Bossier City insurer asserts substantial overcharging by Walker Place attorneys and experts

[Editor’s Note: This is the third article on the subject of Bossier City government’s handling of its “Walker Place” project. The rst two article’s appeared in the April 17 and May 1 issues of The Forum.]

Public records from Bossier City Hall detail how one of the city’s insurers, St. Paul Travelers, ordered up audits, which assert serious overcharging by attorneys and experts in the Walker Place development federal court litigation.

Bossier City paid – and lost – over $5,000,000 in taxpayer money to Walker Place attorneys and experts stemming from its years-long vendetta against developer U.L. Coleman Companies. While the subject audit reports appear to open the door for recovery of substantial portions of that total, no city documents have been produced suggesting any such recovery effort by Bossier City officials.

The audit reports, dated March 22 were produced in response to my public records request of March 6. The reports were produced only after my second request and have been heavily redacted by yet unidentified individuals. The redactions hide some specific tasks by attorneys and prevent normal identification of those linked to specific, questionable charges. Another follow-up request has been made of Bossier Mayor “Lo” Walker for un-redacted copies of the audit reports.

The first and second parts of this series detail how Bossier City government lost more than $27,000,000 through gross mismanagement of its Walker Place development project. From the outset, Bossier City Attorney Jimmy Hall pushed aside the city’s insurers in the related litigation in U.S. District Court in Shreveport.

Hall’s litigation process channeled directly to him all attorney and expert invoices for payment approval.

That system remained in place from early 2009 – the federal lawsuit was filed by U.L. Coleman Companies, LLC, against Bossier City government and the Bossier Metropolitan Planning Commission in December 2008 – until Bossier City’s insurers finally entered the fray more than three years later in February 2012.

Once the city insurers, St. Paul Travelers and National Union Fire Insurance Company, were involved, separate battles between those insurers and their client, Bossier City government, broke out.

During the period when resulting lawsuits were threatened, filed and ultimately settled, St. Paul Travelers’ attorneys brought in specialty law firm Barger & Wolen, LLP, to audit the billings of Walker Place attorneys and experts who had been hired by Hall at the beginning of the litigation. Charges to the city were paid as submitted throughout the years of litigation.

Audit reports of the city’s attorneys, Neil Erwin Law and Kean Miller, LLP, have thus far been produced. Apparently at the discretion of St. Paul Travelers’ attorneys, the audits concern only the charges between February 2012, when city insurers became involved, and December 2012, when settlements – as least informally – were reached.

Not coincidentally, these agreements between city hall and its insurers happened at very nearly the same time the city announced its settlement with U.L. Coleman Companies in the subject federal court lawsuit.

Through February 2013, Bossier City paid out $5,269,082 to Walker Place attorneys, experts and other vendors. Of that, $2,045,977 was paid during the 10-month audited period. Auditor David J. McMahon of Barger & Wolen, LLP, concluded that $579,233, or 28.3 percent, of the 10-month period’s total was “unreasonable” and “should not be reimbursed at this time” by the city’s insurers. Included were $72,453 in fees paid to Neil Erwin Law, $333,217 in fees paid to Kean Miller, LLP, $64,848 in non-attorney costs paid to Kean Miller, LLP, and $108,715 paid to experts and other vendors.

McMahon, who cites 22 years experience in such work, based his audit determinations on guidelines of the American Bar Association Committee on Ethics and rulings in related federal court cases. Though the auditor’s comments concerning Neil Erwin Law were matter-of-fact, those concerning Kean Miller, LLC, were the opposite.

The audit hammers the firm for “vague, imprecise and overbroad billing,” for a high percentage of “block-billing” entries (rather than billing hour-parts for specific and separate tasks), for “longbilling days” (e.g, an attorney billing over 10 hours in a given day for their work), for “vague and ambiguous billing entries” and for “duplicative entries.” McMahon noted “particular concern” for “inordinate time” and “duplicative attendance” in the law firm’s conduct of depositions.

Based on the Barger & Wolen audit analyses, there were no safeguards in place to prevent overcharging by any attorney and/or expert. The system – invoices sent directly to Hall for his payment approval – was purely “bill it, we pay it.”

If the percentages of amounts disallowed as per the audits were extended to the full four years of litigation expenses, some $1,000,000 of the more than $5,000,000 legal tab could be recovered on behalf of Bossier City taxpayers.

Documentary evidence thus far produced by the city does not prove the total exposure of the city’s insurers in all aspects of Walker Place losses, but the city settled for a total of $1,000,000 from each insurer.

That $2,000,000 total is some $3.3 million less than litigation expenses alone, before any consideration of the city’s tens-of-millions in other losses.

St. Paul Travelers may have orderedup the audits to limit their overall exposure to the city’s claims. Regardless, the detailed audit reports by Barger & Wolen stand alone as a strong and impressive basis for an aggressive effort by the city to recover portions of taxpayer money paid to attorneys and experts. Given Hall’s solid control of Bossier City government, however, such cannot be expected.

Answers to a list of key questions remain as related public documents are yet being withheld. Most notably missing from my multiple public records act requests are the un-redacted audit reports and Hall’s letters, emails and other Walker Place project communications. Thus far, fewer than 10 such documents written by Hall over the four years of litigation have been produced, none of which is noteworthy.

For now, it is clear that the loss suffered by Bossier City taxpayers on Walker Place was a decided win for its attorneys and experts.

Elliott Stonecipher is a native and resident of Shreveport, La. A graduate of Louisiana Tech University and Louisiana State University, he is president and owner of Evets Management Services Inc. Since Hurricane Katrina in 2005, Stonecipher has committed to pro bono work on a range of local, state and national issues, including reform of governmental and political ethics, and reform of national policies governing the U. S. Census Bureau. His work has been published in The Wall Street Journal, and he has appeared on CNN and Fox News Channel.