HomeMy WebLinkAbout2001-05-17 - Agendas - FinaluJcrx/roe P2
FAYETTEVI LLE
• 7HE CITY OF FAYETTEVILLE. ARKANSAS
•
DEPARTMENTAL CORRESPONDENCE
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To:
From:
Date:
Re:
Policemen's Pension and Relief Fund Board of Trustees
Fayetteville City Clerk's Office
May 17, 2001
Hicks, et al. v. City of Fayetteville attorney fees.
On May 17, 2001 a Joint Special Meeting of the Policemen's and Firemen's Pension and
Relief Fund Boards was called. This was an informational meeting for the purpose ofKit Williams,
City Attorney to inform the Boards of the court's order in the above referenced matter.
An emergency meeting of the board has been called for Monday, May 21, 2001, at 1:30
p.m., Room 326. The court has filed a order in the above referenced case. The order states the
amount the City of Fayetteville is to pay in attorney fees said amount will come from the Policemen's
Pension and Relief Fund and the Firemen's Pension and Relief Fund. A quorum of your board is
needed to take out the police fund share of the total amount. The city attomey will be present.
cbp
cc: John Maguire
Steve Davis
Kit Williams
Boards and Commissions .
April 16, 2001
POLICEMEN'S PENSION AND RELIEF FUND BOARD OF TRUSTEES
Chairman
Mayor Dan Coody
1418 E. Rodgers Drive
Fayetteville, AR 72701
H)443-6758 W)575-8330
01/01/01 to indef.
Treasurer
Heather Woodruff
P.O. Box 293
Fayetteville, AR 72702
H)575-9320 W)575-8323
02/17/98 to indef.
Randy Bradley
16951 Dripping Springs Road
West Fork, AR 72774
11)761-3515 W)444-1739
Second term
07/17/97 to 04/30/01
Jerry Friend
1640 Stewart
Fayetteville, AR 72703
H)443 9337 W)444-1742
Second term
05/01/96 to 04/30/02
Dr. James Mashburn
236 Oakwood Ave.
Fayetteville,AR 72703
442-8225
Second term
07/17/97 to 04/30/01
38
Eldon Roberts
Rt. 10
Fayetteville, AR 72701
521-8050
Second term
07/17/97 to 04/30/01
Hollis' Spencer
P.O. Box 267
Fayetteville, AR 72702
H)443 3044 W)444-1807
First term
05/01/96 to 04/30/02
•
Boards and Commissions
April 16,2001
FIREMEN'S PENSION AND RELIEF FUND BOARD OF TRUSTEES
John.Dill
HCR 63 Box 179 ,
Ozark, AR 72949
H)667-4566
First term/Replaced Bill Morris
05/01/99 to 04/30/01
Pete Reagan
1015 Lake Sequoyah Drive
Fayetteville, AR 72701
H)521 -7542,.W)718-7622
Sixth term/Replaced Darrell Judy
05/11/96 to 04/30/02
Ron Wood
Rt. 5 Box 256
Fayetteville, AR 72701
• H)442-5925 W)718-7619 Ce11)601-1580
Fourth term
07/27/95 to 04/30/01
Danny Farrar
2805 Brookshire
Spnngdale,, AR 72762.
H)927-0336 W)575-8271 (mall)
First Tenn/Replaced Pete Reagan .
11/30/00 to 04/30/02
18
Asst. Fire Chief Marion Doss
1125 Cato Springs Road
Fayetteville, AR 72701
H)521-8898 W)575-8365
Replaced Mickey Jackson
05/31/91 to Indef.
City Clerk Heather Woodruff
P.O. Box 293
Fayetteville, AR 72702
H)444-7338 W)575-8323
Replaced Traci Smith
02/17/98 to Indef.
Mayor Dan Coody
1418 E. Rodgers Drive
Fayetteville, AR 72701
11)443-6758 W)575-8330.
Replaced Fred Hanna
01/01/01 to Indef.
Official Re uesting Meetin
Purpose
in7!/
Location grog. 3
Meeting Date OS—/7-0(/,
MEDIA/PUBLIC NOTIFICATION CHECKLIST
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Northwest Arkansas Times
Fax 442-1714
Phone 442-1700 x-191
Matt Wagner/Don Michael
Morning News
Fax 444-7289
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Charles Alison
Arkansas Democrat Gazette
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News Release
City of Fayetteville
May 16, 2001 Contact: John Maguire, Admin. Svs. Director
575-8330
There will be an emergency joint meeting of the Policemen's and the Firemen's
Pension and Relief Fund Boards of Trustees on Thursday, May 17, 2001 at 11:00
a.m. in Room 326 of the City Administration Building. The purpose of the
meeting is to discuss payment of the attorney's fees in the property tax lawsuit.
•
FAYETTEVILLE
113 W. Mountain St.
Phone: (501) 575-8323
To:
(9"I" CaY > IMIfM
City of Fayetteville
CITY CLERK'S OFFICE
Fax Cover Sheet
06.0-)5 Ak (fl -
Fayetteville, AR 72701
Fax #: (501) 718-7695
Company.
