HomeMy WebLinkAboutKiesel Boucher Larson Legal services for transient occupancy taxesCIN OF FRESNO"
City Clerk's Office (Original)
LEGAL SERVICES AGREEMENT
1. Parties. This Legal Services Agreement ("Agreement") is made and
entered this 15a` day of February, 2008, by and among Kiesel Boucher Larson, LLP and
Baron & Budd, P.C. (collectively "Special Counsel") and the City of Fresno, a California
municipal corporation ("City").
2. Retention of Firms Rather Than Particular Attorney. City is retaining the
law firms, and attorney services to be provided to City will not necessarily be performed
by any particular attorney. It is anticipated, however, the services will be performed
principally by Paul R. Kiesel, with assistance from partners and associates working under
his direction.
3. Term. This Agreement, which is intended to fulfill the requirements of
California Business and Professions Code section 6147, will begin on the date indicated
above and will continue until the completion of the Litigation (defined below).
4. Scope. City hereby retains Special Counsel to represent it in
administrative proceedings, including administrative proceedings under City's transient
occupancy tax ordinances and other applicable ordinances of City, and litigation seeking
damages, attorneys' fees, costs, and all other appropriate relief for the non-payment or
underpayment to City of transient occupancy taxes by online booking companies such as
Hotels.com, Expedia.com, Travelocity and others. The Scope will also include all writ of
administrative mandamus proceedings in the Superior Court, defending cross-complaints
against City by online booking companies named as parties in the proceedings, as well as
all subsequent appeals (collectively, the "Litigation").
i. Prosecution of Litigation. As provided herein, Special Counsel is
authorized to take appropriate legal steps to prosecute the Litigation as it
pertains to liability, damages, civil penalties, injunctive relief, interest, and
restitution/disgorgement of profits and to participate in any settlement
negotiations. However, nothing in this Agreement shall authorize Special
Counsel to admit liability on behalf of City. Further, nothing in this
Agreement shall grant settlement authority to Special Counsel on behalf of
City except as otherwise set forth in paragraph 20.
ii. Disclosure of Relevant Facts. City will be truthful and cooperative with
Special Counsel, disclose to Special Counsel all facts relevant to the
Litigation, keep Special Counsel reasonably informed of developments,
and be reasonably available to attend any necessary meetings, depositions,
preparation sessions, hearings and trial.
iii. Monthly Status Reports. Special Counsel will disclose to City all facts
relevant to the Litigation, keep City informed of developments, provide
City written status reports regarding the Litigation on a monthly basis, and
promptly respond to City's inquiries and communications.
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iv. Authorized Representative of Client. City designates Shannon Chaffin,
Deputy City Attorney, as the authorized representative to direct Special
Counsel and to be the primary individual to communicate with Special
Counsel regarding the subject matter of Special Counsel's representation
of City under this Agreement. This designation is intended to establish a
clear line of authority and to minimize potential uncertainty, but not to
preclude communication between Special Counsel and other
representatives of City.
V. Prior Approval. Special Counsel will obtain prior approval from City
concerning all substantive matters related to the Litigation including
dispositive motions, selection of consultants and experts, and resolution of
the Litigation including settlement as outlined in paragraph 20. City
agrees to consult in good faith with Special Counsel prior to making a
recommendation regarding any such substantive matter, and agrees not to
unreasonably withhold approval of selection and retention of consultants
and experts.
5. Resources. Special Counsel and the City Attorney will provide sufficient
resources, including attorney time, to prosecute the Litigation faithfully and with due
diligence. Legal services under this Agreement will be performed only by competent
personnel under the supervision and in the employment of Special Counsel and City, or
retained by Special Counsel as consultants. To assist in the prosecution of the case, City
will provide sufficient resources to calculate damages and gather other necessary
information on the transient occupancy tax.
6. Conflicts. City may be joined in a class action. Therefore, City might be
representing its own interests in the Litigation and serve as representative of a class of
government entities seeking similar relief. City and Special Counsel acknowledge other
individual government entities may seek to become named parties in the Litigation and
be represented in the Litigation by Special Counsel. City recognizes there may be
potential conflicts or actual conflicts of interest if Special Counsel represents other cities
within the case. City understands it would be to its benefit for other parties to become
named parties as it may enhance the case and lower expenses for City. Accordingly, City
has conferred with the City Attorney and has determined it is in its own best interests to
waive any and all potential or actual conflicts of interest which may occur as a result of
Special Counsel representing other government entities in this or similar litigation. City
therefore waives all such potential or actual conflicts of interest.
