How much are lawsuits costing Dewey Beach?

by Michael Short on September 12, 2010

By Michael Short

The question of how much money Dewey Beach is spending on lawsuits has been an ongoing concern.

Dewey Beach and Dewey Beach Enterprises have been at odds over the development of the Ruddertowne property. Those disputes have led to four lawsuits, on-again, off-again settlement talks and headlines for months.

It’s also become a prominent backdrop to Dewey Beach’s town election, which will be held on Saturday, Sept. 25.

Various numbers have been bandied about, but town officials tried to answer the questions during Saturday’s town commissioner’s meeting.

Some have worried that Dewey Beach is on the verge of financial ruin if it doesn’t settle with DBE. Others have downplayed the cost and said the town has no choice but to defend itself.

Litigation costs was an item on Saturday’s agenda. Commissioner Marc Appelbaum, in his last meeting as a commissioner, said that Dewey Beach has spent approximately $130,000 to defend itself in the DBE litigation cases.

That number, he said, is for an approximately 15-month period from  January, 2008 to March, 2009. Other funds have been spend on other litigation, such as Jimmy’s Grille, but the approximately $130,000 is for DBE related cases.

Mayor Rick Solloway agreed, putting the actual figure at about $131,700.  However, he said after the meeting that the figure rises to approximately  $173,997 if costs since March, 2009 are added in.

That figure is approximately the current cost that Dewey Beach has paid in DBE related litigation, he said.  Solloway said the town’s former insurance carrier has paid approximately $317,000 in DBE related costs.

Figures of a million dollars or more have been bandied about as controversy over the proposed Ruddertowne development plans continues.

The  cost figures do not include any potential settlement costs and do not include non-litigation legal expenses or costs related to other legal cases, Solloway said. He said the town has spent approximately $367,000 in the last three years on non-litigation legal expenses.

The topic proved very lively during Saturday’s commissioner’s meeting. Commissioner Marty Seitz said the town’s financial turnaround, when it erased a $700,000 deficit, has given the town the ability to spend money on litigation if needed.

Anna Lecates said that the town once spent $200,000 in consulting fees for a comprehensive plan that was not adopted.  “Those numbers (for litigation) aren’t as bad as they sound.”

“Our town is solvent at a time when many others are not because of the economy,” said Commissioner Diane Hanson.

Some urged settlement with one speaker saying mediation would be a lot less costly to pursue.

“We can all get along if we just take some time and do some negotiation,” said Rose Lucas.

But at least two people raised the specter of financial ruin for Dewey Beach if it does not settle the court cases. Commissioner “Zeke” Przygocki read a statement saying “town bankruptcy is a definite possibility.”

He said Dewey Beach needs to “wake up” and that both sides need to negotiate with “reasonable expectations” by both sides.

He called bankruptcy “a very plausible scenario.”

That prompted Commissioner Marc Appelbaum to ask “is that all?”

“Do you want more?” replied Przygocki.

“I didn’t know when you were going to start with the facts,” Appelbaum said.

“I started with the facts . . .” said Przygocki.

Commissioner Diane Hanson replied “talk about  fear mongering.”

Former Dewey Beach Commissioner Claire Walsh also had a letter read that worried that Dewey Beach could go bankrupt unless the town is willing to negotiate a settlement with DBE.

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