Fax IP
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on, Yt4J (ca ( t
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Number of Pages (including cover sheet).
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If transmission cannot be read clearly, please call back as soon as possible.
Thank you.
•
•
News.Re.le-ase
City of Fayetteville
May 16, 2001 Contact: John Maguire, Admin. Svs. Director
575-8330
There will be an emergency joint meeting of the Policemen's and the Firemen's
Pension and Relief Fund Boards of Trustees on Thursday, May 1.7, 2001 at 11:00
a.m. In Room 326 of the City Administration Building. Thepurpose of the
meeting is to discuss payment of the attorney's fees in the property tax lawsuit.
IN THE CIRCUIT COURT OF WASHINGTON COUNTY, ARKANSAS
JEANNE M. HICKS, et al
vs. CONSOLIDATED NO. CIV 97-500
and NO. CIV 98-1403
THE CITY OF FAYETTEVILLE, et al
ORDER
APPROVING SETTLEMENT FOR
CITY OF FAYETTEVILLE
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PLAIIsi�- IFFS
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DEFENDAINTS c`-')
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On the 5`d day of September, 2000, comes on to be heard the joint presentation and
request of Plaintiff Class Representatives, Jeanne Hicks and Tammy Lewis for themselves
and all other taxpayers similarly situated, who have paid real and personal _property taxes in
City of Fayetteville, and the Defendant City of Fayetteville, for the Court to grant final
approval of the Stipulation of Settlement ("Settlement") and the petitioner Class appearing by
and through their attorneys, Marshall Dale Evans and E Kent Hirsch, and for City of
Fayetteville appears Jerry Rose, Fayetteville City Attorney, and the remaining defendants
being noticed through this Courts' Order dated August 9th, 2000 setting the date and time of
said hearing and providing them the opportunity to .be present and be heard. The parties to
the Settlement desire to terminate all complex and protracted litigation between such parties
regarding the issues of millage rollbacks, damages, attorney fees and refunds of monies
found to be exacted on the terms and conditions set forth in the Settlement filed with the
Court and preliminarily approved by order of this Court dated .August 9th, .2000 and filed
August 15th, 2000.
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The Court now having considered the file of this case maintained by the Washington
County Circuit Clerk, as well as the decision of this Court rendered on November 29, 1999.
arguments submitted by counsel and no objections to the settlement of taxpayers refund and
rollback of millage or any other term of the settlement except for attorneys' fees from any of
the parties or Class members hereto after due notice to each of them and after ample time and
opportunity to respond or object; the only objections were to the attorney's fee request.
which were filed with the Circuit Clerk and which will be addressed by the Court
commencing on September 6i°, 2000 which is the date set by the Court to consider any and
all other settlement issues together with arguments submitted by counsel, all statements and
submissions by interested persons appearing at the final approval hearing; and having no
other filed objections to the settlements of the refund and rollback on or before August 31n,
2000, the court mandated cutoff date as set forth in the order of this Court dated August 9th,
2000, and the Court being fully advised in the premises; the Court makes the following
findings and orders in final approval of the Stipulation of Settlement and the entry of this
order.
1. NOTICE OF SETTLEMENT:
The consolidated civil action, Hicks, et al. v. City of Fayetteville, et al., CIV 97-500,
(hereinafter Hicks I) was certified as a Class Action pursuant to Rule 23 of the Arkansas
Rules of Civil Procedure by order of this Court dated February 12, 1998.
The case of Hicks, et al. v. City of Fayetteville, et al., CIV 98-1403, (hereinafter Hicks
II) was initiated as an illegal exaction case and sought relief for illegal exactions allegedly
occurring during any tax years after 1997.
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This Court stayed any action in Hicks I1 pending the resolution of Hicks I. The
Plaintiffs and City of Fayeneville have agreed to settle, resolve and compromise their several
claims and disputes raised by the pleadings of Hicks I and Hicks 11 on the terms and
conditions set forth in the Stipulation of Settlement which has been previously approved and
filed of record in this cause.
Even though Hicks II has not been certified as a class action. the recent decisions of
the Arkansas Supreme Court suggest that an illegal exaction case brought pursuant to Ark.
Const. art. XVI § 13 needs not be certified as a class but that such cases should when
practical follow Rule 23 of the Arkansas Rules of Civil Procedure. As the parties have
proposed, the Court finds that the notice given as provided in the Stipulation of Settlement is
in accordance with state law, ARCP Rule 23, and due process.
Hicks I was certified as a class action on behalf of all taxpayers in City of Fayetteville
and the other taxing units who are defendants herein, by this Court's Order of February 12th,
1998 and notice was sent to all members of this Class as approved and Ordered by the Court.