7. Representation of Related Interests. Special Counsel shall have the right
to represent other individuals, business entities, municipalities, governmental agencies or
governmental subdivisions in other transient occupancy tax actions or similar litigation
without the consent of City, subject to the Rules of Professional Conduct relating to
conflicts of interest.
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8. Compensation. The employment of Special Counsel will be on a
contingency fee basis. Specifically, if Special Counsel is successful in obtaining and
collecting a recovery for City -- whether by settlement, arbitration award, Court judgment
or otherwise -- Special Counsel will receive attorneys' fees in the amount of Thirty
Percent (30 %) of the Gross Recovery (defined below). This fee is not set by law but is
negotiable between City and Special Counsel. The sole contingency upon which City
will pay compensation to Special Counsel is a recovery and collection on behalf of City,
whether by settlement, arbitration award, Court judgment or otherwise.
i. Order for Payment. City and Special Counsel intend to seek an order for
payment by defendants of City's attorneys' fees and Costs (as defined in
paragraph 10 below), if City prevails, in whole or in part, in the Litigation.
City agrees to use its best efforts to support any such application.
ii. Statutory Fee Award. If the amount of the statutory fee awarded as
reimbursement for Special Counsel's time and effort, and collected from
the defendants, exceeds the amount called for under the contingency fee
calculation, Special Counsel shall retain the statutory fee awarded and
collected as a reasonable fee in lieu of the contingency fee. If the amount
of the statutory fee awarded as reimbursement for Special Counsel's time
and effort, and collected from the defendants, is less than the amount
called for under the contingency fee calculation, Special Counsel shall
receive as a reasonable fee the amount called for under the contingency
fee calculation in lieu of the statutory fee.
9. Recovery for City. A recovery for City -- whether by settlement,
arbitration award, Court judgment or otherwise — shall be subject to the following:
i. Gross Recovery. The term "Gross Recovery" shall include, without
limitation, the present value of any monetary payments agreed or ordered
to be made and the fair market value of any property or services agreed or
ordered to be transferred or rendered for the benefit of City by the adverse
parties to the Litigation or their insurance carrier(s), whether by
settlement, arbitration award, court judgment, or otherwise, without
reduction for recovery of Costs as defined in paragraph 10. "Present
value" means value as of the time of the settlement, final arbitration
award, or final judgment if payments are to be received thereafter. Gross
Recovery shall also include any statutory attorneys' fees paid by the
defendants.
ii. In Kind Recovery. If payment of any part of the relief received by City
will be in the form of property or services ("In Kind"), the value of such
property and services for purposes of calculating the Gross Recovery shall
be calculated based on the present value, as of the time of the settlement,
the final arbitration award, or final Court judgment, of the In Kind relief to
be received thereafter. The attorneys' fees for the value of the In Kind
relief shall be paid out of any initial lump -sum payment by the defendants.
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If the initial lump -sum payment is insufficient to pay the attorneys' fees in
full, the balance will be paid from subsequent payments on the recovery
before any distribution to City.
a. Disagreement Valuation of In Kind Relief. If the parties disagree
with respect to the value of any In Kind relief, they will proceed as
follows: Within thirty (30) days each party will select an appraiser
qualified to conduct an appraisal of the value of the In Kind relief.
Each party's selected appraiser will thereafter meet and confer. If
resolution of the dispute is not reached within sixty (60) days of
the initial meet and confer, the appraisers will select a third
qualified appraiser within fifteen (15) days. The third appraiser's
valuation will be final and binding on the parties.
b. In Kind Relief Recovery Only. Notwithstanding the foregoing, if
there is no money recovery and City receives In Kind relief,
attorneys' fees will be based on the value of the In Kind relief,
which will be determined through the mutual agreement of the
parties. If the parties disagree with respect to the value of any In
Kind relief, they will proceed with an appraisal process as set forth
above. If there is no money recovery and only In Kind relief, all
attorneys' fees and Costs due Special Counsel under this
Agreement shall be paid from City funds at the time of recovery
and collection.
