The Virginia Supreme Court has ruled that the city of Virginia Beach must be more forthcoming in detailing how it spent hundreds of thousands of dollars in legal fees in a dispute involving an office building it purchased and a local dentist who had been a tenant.
The seven-member court on Wednesday said a circuit court judge was too generous in agreeing with the city’s position that the request for an accounting of counsel fees and expert fees was exempt from disclosure because of the attorney-client and work-product exceptions under the Virginia Freedom of Information Act.
Justice Richard McCullough, writing for the court, ordered Virginia Beach Circuit Court Judge H. Thomas Patrick Jr. to revisit his ruling, and to consider the possibility of awarding counsel fees and costs to the dentist who has been demanding the records, Dr. Allan Bergano.
“We conclude that the circuit court’s application of the attorney-client and work-product exception was excessively broad and, consequently, we will reverse the judgment below,” McCullough said.
According to the decision, the dispute between Bergano and the city dates back to 2014, when the city decided to buy the building in which Bergano was a tenant in order to widen the adjacent street. The city initially told Bergano he would have to relocate, but then said he could remain in the building as a tenant.
Bergano, who eventually moved, sued the city for violating his due process and equal protection rights, and the city later agreed to pay the dentist $175,000 in costs, plus $190,000 in attorney fees, the court said.
At the same time, though, the city racked up $300,000 in fees to outside counsel, Norfolk’s Kaufman & Canoles, plus another $40,000 in expert fees in litigating the case against Bergano, according to a Virginian-Pilot report earlier this year.
Bergano, asserting a claim under the VFOIA, demanded an accounting of how the fees were spent.
In response, the city filed a heavily redacted document that included little description of the work performed, citing the attorney-client and work-product exceptions, according to the decision, which includes an image of the redacted document.
Patrick sided with the city, and Bergano appealed.
The court, in reversing and remanding the case, started off by agreeing with the importance of the exceptions, saying attorneys should be able to shield their thoughts, impressions, conclusions and legal theories from their adversaries and be able to discuss legal strategies in private with their clients.
“It is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel,” McCullough said, quoting the U.S. Supreme Court’s 1947 ruling in Hickman v. Taylor.
However, McCullough said, the exceptions do not extend to billing records and expense reports under the VFOIA.
“We conclude that the city’s redactions were too broad and included items that are not shielded from disclosure by the attorney-client or work-product exceptions,” McCullough said.
Bergano’s attorney on the appeal, L. Steven Emmert, said it was clear that the city read the VFOIA in an overly broad manner.
“During oral arguments, there were times I didn’t know what I was asking for,” said Emmert, of Sykes, Bourdon, Ahern & Levy in Virginia Beach. “We’re being sent back to take another crack at it.”
Assistant City Attorney Christopher Boynton said he was gratified that the court agreed that an in-camera review of the bills was appropriate, and that the court affirmed the importance of the attorney-client and work-product privileges.
“One takeaway is that we can certainly improve our processes,” Boynton said.
Hunter Sims Jr., a Kaufman Canoles partner listed as one of the attorneys involved in the underlying case, declined to comment.