This case had a trial on liability in May and June of 1999 and it was set for trial on damages
for September 6th, 2000. The Court was advised a settlement had been reached and the
Court's Order of August 9th, 2000, preliminarily approved the Settlement and set a final
approval hearing for September 5th, 2000. A Notice of Settlement was presented to the Court
and the Court in its exercise of discretion found that notice by publication was the best notice
practicable under the circumstances after two conference calls concerning such notice and
after all parties to this action had had an opportunity to participate in the process determining
the Notice and all objections raised were satisfied, the Court determined the notice satisfies
the requirements of Rule 23 of the Arkansas Rules of Civil Procedure and due process. The
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Court in approving the notice Was particularly mindful of the. fact that all taxpayers of
\Vashington County had received the original notice of the class action and therefore the
Court ordered that the Notice of Settlement should be published twice in the. Legal Notices
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Section of the Morning News of Northwest Arkansas and the Northwest Arkansas Times
advising the Class that the Court would consider the Stipulation of Settlement and determine
whether it should be approved and the members of the Class could file their objections to the
settlement and appear and be heard at the hearing set to consider the settlement on September
5th, 2000. The Notice of publication advised Class members of the terms of the settlement,
the amount of the refund, rollback, and that Class counsel will request 33 1/3% of the
refund amount as attorney's fees.
At the final approval hearing held on September 5th, 2000, City of Fayetteville and
Plaintiffs' counsel presented undisputed evidence that the Notice of Settlement had been
published in the Legal Notices Section of the Morning News of Northwest Arkansas on
August 11'x, 2000 and August 18th, 2000 and the Northwest Arkansas Times on August 11th,
2000 and August 18th, 2000. Both proofs of publication were filed in the official court file on
September 5th, 2000. This Court has approved the Notice to the Class as published and
determines it to have constituted due and sufficient notice of the Hearing set for September
5i°, 2000.
2. OBJECTIONS TO SETTLEMENT.
By the Court's order of August 9th 2000 the Court ordered that August 31', 2000, be
set as the cut=off date by which any and all objections to the Settlement must be filed with the
Washington County Circuit Clerk, and further that only members of the Class filing an
objection with the clerk on or before August 31S', 2000, would be heard.
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At the final approval hearing held on September 5t. 2000, the Court was duly
informed that no objections to the rollback or refund or any other term of the settlement
except for attorneys' fees from any person to the Settlement or member of the Class had been
filed with the Washington County Circuit Clerk on or before August 315', 2000. There were
three thousand thirty-one (3031) objections to the attorneys' fees filed. Further, at the Court's
final approval hearing_ held on September 5 , 2000, the Court received evidence and was
available to any person in attendance to make .his or her objection. No person or party
including the intervenors came forward with any objection at the final approvalhearing to the
refund or rollback of the settlement, or any other term of the settlement except the attorneys'
fees issue which had been reset for September 6'h, 2000, after bearing all the evidence the
Court approved the settlement.
3. STANDARDS OF REVIEW OF SETTLEMENT
The authority to approve a settlement of a class action is entrusted to the sound dis-
cretion of the trial court. That the Court has recognized this action as one arising under the
Arkansas Constitution Article 16 Section 13 as an illegal exaction suit and as such is a
constitutional class action. Frank v. Barker,341 Ark. 557, 20 S.W.3d 293 (2000); Carson v.
Weiss, 333 Ark. 561, 972 S.W.2d 933 (1998). Since few Arkansas cases exist where the
parties have settled the cause and appellate review occurred, it is reasonable for this Court to
review federal law for guidance in determining whether the settlement is in the best interest
of the Class. Such cases include: Miller v. Woodmoor Corp., 619 F.2d 65 (10th Cir. 1980);
American Employers Insurance Co. v. King Resources Co., 556 F.2d 471 (10t Cir. 1977),
and the cases cited therein; Grunin v. International House of Pancakes, 513 F.2d 114, at 123
(8h Cir. 1975), quoting a Third Circuit decision in stating:
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"Such a [settlement] deteintination is committed to the sound discretion of the
trial judge. Great weight is accorded his views because he is exposed to the
litigants. and their strategies, positions and proofs.. He is aware of the'expense
and possible legal bars to success. Simply stated, he is on the firing line and
can evaluate the action accordingly."
The United States District Court for the District of Colorado described the rule for
reviewing settlements in the case of In Re King Resources Co. Securities Litigation, 420
F.Supp. 610 (D. Col. 1976), at page 625.
Within judicial discretion, the well-settled rule is that a settlement
should be approved if it is fair, reasonable and adequate. (Citations omitted).
In assessing the fairness, reasonableness and adequacy of a proposed
settlement, the Court should "compare the terms of the compromise with the
likely rewards of litigation." (Citations omitted). This comparison requires
consideration of two main elements. First, although the Court need not, and
should not, decide the merits of the controversy, it should consider the exis-
tence of serious questions of law and factwhich place the ultimate outcome of
the litigation in doubt. (Citations omitted).
Second, the Court should consider the vagaries of litigation and com-
pare the significance of immediate recovery by way of the compromise to the
mere possibility of relief in the future, after protracted and expensive litiga-
tion. In this respect, "it had been held proper to take the bird in the hand
instead of a prospective flock in the bush." (Citations omitted).
In applying the above test to a proposed settlement, the Court should
also consider the judgment of counsel and the presence of good faith bargain-
ing between the contending parties. (Citations omitted).
In American Employers Insurance Co. v. King Resources Co., 556 F.2d 471 (10th Cir.
