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Hounsfield appealing court ruling on $160K attorney bill


The Hounsfield Town Council, which has accused a Watertown law firm of billing services and hourly rate increases without consent, unanimously decided Wednesday to appeal a January court ruling that ordered the town to pay a $160,615 legal bill.

State Supreme Court Judge James P. McClusky ruled in favor of Schwerzmann & Wise PC, which sued the town in January 2013 for services rendered from December 2009 to July 2012 related to litigation over the Galloo Island Wind Farm development. To preserve its rights, the town filed a notice of appeal against the ruling on Jan. 30 to the state Appellate Division, Fourth Department, at the Jefferson County clerk’s office.

Town officials allege Schwerzmann & Wise attorney Dennis G. Whelpley did not acquire written consent from the town and wind power developer Upstate NY Power that was needed to exceed $75,000 in legal fees that the developer agreed to reimburse. The developer paid the $75,000 in legal fees it agreed to for the project, but the court ruled the town is responsible for the $161,615 billed above that threshold by Mr. Whelpley.

The court concluded the town does not have the authority to challenge the $160,615 in legal bills, deciding it should have known bills from Mr. Whelpley had exceeded $75,000 and addressed the issue earlier, when it was obvious the developer no longer was going to provide reimbursement.

In February 2010, Henderson filed a legal challenge that contested the placement of a transmission line through the town. Schwerzmann & Wise defended Hounsfield in the action, which it won. That legal fight pushed the firm’s bills over the $75,000 that Upstate NY Power agreed to reimburse.

But town officials contend they were deliberately blindsided by Mr. Whelpley, who didn’t send any documentation of those bills until July 2012. Itemized monthly invoices from Mr. Whelpley stopped arriving during the litigation with Henderson, and officials assumed the attorney’s bills were being paid by Upstate NY Power.

Mr. Whelpley, in response, said it should have been clear to the town that his expenses were well above the $75,000 threshold the developer agreed to cover. That agreement was made between the town and the developer, he said, and the law firm was not involved.

He said an agreement was made with Hounsfield before litigation began in 2010 that legal services for the case would be billed in a “lump sum” payment, instead of monthly.

“I was waiting for the appeal to get decided so they would get a lump sum bill, and that was something specifically authorized by the town,” Mr. Whelpley said. “And they fail to point out they won every step of the way.”

In 2012, the town asked Mr. Whelpley to send a statement that included a full record of legal bills, Councilman Stephen H. Lee said.

“We received in the mail a large packet of bills he was owed, and we found out the rate he charges us per hour went up on three different occasions,” he said. “I just wish he would have come to us to say he hadn’t been paid in 90 days, instead of going on and on” billing services.

Documents from the town show that Mr. Whelpley’s hourly rate jumped from $210 in December 2008 to $300 in July 2011.

Hourly rate increases were described as “minimal” by Mr. Whelpley.

“We increase our rates periodically as the cost of business goes up, and we do it across the board,” he said. “They were minimal increases dealing with the costs of living and doing business that increase over time.”

The town has hired Rochester attorney Paul F. Shanahan to complete the appeal. His expenses for that process aren’t expected to exceed $20,000, town Supervisor Timothy W. Scee said. That amount will be added to the $9,400 the town already has paid Mr. Shanahan in legal fees.

“We believe the developer was responsible for the bills and have documentation to that effect,” said Mr. Scee, who has been supervisor four years. “Therefore we don’t feel we’re responsible. There are a lot of issues we feel are pertinent to the case that were just sort of glazed over.”

If the town does not win its appeal, Mr. Scee said, it would be compelled to finance the payment of the $160,615 by seeking a bond that would be paid back through debt service in the budget.

The developer’s application to build its 50.6-mile electrical transmission line, which would have linked with an existing transmission line in the Oswego County town of Mexico, failed in October 2011 when the New York Power Authority decided it would not approve a power-purchase agreement for the project.

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