10. Costs. It will be necessary for Special Counsel to incur and advance
certain court costs and other types of expenses for City in connection with the Litigation.
These Costs and other expenses may include, but are not limited to, the following: filing
and service fees; costs for investigative services; travel expenses (including air fare,
ground transportation, vehicle mileage, lodging and meals); deposition expenses and
court reporter fees; outside trial services providers; trial equipment rental and operation
fees; preparation of exhibits and graphics; the costs of briefs and transcripts on appeal,
and miscellaneous copying, postage, shipping, and courier expenses. In addition, it will
be necessary to employ expert witnesses. City agrees that Special Counsel may, in its
discretion, employ and pay these expert witnesses, and that such expenditures shall be
included within Costs.
ii. Cost Reimbursement. City agrees to reimburse Special Counsel for all
reasonable Costs out of its share of the Gross Recovery, after the
attorneys' fee specified in paragraph 8 has been calculated and deducted.
ii. Division of Costs Among Joint Clients. City understands that Special
Counsel may incur certain expenses, including, for example, expenses for
travel, experts, and copying that jointly benefit multiple clients. City
agrees that Special Counsel may divide such expenses among such clients
on a reasonable basis, and deduct City's portion of those expenses from
City's share of any recovery. Special Counsel may, in its discretion,
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allocate the expenses equally among the relevant clients, pro rata based on
each client's share of the relief obtained, or on any other reasonable basis
of which all affected clients are fully informed.
iii. Retention and Payment of Outside Counsel. In some instances, it may
be necessary for Special Counsel to retain special outside counsel to assist
on matters other than prosecuting City's claims as described in paragraph
4 above. (Examples of such instances include the following: a defendant
may seek bankruptcy protection; a defendant may attempt to fraudulently
transfer some of its assets to avoid paying City's claim; a complex, multi-
party settlement may require an ethics opinion from outside counsel; or a
separate lawsuit may need to be filed against a defendant's insurance
company). City agrees that Special Counsel, with written permission of
City, may retain such special outside counsel to represent City when
Special Counsel deems such assistance to be reasonably necessary. In
such an instance, the fees of such special outside counsel shall be
advanced by Special Counsel, shall be deemed a part of Costs, and as such
shall be reimbursed to Special Counsel by City from its share of the Gross
Recovery. If there is no recovery, Special Counsel will be solely
responsible for payment of the Costs.
11. Reasonableness. City and Special Counsel have discussed the
reasonableness of the contingency fee provided for in this Agreement, as opposed to use
of an hourly rate, a fixed fee, quantum meruit, or some other possible basis for
calculating the attorneys' fees to be paid to Special Counsel. City and Special Counsel
agree that under all the circumstances a contingency fee is the most reasonable and
equitable way to compensate Special Counsel in light of the effort required and the risks
to be undertaken in the Litigation. City and Special Counsel further understand that the
substantial effort required to prosecute the action and the substantial Costs to be incurred
by Special Counsel may not be compensated for or reimbursed if there is no recovery.
Therefore, City agrees that it will not contest the reasonableness or fairness of this
contingency fee contract.
12. Potential Efforts by Defendants to Invalidate Agreement. City and Special
Counsel are aware that in the past defendants in litigation involving public entities have
challenged and sought to invalidate contingency fee arrangements between public entities
and outside counsel. City and Special Counsel believe that any such challenges to this
Agreement lack merit and that this contingency fee arrangement is valid and in the public
interest. The City Attorney agrees to join Special Counsel in opposing any such
challenge.
i. Invalidated Agreement and No Recovery. In the event that this
contingency fee Agreement is found to be invalid, Special Counsel agrees
to continue to represent City in the Litigation with the understanding that,
if there is no recovery, City will owe nothing for attorneys' fees or Costs.
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ii. Invalidated Agreement and Recovery. If there is a recovery awarded to
and collected by City, and this contingency fee Agreement is found to be
invalid, City shall pay a reasonable fee for the services rendered, plus
Costs. If the parties are unable to agree on the reasonable fee for the
services rendered, or for any other disputes arising under this agreement,
such disputes shall be determined by arbitration proceedings before the
Judicial Arbitration and Mediation Services (JAMS). In no event shall the
total reasonable fee for the services rendered and Costs exceed the
recovery received by City.