1977), the Tenth Circuit Court of Appeals noted ten factors, seven of which are favorably
relevant to this litigation, in considering the Settlement Agreementin the case at bar to be
fair, reasonable and adequate, 556 F.2d 471, at pages 475 and 478:
(2) The prospect of complex and protracted litigation if the settlement
is not approved. In Re Four Seasons Securities Litigation, 58 F.R.D. 19
(W.D. Okla. 1972).
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(3) The proportion of the Class members who do not object or who
affirmatively support the proposed settlement. Cannon v. Texas Gulf Sulphur
Co., 55 F.R.D. 308 (S.D.N.Y. 1972).
(4) The competency and experience of counsel who support the set-
tlement. Percodaniv. Riker -Mason Corp., 50 F.R.D. 473 (S.D.N.Y. :1970).
(6) The relative benefits to be received by individuals or groups within
the Class, Norman v. McKee, supra;
(8) The current and projected financial condition of KRC in reorgani-
zation (in the instant case, UDLP and John Sanders) [in the Hicks litigation
the ability and financial condition of the taxing units to pay the settlement
amount].... Fox v. Glickman, supra;
(10) The extent to which the settlement is truly the product of "arms
length" bargaining and not of fraud or collusion. Young v. Katz, 447 F.2d 431
(5`h Cir. 1971).
In the Seifer v. Topay's International, Inc.,70 F.R.D. 622 D. Kan. 1976) the Court
stated 70 F.R.D. 622, at 626-627:
[We] next consider the proposed settlements in light of the requirement set
forth in Rule 23(e) of the Federal Rules of Civil Procedure. In evaluating the
terms of the settlement agreements we are mindful of the rule that we are not
to substitute our own business judgment for that of counsel, absent evidence
of fraud or over reaching, which is completely absent on the record before us
(Citations omitted). Instead, we are to exercise our discretion in a reasonable
manner with frill realization that approval of a settlement should be given if
the settlement is fair, reasonable and adequate. These terms, of course, are
general, and cannot be measured scientifically. In Re Four Seasons Securities
Litigation, Opinion No. 2, M.D.L. No. 55, 58 F.R.D. 19 (W.D. Okla. 1972).
The Court has discretionary authority to approve compromises. Protective Committee
v. Anderson, 390 U.S. 414, 88 S.Ct. 1157, 20 L.Ed.2d 1 (1958), rehearing denied, 391 U.S.
909, 88 S.Ct. 1649, 20 L.Ed. 2d 425 (1968); Case v. Los Angeles Lumber Co., 308 U.S. 106,
60 S.Ct. 1, 84 Lid. 110 (1939), rehearing denied, 308 U.S. 637, 60 S.Ct. 258, 84 L.Ed. 629
(1939); Grunin v. International House of Pancakes, 5.13 F.2d 114 (8th Cir. 1975), cert.
denied, 423 U.S. 864, 96 S.Ct. 124, 46 L.Ed.2d 93 (1975); Elliott v. Sperry Rand Corp., 680
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F.2d 1225, 1227 (8th Cir. 1982); In re: Flight Transp. Corp. Securities Litigation, 730 F.2d
1128, 1135 (8t Cir. 1984).
4. THE STIPULATION IS FAIR, REASONABLE AND ADEQUATE.
On November 29, 1999, this Court delivered its opinion finding that Washington
County had indeed engaged in a countywide reappraisalsubject to Amendment 59 to the
Arkansas Constitution. That further this Court found that each taxing unit sued as a
defendant was subject to the provision of that Amendment. Therefore, City of Fayetteville
was subject and upon the stipulation filed herein, this Court found that City of Fayetteville
had not rolled back the millage rate according to law as required by that Amendment for .the
year 1997 following the reappraisal that occurred in Washington County in 1994 through
1997. Further, due to the reappraisal increase in real property, values were put on the tax
rolls for City of Fayetteville and the defendant taxing units comprising said County for the
years 1994, 1995, 1996 and 1997 without a rollback as required by the Arkansas law.
The parties agree and the Court concurs that the general rule is that funds which have
been acquired through an illegal exaction and create a common fund or common benefit to
the Class on whose benefit the action is brought are to be returned pro rata to the various
taxpayers who initially paid them after a reasonable portion of the illegally exacted monies
are awarded and apportioned to attorneys of record in the meritorious litigation. See common
fund and benefit cases, Lake View Sch. Dist. Na 25 v. Huckabee, 340 Ark. 481, 10 S.W.3d
892, (2000); Millsap v. Lane, 288 Ark. 439, 706 S.W.2d 378 (1986); Powell v. Henry, 267
Ark. 484, 592 S.W.2d 107 (1980) See also, U.S. Supreme Court recognition of common fund
awards of attorneys fees. Boeing Co. v. Van Gemert, 444 U.S. 472 (1980), Sprague v. Ticonic
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National Bank, 307 U.S. 161, (1939). See Ark. Const. XIV § 13 and ARK. CODE ANN. §26-
35-902(a).
There is always the potential that should the Settlement not be approved the parties
would appeal any order of this Court and as such the litigation would continue. The
continued litigation of these matters and their attendant delays and costs is a motivation to
the Settlement and the Senlement represents the desire of these parties to end the litigation in
as far as it relates to them.
