Citizen argues for return of $75,000 attorney tab after suing Chattanooga, Hamilton County

Citizen argues for return of $75,000 attorney tab after suing Chattanooga, Hamilton County

September 4th, 2014 by Ellis Smith in Business Around the Region

Helen Burns Sharp

Photo by Contributed Photo/Times Free Press.

A citizen who successfully sued the city of Chattanooga and Hamilton County could see the return of more than $75,000 in attorneys' fees after proving to Chancellor Frank Brown that a Chattanooga board secretly approved $9 million in taxpayer support for a residential-golf course development.

Attorneys argued on Wednesday before Chancellor Pam Fleenor, who replaced the recently retired Brown, whether the city should have known that its actions were in clear violation of the law, or whether Brown's ruling represented a novel new approach to the Open Meetings Act.

John Konvalinka, an attorney representing retired city planner Helen Burns Sharp, said Sharp should be reimbursed for expenses she incurred in challenging what Brown ruled was an improper action by the city Industrial Development Board.

"We submit that this taxpayer (Sharp), who has undertaken to do this on behalf of the taxpayers of Hamilton County, should be reimbursed at a minimum her discretionary costs," he said.

Konvalinka was sharply critical of the actions of former city attorney Mike McMahan, who has acted as both a witness and as an advocate for the city, and who also has been fingered as the one who approved the $9 million in taxpayer financing for Black Creek Mountain developers without a public meeting of the Industrial Development Board, as required by law.

McMahan's alleged violation of Sunshine Laws while city attorney isn't the only legal question about the Industrial Development Board that has drawn scrutiny. In another revelation by Sharp, it emerged this week that Chris Ramsey, an IDB member who has served since 2002, isn't a resident of Chattanooga as required by law. As attorney for the IDB until succeeded by Wade Hinton, it was McMahan's job to ensure that the volunteer board followed the law.

"We've had one common denominator with regards to most of this, and unfortunately, it is Mr. McMahan," Konvalinka said. "I am sometimes unable to ascertain when he is acting as an advocate and when he's acting as a witness."

McMahan, who on Wednesday acted as an advocate for the Industrial Development Board, argued against reimbursing Sharp's attorney fees for several reasons:

Since the case is on appeal, Fleenor's chancery courtroom is the improper venue to argue the matter in the first place, he said.

Failing that, the admitted violation only ran afoul of the Open Meetings Act, which does not allow plaintiffs to recoup attorneys fees, not the Open Records Act, which allows plaintiffs to be reimbursed, he said.

And in any case, Brown's order was a unique interpretation of the Open Meetings Act, since at one point the former chancellor suggested that there should have been a meeting in order to approve the tax increment financing plan for Aetna Mountain. But one was never made public.

"There's no testimony that there was a quote secret meeting," said McMahan, who is now retired from practicing law. "Citing circumstantial evidence, [Brown] said there should have been a meeting."

But McMahan is splitting hairs, Konvalinka said.

In a recording obtained by Konvalinka, McMahan allegedly admitted that he "made a mistake" in consulting privately with members of the IDB before approving the $9 million tax increment financing plan, which Konvalinka said constitutes a de facto secret meeting.

And in a public meeting at which the IDB upheld their earlier decision that had been voided by Brown, Miller & Martin attorney Alfred Smith, an ally of McMahan's, revealed that McMahan had acted alone to approve the plan to use taxpayer funds to finance the new road to a private development.

"Mr. McMahan in private, in violation of the sunshine law, consulted with members of the IDB and he made a determination," Konvalinka said.

Fleenor said she was taking the arguments under advisement, and would render an opinion after further reading the case notes.

Brown's decision against the city IDB has already been elevated to an appeals court. Meanwhile, work continues by Black Creek Mountain's developers on the $9 million road, which will eventually scale Aetna Mountain if completed.

Contact staff writer Ellis Smith at 423-757-6315 or esmith@timesfreepress.com.