13. Division of Attorneys' Fees. Special Counsel may divide the attorneys'
fees received for the legal services provided under this Agreement with other attorneys or
law firms retained as associate counsel if approved by the City Attorney in writing. The
terms of the division, if any, will be disclosed to City. City is informed that, under the
Rules of Professional Conduct of the State Bar of California, such a division may be
made only with City's written consent after a full disclosure to City in writing that a
division of fees will be made and of the terms of such division. City will not
unreasonably withhold approval of associate counsel retained by Special Counsel or
unreasonably refuse to consent to a proposed division of fees among counsel.
14. Legal Services Specifically Excluded. Special Counsel does not agree to
provide any representation beyond that described in paragraph 4. In particular, City
agrees that Special Counsel has no obligation or responsibility to provide representation
in defending any legal action against City commenced by any person in connection with
claims brought against City related to the Litigation. If City wishes to retain Special
Counsel to provide any legal services not provided under this Agreement, a separate
written agreement between Special Counsel and City will be required, following
negotiation of and agreement on the additional compensation to be paid by City for that
representation.
15. Power of Attorney: City gives Special Counsel a power of attorney to
execute all reasonable and necessary documents connected with the handling of the
Litigation, including pleadings, contracts, checks or drafts, dismissals and orders, and all
other documents that City could properly execute. City's claims will not be settled
without obtaining City's consent as set forth in paragraph 20, and nothing in this
Agreement shall constitute a delegation of legislative authority by City.
16. Assignment. This Agreement may not be assigned by Special Counsel.
Special Counsel is expressly employed because of its unique skills, ability and experience
and, therefore, it is understood that no substitution or assignment may be made unless the
City Attorney expressly approves such substitution or assignment in writing.
17. Attorneys' Lien. Special Counsel will have a lien to the fullest extent of
California law for attorneys' fees and Costs on all claims and causes of action that are the
subject of its representation of City under this Agreement and on all proceeds of any
recovery collected (whether by settlement, arbitration award, Court judgment, or
otherwise).
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18. Withdrawal of Attomey. Special Counsel may withdraw as permitted
under the Rules of Professional Conduct of the State Bar of California. The
circumstances under which the Rules permit such withdrawal include, but are not limited
to, the following: (a) City consents, (b) City's conduct renders it unreasonably difficult
for Special Counsel to cavy out the employment effectively, or (c) City fails to pay
attorneys' fees or Costs as required by this Agreement. If Special Counsel properly
withdraws from representing City because it is required to do so by the Rules of
Professional Conduct, City agrees to compensate Special Counsel for the reasonable
value of the legal services provided, plus reimbursement for Costs. In such a situation,
both attorneys' fees and reimbursement of Costs will be paid by City to Special Counsel
at the time of recovery and collection by City; provided, however, City is only obligated
to compensate Special Counsel if there is a recovery and collection of the recovery.
Special Counsel shall provide not less than sixty (60) days prior written notice of
termination, with said notice to specify the effective date of termination.
19. Discharge of Special Counsel. City may discharge Special Counsel at any
time, with or without cause. If City discharges Special Counsel, City agrees to
compensate Special Counsel for the reasonable value of the legal services provided plus
reimbursement for Costs. Both payment of attorneys' fees and reimbursement of Costs
will be paid by City to Special Counsel at the time of discharge.
20. Settlement. Special Counsel will not settle City's claims without the
approval of City. Any settlement offers from the online booking companies or
settlements reached in principle must be approved by the City Council before Special
Counsel is authorized to enter into any settlement agreement. City has the absolute right
to accept or reject any settlement. Nothing in this Agreement shall preclude Special
Counsel from seeking prior authority from the City Counsel before any settlement
negotiations. Special Counsel will notify City promptly of the terms of any settlement
offer received by Special Counsel.
21. Confidentiality. This Agreement establishes the relation of attorney-client
among the parties hereto. This Agreement is an attorney-client communication and shall
not be disclosed by Special Counsel to a third party. Special Counsel is to hold all money
and property of City in trust for City's benefit, is not to divulge its confidences, and is
entitled to the candid cooperation of City employees in all matters related to the
Litigation.
