Today, Judge Ford ruled (07-L-109) that the County's contract for the Farnsworth group called for binding arbitration and threw out the County's attempt to move this battle into the court system. I talked with State's Attorney Julia Rietz and she dismissed the importance of the ruling. But there is little doubt that the County has invested substantial resources and time into the effort to push this into the courts.
To review: In August 2006, Julia Rietz hired one of her campaign contributors, Joe Phebus, to handle the County's litigation against PKD, Farnsworth, and Otto Baum for defects in the construction of the Nursing Home. There is little doubt that Phebus is one of the premier litigators in Champaign County so while I had my qualms about the hire, I generally felt that it was sound. Unfortunately, my confidence dwindled over time.
First, Phebus came up with a settlement about $100,000 for PKD in December 2006. As PKD had the responsibility to oversee the project and notify the County of problems, the settlement seemed generous. The County Board approved the settlement.
Then Phebus filed a lawsuit in May 2007 asking for $5 million in damages from Farnsworth. Virtually no one believed that the contract called for anything other than binding arbitration, but if Phebus read it different, so be it.
Following that lawsuit filing, I learned about a big loophole in the Phebus legal contract that would allow Julia Rietz to adjust his fee based on certain arbitrary criteria.
And throughout all of this, we still don't know how much Phebus has billed us for this work. We presume, since he is supposedly working on an hourly fee, that he's tracking his hours. But he has still not provided the County Board with any accounting of those hours. 18 months after beginning the work on this, we have no idea if we currently owe Phebus, $10,000, $100,000 or $1,000,000. And even today, Julia Rietz dismissed the importance of knowing that.
Now, we have lost a court case that probably never should have been filed at substantial expense to the County. Plus, we've lost valuable time. Three years after the discovery of mold and two years after the discovery of HVAC problems, the County has recovered less than 5% of their costs for these problems.
Without the help of a single attorney, the County probably could have recovered $1 million between these two cases. Instead, three years later, we have no settlement, no settlement on the horizon, and hundreds of thousands in known legal expenses, and probably hundreds of thousands in anticipated legal expenses. Now the County is going to be faced with bringing their case before a construction arbitrator; exactly what they were hoping to avoid.