PALMYRA — At the Dec. 19 Fluvanna Board of Supervisors approved the county attorney entering into mediation with Davenport and Co., LLC in hopes of settling pending litigation.
The action came after an extended closed meeting session. Also after the closed meeting, the supervisors appointed Don Weaver (Cunningham District) to represent the board during any of these possible mediations.
The pending litigation is a lawsuit the county filed against Davenport and Co., LLC regarding advice on issuance of bonds for the new high school.
In September 2011 the Board of Supervisors filed civil lawsuit against Davenport, the financial advisor of Fluvanna for over 15 years. In February 2012 the case was dismissed by the Circuit Court of Fluvanna because Judge Benjamin N.A. Kendrick said the commonwealth’s constitution separates the judicial branch from getting involved in decisions a legislative branch entity makes. The case was dismissed with prejudice.
Attorneys for the county filed an appeal with the Supreme Court of Virginia in May 2012 with the petition entered in July. Davenport filed a brief in August but the Supreme Court granted the case on Nov. 2.
Davenport was unaware of board’s approved mediation until contacted by Fluco Blog on Dec. 27. The company released the following statement to Fluco Blog via email:
Davenport stands behind the advice given to the County regarding the high school bonds. Since the County filed suit without ever talking [to] Davenport, we welcome the opportunity to discuss how we might resolve our differences. We believe the County’s lawsuit was properly dismissed by the trial court and are confident the decision will be upheld on appeal. However, we are open to an amicable resolution of the case. Davenport looks forward to the mediation which will be our first opportunity to sit down with County representatives.
Shaun Kenney (Columbia District), chairman of the board, declined to comment and directed all questions to the county attorney, Frederick Payne. Payne’s firm, Payne and Hodous, is closed for the holidays this week. County administrator Steve Nichols also declined to comment also saying his only knowledge on this last step the board took is the motion in public record.
The county did refinance the bonds in question on Dec. 20. The estimated savings of the refinancing will be around $10 million over the course of the bonds. A more exact number will be given to the Board of Supervisors with a full presentation during the Jan. 2 regularly schedule board meeting.
The mediation could settle the case without a need of a hearing. The board would have to approve any mediation agreement Weaver and the county attorneys agree to with Davenport and its attorneys.
The original complaint filed in the Circuit Court of Fluvanna, the county asked for $18 million in compensatory damages, $350,000 in punitive damages, reasonable attorneys’ fees, repayment of all fees paid to Davenport, pre-judgement interest, post-judgement interest, costs plus any other relief the court finds appropriate.