These parties and their counsel even though they possess differing years of experience
all have demonstrated professional competence, and as officers of the Court, have
represented to the Court that all settlement negotiations were conducted and the settlement
was reached in a manner which was at absolutely arms length and not in any way collusive.
No evidence to the contrary was presented at the hearing on September 5th, 2000. Further,
this Court is satisfied that counsel for both parties have conducted substantial discovery and
have done extensive review of applicable law regarding the Plaintiffs' claims and the
Defendant's defenses. Both parties to this settlement have demonstrated that they fully
recognize the time and expense necessary to continue this case through the damages stage of
the trial and possible appeals that might result.
This Court has overseen the pleadings, motions, evidence, and arguments of counsel
presented in a 4 -day trial on the merits conceming the defendants' liability under this suit.
The Court notes the vigorous and aggressive activity on behalf of both sides of this
controversy, and the Court is satisfied if settlement was not reached the litigation would
surely continue.
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This Court heard evidence from Mr. Andrew Breuer, CPA retired, of the rollback
benefits obtained from the settlement for the Class, and the total of the refunds being
presented to this Court by the settlement that will be administered for the benefit of the ..
taxpayers Class and which will now come under the direction and jurisdiction of this Court
due to the approval of this settlement.
The Court is aware that the settling party, City of Fayetteville, is a governmental
taxing unit and as such will be able to pay the settlement refund sum contained in the
settlement agreement.
This Court, having presided over this litigation since November 23 1998 and having
become well acquainted with the issues contained in this case involving interpretation and
compliance with Amendment 59 to the Arkansas Constitution, is of the judgment that due to
thehighly complex and difficult issues developed in this case this Court concludes there are
real risks to both parties to this settlement of continuing the litigation insofar as the outcome
could be adversely decided to either side by an appellate court.
It is for all of the foregoing reasons that:
THE COURT SO FINDS THAT, City of Fayetteville has specifically approved the
Settlement Agreement by resolution of their City Counsel, Resolution No. 113-00 on August
1, 2000. The Stipulation of Settlement was filed for record in this matter on 5th day of
September, 2000. The Plaintiffs as Class Representatives and the attomeys who represent the
Class have agreed to settle these issues and claims pursuant to the terms and provisions of the
Settlement Agreement after taking into account the substantial benefits that the Class has
received as a result of the prosecution of this action and will receive as a result of the
Settlement Agreement, the attendant risks of continued litigation, the likelihood of protracted
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proceedings and substantial costs and delays. The attorneys for the Class and the attorney for
City of Fayetteville have conducted a thorough study and investigation of the facts and law
relating to these issues. Such study revealed serious disputed and unique questions of law
remaining on the amount of refund damages that might be awarded and the outcome of an
appeal should one be had. The Plaintiff Class Representatives, Jeanne Hicks and Tammy
Lewis, and the attorneys who represent the Class are of the opinion that the settlement
provided for in the Settlement Agreement and this Order is fair, reasonable, and adequate as
far as it concerns City of Fayetteville and the Class, and' is in the best interests of the Class.
On balance, the Settlement Agreement provides a compromise and settlement which in the
Court's opinion, is fair, reasonable, and adequate under all of the circumstances between
these parties. The Court hereby approves the settlement of the Class action as set forth in the
Stipulation as being in all respects fair, reasonable and adequate, and hereby directs that the
settlement of the class action be consummated in accordance with its terms and conditions.
5. SPECIAL MASTER.
The Court's Preliminary Order of August 9th, 2000, appointed Sidney H. McCollum
of Bentonville, Arkansas as a Master and directed him to supervise the refund process,
resolve refund disputes and make a final report. The parties agree the money to be refunded
shall be refunded in accordance with the Stipulation of Settlement agreed to among the
settling parties
6. ORDERS.
NOW, THEREFORE, IT IS ORDERED, that the Notice of Settlement as approved in
this Court's Order of August 9th, 2000 was determined by the Court to be the best notice
practicable under the circumstances and after a phone conference call with the attorneys for
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the parties on July 20; 2000. The notice was approved by all counsel involved. A phone
conference was conducted and on August 2"d, 2000 the notice as modified -and re -approved
by the Court was published and directed to all members of the Class as specified by this
Court, without any other objections to the content or manner of said Notice of Settlement, the
Notice as duly and timely given.
IT IS FURTHER ORDERED, that the taxpayers be given the opportunity to receive a
pro rata refund of all Illegally exacted property taxes paid up to the sum of the settlement
amount of $213,469.50 as set forth in the settlement agreement and City of Fayetteville is
hereby ordered to pa
damages on a claims made basis as a result of this
settlement and it shall -be :the Judgment of this Court that said sum shall be paid to the Class
members claiming their refund in the suni' so claimed according to the terms of the
Stipulation. of Settlement less the award of attorney fees and costs set forth by this Court after
a fairness hearing on attomey's fees to beheld at a later time and the cost of administration
of the refund through the refund claims process shall be bome by the City of Fayetteville as
set forth in the Stipulation of Settlement, all for which the Court shall retain and continue to
exercise its jurisdiction.
