legal counsel, Cummings said.

“Where we failed was trying to save money and not have an attorney on staff all the time. We’re not attorneys and staff is not attorneys. Hopefully we’ll have an attorney every time we do things like that. I hope the public understands none of these actions have been done trying to fool the public ... All are true, legitimate mistakes. We’re not trying to pull wool over everyone’s eyes,” Cummings said.

Cummings said he is ready for the whole issue of SDCs to be resolved, and he said he had not known the City Council made a procedural mistake at the time it attempted to repeal the SDC ordinance.

“Man, it’s getting old. I really, truly believe we’re on track again,” Cummings said. “I truly thought we were doing the right thing.”

Allen said the city is being “nit-picked,” which needs to stop.

“Quit the nit-picking,” Allen said. “I wonder why the paper and some new elected officials are trying to stir it up and nit-pick everything, since the election and before the election. I think it should be stopped, and let’s start helping the citizens of Ontario instead of nit-picking. That lawsuit was a farce, just to get someone elected.”

Last year, before the city was sued, Cummings expressed concern about the city not holding public hearings before it passed an SDC ordinance, and city staff were specifically directed by the City Council to talk to an attorney.

City staff reported back to the council, however, that they talked with their SDC consultant, who is not an attorney, and reviewed state laws themselves but determined a public hearing did not need to be held.

Before the lawsuit, Yturri Rose LLP told the city, notice and a public hearing were necessary before implementing an SDC ordinance.

“As recognized by the Argus, in a prior news article, before commencement of the lawsuit, our firm provided sound legal advice regarding the necessity of notice and public hearing before implementation of an ordinance imposing system development charges. The Ontario City Manager suggested the city received different advice from another law firm. Clarification as to what advice the city received, and from whom, would need to be provided by the city or its legal counsel. Yturri Rose is not privy to that information,” Jagelski said in his release.

Trainor provided clarification to Jagelski’s point Thursday.

“The city is very satisfied with the representation that the law firm of Yturri Rose has provided over the years. Specifically, with regard to the limited involvement that the firm had with the issue of system development charges, we have stated in the past and continue to state that we believe they provided us with sound legal advice,” Trainor said.

Trainor also said July 19, “Oftentimes, our local attorney will not have the depth of experience to deal with specific complex issues like an SDC. In these instances we will go to outside consultants or attorneys who specialize in those areas to give us advice.”