The next hurdle in the 80-million-dollar fire fee lawsuit

The Marion County Judicial Center is shown in Ocala on Wednesday, August 5, 2020. [Bruce Ackerman/Ocala Gazette] 2020.

The law firm that represents the class entitled to refunds of fire fees illegally collected through City of Ocala utility bills filed a motion seeking $6,480,957.75 in attorney’s fees after eight years of litigation, multiple appeals, and a ruling that found the city must refund $80 million.

The legal fees of the law firm that represented the class, Bowen|Schroth, are paid from the same pot of money that the city pays into for refunds. This means the class who receives the refunds will pay for their attorneys’ fees, not the city.

In considering the reasonableness of the firm’s attorney’s fees, Judge Robert W. Hodges will review the history of the case. The firm’s summary of events can be found in their motion and read using this link: Motion to disburse.

The city has been directed by its attorneys not to comment on what source it will use to refund the $80 million. However, additional filings with the court by the city as well as documents obtained by public records request reflect potentially another disagreement the court will have to referee- how the refunds will be distributed.

As previously reported, the city filed a motion on Dec. 8 indicating it was unable to fund the $80 million within the 60 days ordered by the court and requested an extension until the end of February. In the city’s request, it stated that it had identified $20 million in unrestricted funds but that the city needed more time to explore obtaining the remaining $60 million in loans.

Communications between the city and banks about how the city might utilize the $60 million in loans reflect the city’s intention to put in place an additional application process for the class to receive their refunds and a deadline to apply or forfeit.

However, the attorney for the class has filed a request today with the court proposing the following schedule and process for refunds:

The City should administer the Common Fund, process all payments from the Common Fund, and separately pay all administrative and overhead costs related thereto. The City should pay all refunds owed and mail refund checks to all class members within 30 days of the Court’s order. Each refund check to each class member should be equal to 91.61272% of all illegal taxes collected from each class member since February 20, 2010, rounded down to the nearest whole cent (the “Initial Refund Checks”).

 For example, if a class member paid $1,000 in illegal taxes, then that class member would receive an initial refund of $916.12 (1,000 x 0.9161272 = 916.1272). Prior to mailing each check, the City should verify each class member’s current mailing address though the United States Postal Service, Experian, Xverify, Accurint, or another nationally recognized address verification service. The City should send each check only with a notice which states: “The enclosed check represents a refund of over 91% of the illegal taxes collected from you by the City of Ocala as part of your utility bill since February 20, 2010.

 The City was ordered to pay you this refund as the result of a lawsuit filed against the City by Discount Sleep of Ocala, LLC, d/b/a Mattress Warehouse, and Dale W. Birch. This refund check is only valid for 180 days from the date of issuance.” The City should maintain an electronic log containing the following information for each of the Initial Refund Checks: (a) date issued, (b) payee name(s), (c) amount paid, (d), mailing address, and (e) date cashed or cleared. Within thirty (30) days after mailing the last Initial Refund Check, the City should file a report with the Court detailing the total number of Initial Refund Checks mailed, the total amount paid, and the anticipated Common Fund balance if all Initial Refund Checks are cashed.

No less than 270 days after the Court’s order or 30 days after the City mailed the last Initial Refund Check, whichever is later, the City should pay the remaining Common Fund balance (“Remaining Balance”) and mail supplemental refunds only to those class members who cashed their Initial Refund Checks. Each Supplemental Refund Check should be calculated by multiplying the illegal taxes collected from each class member multiplied by the Remaining Balance, all of which is divided by $72,633,228.36 and then rounded down to the nearest whole cent (the “Supplemental Refund Checks”). For example, if a class member paid $1,000 in illegal taxes and the Remaining Balance is $500,000, then that class member would receive a supplemental refund of $6.88 (1,000 x 500,000 ÷ 72,633,228.36 = 6.8839).

 The City should mail each of the Supplemental Refund Checks only with a notice that states: “The enclosed check represents the final refund of the illegal taxes collected from you by the City of Ocala as part of your utility bill. The City was ordered to pay you this refund as the result of a lawsuit filed against the City by Discount Sleep of Ocala, LLC, d/b/a Mattress Warehouse, and Dale W. Birch. This refund check is only valid for 180 days from the date of issuance.” The City should maintain a separate electronic log containing the following information for each of the Supplemental Refund Checks: (a) date issued, (b) payee name(s), (c) amount paid, (d), mailing address, and (e) date cashed or cleared. Within thirty (30) days after mailing the last Supplemental Refund Check, the City should file a report with the Court detailing the total number of Supplemental Refund Checks mailed, the total amount paid, and the anticipated Common Fund balance if all Supplemental Refund Checks are cashed.

Within 30 days after the 180-day expiration date of the last Supplemental Refund Check, the City should provide a copy of both electronic logs to Class Counsel and file a motion to close the Common Fund. The City’s motion should detail the total number of Initial Refund Checks issued, the total cashed or cleared amount of Initial Refund Checks, the total number of Supplemental Refund Checks issued, the total cashed or cleared amount of Supplemental Refund Checks, and the remaining Common Fund balance.

Efforts are being made to set this matter for hearing before Hodges.

The Jan. 4 hearing was canceled because the city agreed to a judgment requiring the city to reimburse the attorney representing the class action a little more than sixty thousand in costs.