IT IS FURTHER ORDERED, that said settlement amount shall come exclusively
within the control and jurisdiction of this court for the actual distribution of the refunds to
the claiming Class members, and the rollback which is detailed in the Stipulation of.
Settlement shall also be carried out under the supervision of the Court, all over which the
Court retains continuing jurisdiction and direction until the refund process and rollback•are
completed.
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IT 1S FURTHER ORDERED, that the Court finds that the settlement effects a •
rollback of the millage rate from 1:00 to 0.80 until changed by appropriate legal action. This
Court hereby approves the plan of allocation of the refunds and rollback of the millage rates
contained in the Stipulation of Settlement.
IT IS FURTHER ORDERED, that all disputes as to taxpayer refunds, shall be
resolved by the Master, unless a violation of law is asserted by the aggrieved party and then
the dispute will be resolved by the Court with full consideration being given to the Master's
determinations and recommendations to the Court.
IT IS FURTHER ORDERED, that Sidney H. McCollum, as Master, shall make any
and all necessary or appropriate decisions and take necessary or appropriate action in order to
discharge and perform his duties, responsibilities and functions on a day-to-day basis without
further order of this Court.
IT IS FURTHER ORDERED, that Sidney H. McCollum, as Master, shall be compen-
sated in such amount as will be later determined by the Court and such compensation shall be
paid proportionately by the City of Fayetteville with the other settling defendants at a rate of
not to exceed $.150.00 per hour.
IT IS FURTHER ORDERED, that all illegally exacted property taxes which remain
after all efforts specified in the settlement agreement are utilized to get a claim form to each
member of the Class in a timely manner have been used, and after such efforts have been
made to refund such monies are approved by this Court and after the final report of the
Master, shall become the property of City of Fayetteville according to the Stipulation of
Settlement.
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IT IS FURTHER ORDERED, that except for any specified rights granted to the Class
by any further order of this Court, any claims, demands, and causes of action of the Class,
and each and every member thereof, of any kind or nature in connection -with directly or
indirectly any subject matter decided in this litigation or in connection with directly or
indirectly, are forever acquitted, discharged and released as between the Plaintiff Class, by
and through. its Representatives, and.City of Fayetteville.
IT IS FURTHER ORDERED, that the Court shall retain jurisdiction as is appropriate
for a class action to administer the refund claims. process, the award of attorneys fees and
associated costs, the final approval of the cost of administration of the refund claims,
determine whether defendants have fully complied with the Stipulations of Settlement thus
entitling them to a return of unclaimed refund monies, and any taxpayer claims and rights
and certain other events that may occur not set forth in this Order, and all other claims not yet
decided.
IT IS FURTHER ORDERED, this Court has carefully considered all of the matters
presented at the Hearing and all of the provisions of the Stipulation, the plan of allocation of
the refund and as such the compromise and settlement as set forth in the Stipulation of
Settlement filed September 5th, 2000 is hereby approved and the provisionsthereof are.
hereby adopted by reference as Order of this Court.
IT IS FURTHER ORDERED, the claim form contained in the Stipulation of
Settlement as Exhibit "B" is approved. Defendant Washington County shall cause the
claim form to be mailed to all persons who can be identified through reasonable effort as
members of the Class. Such mailing shall be completed on or before October 2, 2000.
14
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IT IS FURTHER ORDERED, any member of the Class who wishes to share in the •
proceeds of the settlement of the class action must submit a claim form in person at the
Washington County Courthouse (with an exception made for persons who are disabled or
live outside of Washington County, any such persons may claim thew refund by mailing
their claims form to a designee or to George B. Morton whose address is listed on the
claim form with a written statement certifying that they are disabled or live outside of the
County) between October 2 and November 30. Any member of the Class who fails to
submit a claim form between those dates will be barred from sharing in the proceeds of this
Settlement under the class action, but will be bound by this Final Judgment.
IT IS FURTHER ORDERED, Proof of mailing the claim forms shall be filed with
the Court on or before October 15,'2000 with a statement of the steps taken to deliver the
claim forms to all members of the Class.
IT IS FURTHER ORDERED, notwithstanding the acceptance of and approval of this
Stipulation of Settlement the Court hereby resets the consideration of the appropriate award
of attorneys' fees from the common fund produced as a result of this proceeding and
common benefit conferred on the Class by this proceeding and judgment of damages and
the Court retains jurisdiction over said fund for the express purpose of determining the
adequate and reasonable compensation of the Plaintiffs' attorneys pursuant to the pendency
of the plaintiffs' attorneys' petition for attomeys fees and costs.
IT ]S FURTHER ORDERED, the hearing for determining the amount of fees and
costs shall commence on September 6th, 2000.
IT IS FURTHER ORDERED, to the extent appropriate, the findings of fact herein
shall be deemed to be conclusions of law, and the conclusions of law shall be deemed to be
15
findings of fact.
IT IS, THEREFORE, CONSIDERED, ORDERED, AND THE JUDGMENT OF
THIS COURT, that this Order shall constitute a final judgment in accordance with the
statements, findings, directions and orders of the Court set forth herein as to the Plaintiff
Class and City of Fayetteville only.
