O.C. Ordered to Pay Lawyer in Fees Case

Orange County has been ordered to pay a national homebuilder’s attorney $1.2 million after he successfully argued in a lawsuit that the county overcharged for building inspections.

In January, Orange County Superior Court Judge C. Robert Jameson sided with Barratt American Inc. and ordered the county to reduce future planning and building fees a total of $4.5 million. The judge faulted county officials for failing to justify how fee revenue was spent from 1999 to 2002, despite requirements that the fees reflect only reasonable costs of providing service. Collecting more is considered an illegal tax, and excesses must be credited against future fees in an unspecified manner.

A final judgment in the case was entered last week; the county hasn’t decided whether to appeal. At the same time, Jameson ordered the payment to Redding attorney Walter McNeill, who represented Barratt in court.

Jameson awarded McNeill 2 1/2 times his costs in bringing the Barratt lawsuit, saying he’d acted as a “private attorney general” under state law. The multiplier is allowed if a lawsuit results in a “significant benefit” to the public. The judge also ordered the county to reimburse $161,735 in expenses to Barratt.

The county’s private counsel in the case, Jeff Dunn, argued that McNeill wasn’t entitled to attorney fees and that Barratt should shoulder its own costs. The county has paid Dunn $646,512 in fees.

Barratt’s lawsuit, filed in 1999, alleged that the county overcharged builders $18.5 million and misspent the money.

Jameson ruled that the county had justified $14 million in costs, including a $7-million computer system and a fleet of vehicles.

Both sides have indicated that they might appeal portions of Jameson’s ruling. The appeal could be wrapped into a pending state Supreme Court review of a similar lawsuit over building fees in Rancho Cucamonga that Barratt lost at trial. Oral arguments are expected this summer.

In March 2003, Orange County began charging fees based on the time and materials spent on jobs, not the flat fee it had previously charged. But the county still required developers to post a hefty deposit, an amount even larger than the fees, which prompted Barratt’s lawsuit.

Last year, the county again revised and increased its fee deposits for plan checks and inspections. McNeill sued again, calling those fees excessive.