22. Release of City's Papers and Property. At the termination of services
under this Agreement, Special Counsel will promptly release to City on request all of
City's papers and property. City's "paper and property" includes correspondence,
deposition transcripts, exhibits, expert's reports, legal documents, physical evidence, and
other items reasonably necessary to City's representation, whether City has paid for them
or not.
23. Independent Contractor. The relationship of City to Special Counsel, and
any associate counsel or paralegal provided through Special Counsel, in the performance
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of services hereunder is that of independent contractor and not that of employee of City,
and no other wording of this Agreement shall stand in derogation of this paragraph. The
fees and expenses paid to Special Counsel hereunder shall be deemed revenues of Special
Counsel's law office(s) and not as a remuneration for individual employment apart from
the business of Special Counsel's law office(s).
24. Political Activities. Special Counsel will, during the term of this
Agreement, refrain from endorsing for office or representing any elected official City
except for acts performed in the course of such person's official duty.
25. Notices. All written notice and communication to City relating to this
Agreement shall be mailed or personally delivered to City at the address set forth on the
signature page of this Agreement. Monthly status reports may be included as an
attachment to an email addressed to Shannon.Chaffin@fresno.gov. City may designate
any other mail, email or delivery address by written notice to Special Counsel.
26. Disclaimer of Guarantee. Although Special Counsel may offer an opinion
about possible results regarding the subject matter of this Agreement, Special Counsel
cannot guarantee any particular result. City acknowledges that Special Counsel has made
no promises about the outcome and that any opinion offered by Special Counsel in the
future will not constitute a guarantee.
27. Execution. This Agreement is executed in duplicate copies, and three
copies signed by Special Counsel and City are being provided to City at the time of
execution.
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28. Entire Agreement. This Agreement fully expresses all understandings of
the parties concerning all matters related to their agreement for specialized legal services,
and this Agreement constitutes the entire agreement and understanding between City and
Special Counsel for the services to be performed.
29. Severability. If any provision of this Agreement is held in whole or in part
to be unenforceable for any reason, the remainder of that provision and of the entire
Agreement will be severable and remain in effect.
30. Modification by Subsequent Agreement. This Agreement may be
modified by subsequent agreement of the parties only by an instrument in writing signed
by both of them or an oral agreement to the extent the parties cant' it out.
31. Arbitration of Fee Dispute. If a dispute arises between Special Counsel
and City regarding attorney's fees under this Agreement and Special Counsel files suit in
any court other than small claims court, City will have the right to stay that suit by timely
electing to arbitrate the dispute to be determined by arbitration proceedings before the
Judicial Arbitration and Mediation Services (JAMS), in which event Special Counsel
must submit the matter to such arbitration.
32. Attorney's Fees and Costs in Action on Agreement. The prevailing party
in any action or proceeding to enforce any provision of this Agreement will be awarded
reasonable attorney's fees and costs incurred in that action or proceeding or in its efforts
to negotiate the matter.
IN WITNESS WHEREOF, the parties have executed this Agreement at Fresno,
California, the day and year fust above written.
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City of Fresno,
a California municipal corporation
By: 1 .0
KAren 11radley, Interim Controller
Department of Finance
ATTEST:
Rebecca E. Klisch
City Clerk
SPECIAL COUNSEL
Kiesel Boucher Larson LLP
By. Ira/z
Paul R. Kiesel, Esq.
Baron & Budd, P.C.
By: �rn�/ �u,ti �7��5�0 8 By:
Deputy -
APPROVED AS TO FORM:
James C. Sanch
City Attonoey/j//j
Deputy
Addresses: l
City:
City of Fresno
City Attorney's Office
Attention: Shannon Chaffin,
Deputy City Attorney
2600 Fresno Street
Fresno, CA 93721-3602
Phone: (559) 621-7500
Fax: (559) 488-1084
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Russell Budd, Esq.
Addresses:
Special Counsel:
Kiesel Boucher Larson
Attention: Paul R. Kiesel
8648 Wilshire Blvd.
Beverly Hills, CA 90211
Phone: (310)854-4444
Fax: (310) 854-0812