The Clinton Herald, Clinton, Iowa

Local News

July 10, 2013

City, law firm enter into contingency agreement to cover EMS lawsuit work

CLINTON — The city has spent more than $660,000 in the legal malpractice lawsuit stemming from the EMS billing case and has altered the way some of its attorneys will be paid.  

On Tuesday, members of the Clinton City Council approved a contingency contract with Chicago law firm Hannafan and Hannafan, one of two firms representing the city in the case. The other firm is Gosma, Tarbox and Associates out of Davenport, which will continue to be retained for the lawsuit.   

The contract will alter the way Hannafan and Hannafan is paid from an hourly rate to a contingency. Rather than be paid their hourly rate, Hannafan and Hannafan would receive 25 percent of what the city receives through a trial or settlement. If the verdict in the suit was not in the city’s favor, Hannafan would receive nothing.  

With the trial not scheduled until Sept. 30, City Attorney Jeff Farwell explained the contingency fee contract will be a better financial deal for the city.  

“Recently, given some of the city’s financial issues, I went back and asked them if they would be willing to convert it to a contingency fee arrangement,” Farwell said.

The firm will still be paid for travel expenses and other case-related expenses such as court reporters.  

The city filed suit last March against its former attorneys, Hopkins & Huebner, P.C., claiming that the firm negligently failed to properly and adequately analyze a 2010 Emergency Medical Services billing case.

As a result of this alleged negligence, the city in 2010 entered into a settlement agreement with the U.S. Department of Justice and whistleblower Timothy Schultheis that will require the city to pay $4.5 million over the course of 10 years. The city also paid more than $160,000 in legal fees leading up to the settlement. The lawsuit seeks $3 million in damages.

According to city finance documents, the legal malpractice suit has cost the city $663,536 since the firms were hired last year. To date, the city has paid Hannafan and Hannafan $506,779; Gosma, Tarbox and Associates $87,024; expert witness and whistleblower consultant Ronald Clark $59,463; and Herring Reporting Services $10,270

Ed O’Neill during the public comment section of the meeting pointed out that the city made payments to Hannafan and Hannafan in 2011 and March 2012 before the council officially hired them to represent the city in the legal malpractice suit on March 6, 2012.  

Those payments were for $7,500 on March 15, 2011, $4,538 n Sept. 6, 2011 and $25,000 on March 5, 2012.  

When asked after the council meeting, Farwell said Hannafan did an investigation into the legal malpractice suit before the city officially hired the firm. However, he could not comment on whether those specific payments were related to the investigation.

At-large Councilman John Rowland cast the dissenting vote against the contingency contract.


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