Press Clippings

County Paid $477,000 for Lawyers

By JEFF HORSEMAN Staff Writer

Faced with the threat of refunding tens of millions of dollars in impact fees, Anne Arundel County has paid a Baltimore law firm almost $500,000 to fight lawsuits filed by home buyers.

Despite having lawyers on staff at the Office of Law, a spokesman for County Executive Janet S. Owens and several councilmen defended hiring of Piper Rudnick Gray Cary in 2004, saying its expertise is needed when so much money is at stake.

"These are complex and complicated cases ... that require daily attention," said Matt Diehl, county spokesman. "Based on the claims of more than $40 million, this is money well spent on the citizens of Anne Arundel County."

Ms. Owens was unavailable for comment.

An attorney for the other side said the executive is wasting taxpayer money to avoid political embarrassment. "There's no other way to look at it," said John R. Greiber Jr.

Since 2001, Mr. Greiber and fellow lawyer Phillip F. Scheibe have launched three lawsuits against the county. Each lawsuit seeks a refund of impact fees, which are levied on developers and passed onto home buyers to mitigate the effects development will have on nearby roads and schools. The current fee for a detached single-family home is $4,617.

Mr. Greiber said as many as 40,000 homeowners could be eligible for a refund. He argued the main lawsuit filed in 2001 should extend to present-day home buyers, although a Circuit Court judge ruled only fees issued between 1988 and 1996 can be considered.

The county legally has six years to spend the funds or they must be repaid. The lawsuits contend their clients' money wasn't spent within that timeframe or was spent improperly. The county has denied any wrongdoing.

Any fee refunds would come not from taxpayers' pockets, but from a special $55 million fund, Mr. Greiber said. The exact amount of fees at stake is unclear. But a 2002 analysis by The Capital found $34 million in unspent impact fees, and Piper Rudnick attorney Kurt Fischer said that with interest, the figure could be more than $40 million.

The county Office of Law has a $2.6 million budget. But the county hired Piper Rudnick in September 2004 to fight the three impact fee suits. So far, the county has paid Piper Rudnick $477,423, Mr. Diehl said. The current county budget for outside lawyers was unavailable, Mr. Diehl said, because the money is drawn from various funds.

Councilmen Pamela G. Beidle, D-Linthicum, and Ron Dillon Jr., R-Pasadena, noted the money paid to Piper Rudnick represented 1 percent of what the county was being sued for.

"We don't want to give up those impact fees," Mrs. Beidle said.

"When you have such a large amount of money, it is appropriate to put resources into it to protect the county's position," Mr. Dillon said. While he had questions about the money paid to Piper Rudnick, Councilman Ed Middlebrooks, R-Severn, an attorney himself, said, "Clearly there's a lot of money at risk here, too."

David Bliden, executive director of the Maryland Association of Counties, echoed the councilmen and added it's not unusual for counties to hire outside counsel to take on important cases.

But Mr. Grieber said Piper Rudnick has not added anything new to the proceedings. The case could have been resolved a year ago, he said, but the county chose to appeal.

"Their position has not changed one bit," he said. "Piper Rudnick has just come in to obfuscate, delay and push the case beyond Janet Owens' term of office." Ms. Owens will leave office at the end of the year due to term limits. She is considering a run for Congress.

Mr. Fischer called Mr. Greiber's charges "completely untrue." "We've been brought on board to win the cases," he said.

Robert Schaeffer, chairman of the Anne Arundel Taxpayers Association, also criticized Piper Rudnick's hiring.

"The question the average taxpayer might have is, 'Why do we have an Office of Law?'" he said. "What we're dealing with is land use and if the Office of Law can't handle something pretty basic to county government, what point is there?"

The three lawsuits are all in different stages. The major case, brought in 2001 by Halle Development Corp. and two Severn Oaks couples, recently went before the Court of Special Appeals, which ruled the county was responsible for coming up with a list of homeowners eligible for refunds. The case will have a damages hearing May 8 in Circuit Court. A Circuit Court judge in 2003 ruled the county may have misspent $6.4 million in impact fees.

The other two cases - one filed on behalf of an Annapolis woman, the other on behalf of a Crofton senior community - are in the federal court system. One is under appeal while the Crofton lawsuit has been remanded to Circuit Court.

Copyright 2006 The Capital Newspaper