IT IS SO ORDERED, this �3' "day of /49.G/1. , 2001.
Marshall Dale ' vans
Attomey for aintiff Class
E Kent
Attomey for Plaintiff Class
.�.fL
Kit Williams
Attorney for City. of Fayetteville
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Attorney .o- Intervenors
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16
S-1-/1"a;;;ZL
Honorable Paul Danielson
Circuit Judge on Assignment
IN THE CIRCUIT COURT OF WASHINGTON COUNTY, ARKANSAS
JEANNE M. HICKS, ET AL
VS. CONSOLIDATED NO. C1V 1997-500
CITY OF FAYETTEVILLE, ET AL
WILLIAM JACKSON BUTT, II and
BUTT N BUCK HARDWOOD PLANTATION, LC
PLAINTIFFS
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DEFENDANTS_
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INTERVENORS
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
FOR AWARD OF ATTORNEY'S FEES
On September 6, September 29, October 30, October 31, November 2,
November 3, November 16 and November 17, 2000, came on for hearing the fourteen
separate Petitions for the Award of Attorney's Fees and Class Costs of Counsel for the
Plaintiff Class with the named representatives and the certified plaintiff class appearing
by and through their attorneys, Dale Evans, E Kent Hirsch, and David Nixon; the
Intervenors William Jackson Butt, I1 and Butt -N -Buck Hardwood Plantation, LC
appearing by and through their attorneys, Woody Bassett, Tim Brooks, Howard Brill, and
Peter: Estes; and the class counsel appearing by and through their attorney, Timothy Davis
Fox, and from the pleadings filed herein, argument of counsel, the testimony of the
witnesses, the evidence introduced, and all other things and matters properly before the
Court, the Court doth issue the following findings of fact and conclusions of law pursuant
to Rule 52 of the Arkansas Rules of Civil Procedure, as follows:
FINDINGS OF FACT
1. This proceeding is a consolidated case arising from five illegal exaction
2001 12766
actions filed in April, 1997.
2. The class representatives and Class Counsel were certified in this action in
February of 1998 in accordance with Rule 23 of the Arkansas Rules of Civil Procedure.
3. Approximately 1,400 taxpayers opted out of the class in accordance with
the class certification notice.
4: William Jackson Butt, I1 and Butt N Buck Hardwood Plantation, LC,
intervened on the issue of attorney's fees.
5. After four days of trial on the liability issues an order was entered finding
in favor of the certified plaintiff class on November 29, 1999.
6. Subsequent to the issuance of such order all fourteen defendant taxing
entities entered into proposed Settlement Agreements with the certified class
representatives.
7. While each of the fourteen Settlement Agreements contain many similar
provisions all of the Settlement Agreements are different with respect to certain terms
and conditions.
8. There were approximately thirty-one depositions taken prior to the
execution of the Settlement Agreements.
9. All of the fourteen Settlement Agreements provide for a Settlement
Amount to be made available for refund to the plaintiff taxpayers having paid real and
personal property taxes to the defendant taxing entities for the period of time for the tax
years from 1994 through 1999 and for the payment of costs and attorney's fees.
10. All of the Settlement Agreements, except for the Farmington School
District Settlement Agreement, contain a provision requiring a millage rollback.
2001 12767
11. All of time Settlement Agreements contain a provision that the issue of
attorney's fees and costs would be submitted to the Court for determination and that the
defendant taxing entities will not object to rcqucstcd fees and costs up to 33 1/3% of the
Settlement Amount set forth in each Settlement Agreement.
12. Class Counsel filed fourteen separate petitions for the award of attorney's
fees and costs with respect to each of the fourteen proposed Settlement Agreements.
13. Notice of a fairness hearing to consider the Settlement Agreements and for
objections to the requested attomey's fees and costs was published in accordance with
court order.
14. William Jackson Butt,11, together with a number of other attorneys, filed
an Entry of Appearance on behalf of approximately 3,100 taxpayers objecting to the
requested attorney's fees and costs.
15. Other than the objections to the requested attorney's fees, no objcctions to
the settlements were filed.
16. A fairness hearing to consider the fourteen separate Settlement Agreements
between the plaintiff class and the defendant taxing entities was conducted on Tuesday,
September 5, 2000. At the conclusion of such fairness hearing the Court approved all of
the Settlement Agreements. No member of the plaintiff class appeared at the Tuesday,
September 5, 2000 fairness hearing to object to the settlements.
17." The hearings on objections to attorney's fees continued for eight days, being
September 6, September 29, October 30, October 31, November 2, November 3,
November 16, and November 17, 2000.
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2001 12768
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18. There were forty-four witnesses presented and forty-seven exhibits
introduced at such hearings.
19. Two of the named representatives, Tammy Lewis and Riehard Mayes,
testified in support of the work of Class Counsel in this litigation in favor of the award of
attorney's fccs and costs of 33 1/3% of Sell of the Settlement Amounts set forth in the
fourteen Settlement Agreements.
