by Johnnie Belle Reagan
When will enough be enough? How can the City Council unleash a contractor with an open checkbook and allow him to continue to go unsupervised in a time when the City is a serious financial crisis? How can every department of the City sustain losses due to the financial cut backs and the contracted City Attorney still be able to line his pockets?
The City is currently experiencing a $600,000.00 short fall in balancing and approving their current proposed budget. The City Manager, Michael Hornes, has twisted, pulled, tugged and cut trying to cover the gap. For sure at least $300,000.00 of the short fall went directly to one individual; the City Attorney Ron Stutes and his law firm in Tyler Potter Minton. Ron Stutes was able to do this by filing an unjust lawsuit against a local business owner Jerry Laza, Palestine Saw and Lawn.
How did the bill get so high? In the beginning it had been reported that the expected spend on the law suit would be $20,000.00. That might have been the case except for Laza being underestimated. While he is currently been driven to Bankruptcy, he was able to stand up for his rights and financially hold out longer than expected. Surprisingly Laza was able to figure out that the Lawsuit was filed without the knowledge or approval of the City of Palestine City Council. According to recently obtained court documents, Ron Stutes himself admitted under oath that he had no approval but also stated in the same sentence, “the City Council was made aware of this and there has been absolutely no objection to going forward.” The Case was file in 369th District Court on June 9th 2016 and the City Council was made aware of the filing by Mr. Laza in a letter sent June 24th 2016, 15 days later. For example construction company ABC pulls up in town and starts filling pot holes. They were just contracted to do a small repair on one road, but see the additional work. ABC starts sending bills to the City and the City just pays them. That is exactly how this worked to the tune of $222,000.00 over the City Budget.
What is known for sure about the errors in this case? City of Palestine is a Home-Rule Municipality. In accordance with Attorney General ruling JC-0544 “a home-rule city that possesses all powers not denied it by the statues or constitution, so long as the city has incorporated those powers in its home-rule charter”. Ron Stutes filed the law suit under Texas Local Government Code that has not been adopted into the Palestine City Charter. Also, to seek injunctive relief Stutes applied Texas Local Government Code 211 incorrectly questionably violating Laza’s right to judicial review and appeal through avenues other than Civil Court. Unfortunately for Mr. Laza the District Court that tried the case was more familiar with Criminal Law than Civil Proceeding and stated that it was totally unfamiliar in Municipal Law. Through a multitude of missteps and unbelievable rulings that kept the Jury from hearing evidence that supported Laza’s vested property rights the Jury ruled in favor of the City and awarded them $163,155.00 in fines.
Where it stand as of today? Laza filed an Appeal on June 4th 2018. Unfortunately Stutes has no plan to stop, shortly after the Appeal was filed Stutes started Contempt of Court and Assets Seizure motions. Financially handcuffed and unable to post a cash bond for the Judgement amount of $163,155.00 to keep from being jailed for Contempt Laza’s only option was to file for bankruptcy. While the Bankruptcy put a wrinkle in Stutes plan, he immediately filed with the Bankruptcy Court to have the “Stay” lifted with intentions to file criminal charges for Contempt of Court on the Injunction and asking for up to 18 months in jail. The Bankruptcy Court granted a partial lift of the “stay” on October 2, 2018 with Ron Stutes immediately filed in District Court for another Contempt hearing. What the Bankruptcy Judge did not allow is for Ron Stutes to go after any monetary or forfeiture actions to satisfy the $163,155.00 judgement or additional court costs. This is totally on the City’s dime. What will be interesting is how “double jeopardy” will play in the defense of criminal charges since Laza had already been before a criminal court and that case was ruled in his favor.
Where do you go the jail for violation equal high grass citation? Palestine Texas. It is somewhat ridiculous to expect a working man to defend himself in a Civil Law Suit against a Lawyer that has no client and an unlimited bank account. How do you even justify a return on investment that cost you at a minimum of $300,000.00 plus to get $163,155.00 at best? Stutes spending and billing has not stopped just within the last 60 days the City of Palestine has written checks to Potter Minton totaling $43,526.00 in a budget line that normally averaged $7,500 a month. Even more disturbing is the fact this Municipal Governing body has allowed one employee to walk all over them and a tax paying business that has been a contributor to the community for over 30 years. The biggest travesty of all is that there is no one to turn to that keeps Municipalities in check and balance.
Final thought: we should all be cheering and praying that Laza’s prevails because if this set precedence for the future of how Municipal Governments do business the trouble is only beginning.