Incline Village General Improvement District moves to recoup fees in Katz lawsuit
September 10, 2018
INCLINE VILLAGE, Nev. — Following a legal win in the state Supreme Court earlier this summer, the improvement district will now work to retain and recoup all legal expenditures in a court saga stretching back more than seven years.
The case in question was filed against the Incline Village General Improvement District in 2011 by resident Aaron Katz. After years of making its way through the court system, the Nevada Supreme Court affirmed previous rulings by a district judge favoring IVGID. Katz's attempt to have the case reheard before the entire Supreme Court was denied earlier this summer.
Now IVGID intends to fight a second Katz appeal concerning attorney's fees that he was ordered to pay to IVGID after the district court's earlier decision.
If successful in fighting that appeal with the Supreme Court, IVGID then intends to recoup the entirety of the attorney's fees spent to fight the appeals at the Supreme Court — a move that trustees hope will bring an end to a court battle blamed for spewing toxicity into the community.
"I think that it's been loudly and clearly stated tonight by the community, and has over the last seven plus years, we want the full amount that we can absolutely get to put this to rest once and for all," Trustee Tim Callicrate stated at the Aug. 27 trustee meeting.
"This has gone on way too long and all of us have been skewered on the board. Most of the people here in the audience have been the subject of vitriol and it just, it has to stop. It's created a toxic environment in the community…"
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Chairwoman Kendra Wong struck a satisfied tone.
"For every former and current employee who endured Mr. Katz's abuse … for every board member who has sat at this dais and listened to his public comment and taken his abuse, from not only him but other members of the community as well, this is for you," Wong said.
Trustees were far from the only ones to comment.
Around seven residents spoke at the start of the meeting encouraging the board to approve the legal action in a case involving a man they described as "a chronic litigant" and worse.
"Any other choice and this abuser of the public trust declares a win and gains strength," said resident Kaye Shackford. "It's appalling that our legal system can be so subverted by one narcissistic ex-lawyer with a grudge."
Others cited the district judge's ruling, which described the lawsuit as "frivolous" and described Katz as a man with "an obsession with obstructing the staff of IVGID with burdensome records requests and contentious litigation."
Katz did not return a voicemail left Thursday morning, nor did he respond to an email seeking comment in late July. A request for comment left with an attorney who represented Katz also went unanswered.
Several IVGID critics mentioned the lawsuit in comments at the Aug. 27 meeting.
Crystal Bay resident Frank Wright questioned if the district could legally go after the additional attorney's fees since the lawsuit is closed.
"Before you appropriate the money I think you need an answer to that question from another counsel …"
All the way to the Supreme Court
Katz's case dates back to 2011. He initially argued, in part, that IVGID lacked the ability to offer the array of facilities and services it does. Among other issues raised, Katz questioned the validity of IVGID's recreation and beach facility fees. Katz also questioned portions of IVGID's public record policy.
In total, Katz initially cited less than 15 issues — known legally as "causes of action." (The district judge's order cited an initial 14 causes of action, however, Katz's appeal to the Supreme Court stated his complaint started with 12 causes of action.)
Katz filed multiple amendments, bringing the total number of causes of action to 24.
Over time, the district judge dismissed all but part of one of Katz's causes: his argument that IVGID failed to provide him with requested documents. The issue was considered during a two-day trial.
Ultimately the judge ruled in favor of IVGID, which then sought attorney's fees for the case.
In ruling on that matter, the district judge sided with IVGID in an order that was highly critical of Katz and his motives.
"Neither courts nor the law of Nevada exist so that those who detest their local governments can bully them into submission. At some point, these actions must come to an end. That point has now been reached," the judge wrote.
Katz appealed both matters, the first being his lawsuit and the second being the awarding of attorney's fees to IVGID, to the Nevada Supreme Court. The appeal of the attorney's fees, however, was stayed in order to allow the other appeal to move forward. The thought being that if Katz prevailed in the first appeal then the second appeal would be unnecessary.
Through what IVGID's legal counsel described as a "complex process" it secured payment of $241,646 from Katz for attorney's fees awarded in the district court decision. The money was placed in a trust, according to IVGID.
Nearly two years after Katz filed his appeal, a panel of Nevada Supreme Court justices affirmed the district court's decision.
After that February decision, Katz petitioned to have the case reheard, which was denied. He then petitioned to have the case heard by the entire Nevada Supreme Court, rather than a panel of justices. That request was denied in late July, seemingly putting an end to the case.
However, Katz's appeal of the decision to award attorney's fees remained on pause at the Supreme Court.
When it came time on Aug. 27 to consider whether to fight Katz's remaining appeal, the five-member board of trustees proceeded without dissent.
Trustees agreed to retain litigation counsel Tom Beko, whose firm has represented the district throughout the case, in order to defend the attorney's fees awarded by the district court.
The cost for that legal representation is estimated at $40,000. As Beko explained to trustees at the Aug. 27 meeting, the actual costs could be considerably lower. But, as Beko said, given Katz's history of wanting to re-litigate the entire case, rather than the narrow issues at hand in the appeal, it will likely be a lengthier and more costly process.
If IVGID is successful in defending against that appeal and keeping the $241,646 Katz previously paid to it, IVGID would then seek to have all other attorney's costs paid by Katz, which could cost another $30,000.
In addition to the $241,646 already paid to IVGID, the improvement district has spent $157,154 to defend Katz's appeal to the Supreme Court. That number doesn't include the $40,000 approved by the board Aug. 27 nor does it include the possible $30,000 to recoup all its attorney's fees.
If IVGID prevails through the remainder of the legal process, it would recoup up to an additional $227,514 — the $157,154 plus the additional $40,000 and $30,000 to finish the case.
This is not a money-making endeavor, Beko stated, but an attempt for IVGID to break-even on its litigation costs.
"My goal has always been throughout this litigation to successfully defend each and every one of Mr. Katz's claims and ultimately require him to pay back IVGID for what he has cost IVGID, and so far we have done that and that's where we're headed," he said.