20. Three other members of the plaintiff taxpayer class testified in favor of the
requested 33 1/3% fees.
21: William Jackson Butt, II and nine other members of the plaintiff taxpayer
class testified against the requested attorney's fees and costs.
22. Subsequent to the approval of the fourteen Settlement Agreements at the
annual school elections in September, 2000, the voters voted to increase all of the school
district millages to the pre -settlement millage level. Accordingly, although the illegal
portion of the millage was rolled back under the Settlement. Agreements the tax levy for
the plaintiff taxpayers paying taxes to the defendant school districts will be the same
amount for the tax year 2000 taxes as it was for the tax year 1999 taxes.
23. Subsequent to the execution of the Settlement Agreement , the City of
Prairie Grove also voted to increase the property tax millage to the pre -settlement level.
Accordingly, although the illegal portion of the millage was rolled back under the
Settlement Agreement the tax levy for the plaintiff taxpayers paying taxes to the
defendant City of Prairie Grove will be the same amount for the tax year 2000 taxes as it
was for the tax year 1999 taxes.
4
2001 12769
24. The City of Elkins, the City of Fayetteville, and the City of Springdale left
the levy of 2000 real and personal property taxes at the settlement millage rollback level.
Washington County increased its millage by approximately one-half of the settlement
millage rollback level.
25. Over 20, 000 claims for refunds were filed during the refunding
procedure, such claims representing over59;00'0 [parcels of property.
26. The amount to be refunded is over $5,500,000.00.
27. For the period of time through October 13, 2000 Class Counsel expended
approximately 6,337 hours of attorney time in the prosecution of this action on behalf of
the plaintiff class. Such attorney time does not include the time spent associated with the
proceedings to determine a reasonable fee and costs under the fourteen Settlement
Agreements.
28. Class Counsel have expended or will expend approximately $150,000.00
for costs advanced in connection with the prosecution of this action on behalf of the
plaintiff class.
29. Class Counsel have expended additional time and costs on behalf of the
plaintiff class since October 13, 2000.and may continue to expend attorney time and costs
through the completion of the refunding procedures set forth in the Settlement
Agreements.
30.- Class Counsel in this case are experienced and competent attorneys in the
area of illegal exaction law.
31. The estimated administrative costs of the refund process are
approximately $300,000.00.
5
2.001 12770
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32. There are over four hundred practicing attomeys in Washington County
and the only attorneys who have undertaken representation of the plaintiffs in illegal
exaction cases arc Class Counsel and John Lisle.
33. There is no evidence in the record that would support a finding that Class
Counsel have experienced personal or professional hardship as a result of this case. This
Court docs not recognize the evidence of press and other communications critical of class
counsel's requested attorney's fee as either personal or professional hardship that may
properly be considered in determining a reasonable fee.
34. Defendants in this case were represented by skillful, experienced and
competent counsel who zealously and effectively represented all of the defendants
throughout the litigation.
35. _ This case is the first successful prosecution of an illegal exaction action
involving Amendment 59 to the Arkansas Constitution. The subject matter and questions
that were dealt with in this litigation were both novel and difficult.
CONCLUSIONS OF LAW
36. The Court is to utilize the factors set forth in Rule 1.5 of the Model Rules
of Professional Conduct and the Arkansas Supreme Court case of Powell v Henry, 267
Ark. 484, 592 S.W.2d 107 (1980) in determining a reasonable fee. Such factors incude
but are not limited to : (i) the time and labor required; (ii) the novelty and difficulty of
the questions involved; (iii) the skill requisite to perform the legal service properly; (iv)
the likelihood, if apparent to the client, that the acceptance of the particular employment
will preclude other employment by the lawyer; (v) the fee customarily charged in the
locality for similar legal services; (vi) the amount involved and the results obtained; (vii)
6
2001 12771
the time limitations imposed by the client or by the circumstances; (viii) the nature and
length of the professional relationship with the client; (ix) the experience, reputation, and
ability of the lawyer or lawyers performing the services; (x) whether the fee is fixed or
contingent; (xi) whether there has been a substantial economic benefit bestowed upon the
class; (xii) whether there was personal or professional hardship incurred by the attorneys
of record; and (xiii) whether there was a vindication of an economic right.
37. Both sides agree that Powell is .the controlling case law in Arkansas in
determining a reasonable attorney's fee in this case. The Court, under Powell, must also
consider the issue of adequate compensation sufficient to cause attorneys who are
competent to handle this type of litigation to accept such litigation and to devote
sufficient time to adequately prepare or present the case.
38. This consolidated case required an unusually large amount of attorney
time and resources even as compared to other illegal exaction cases
39. Several of the legal issues presented by this case were issues of first
impression concerning the interpretation of Amendment 59 of the Arkansas Constitution.
40. The services of Class Counsel in this matter have been of the highest
caliber.
41. The fee of Class Counsel is contingent in that if there had not been a
recovery for the plaintiff class then Class Counsel would not have been entitled to any
compensation or to reimbursement of costs advanced on behalf of the plaintiff class.
42. The members of the plaintiff class received a benefit from the
establishment of the Settlement Funds.
2001 12772
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