San Martin residents in $18,000 legal fee dispute


The San Martin Neighborhood Alliance and its former lawyer will
enter arbitration negotiations Thursday in a dispute over an
$18,000 bill for legal fees related to the town’s failed
incorporation effort.
The San Martin Neighborhood Alliance and its former lawyer will enter arbitration negotiations Thursday in a dispute over an $18,000 bill for legal fees related to the town’s failed incorporation effort.

Attorney Richard van’t Rood, who is also an SMNA board member and San Martin resident, sent the organization an invoice for the legal fees after a lawsuit he filed on the organization’s behalf was settled in June, according to SMNA members.

The SMNA board of directors refuted the charges, and agreed to pay $1,100 for its share of costs for the arbitration, which will be heard and decided by the Santa Clara County Bar Association.

SMNA president Sylvia Hamilton said other board members “felt it would be inappropriate” for the board to pay legal fees to another board member.

“It’s unfortunate it came to this,” said SMNA president Sylvia Hamilton. “We’ve never looked at (the SMNA’s relationship with van’t Rood) as attorney-client. We always looked at him as an important part of a vital team that was working together.”

She added, “I just hope a fair job is done at the arbitration.”

Van’t Rood declined to comment on the dispute, citing attorney-client confidentiality privileges.

Among other local causes, the SMNA, including van’t Rood, worked on a lengthy effort to incorporate the town of San Martin into a city. That effort went on for more than two years, and consisted of a series of studies, $150,000 in fees paid to consultants and a county agency, and numerous public hearings.

The incorporation effort died in November 2008, when the Santa Clara County Local Agency Formation Commission denied the town’s request for cityhood.

Until that point, van’t Rood offered his advice and legal expertise, free of charge, as a service to the board to guide the incorporation proponents through paperwork and other requirements to become a city. As a resident, he was also personally interested in incorporation – at a series of public hearings held by LAFCO last year, van’t Rood was among the most vocal supporters of San Martin’s incorporation.

Following LAFCO’s denial, van’t Rood filed a lawsuit against the commission on SMNA’s behalf.

Based on SMNA members’ limited public discussion of subsequent events, it is unclear as to whether or not the organization agreed to pay the lawyer for filing the lawsuit, and the two parties did not sign a written contract for paid representation prior to the complaint’s filing.

Alleging, among other concerns, that LAFCO improperly influenced a financial study on the feasibility of San Martin’s self-sufficiency by supplying outdated and incorrect data, the lawsuit was settled in June. LAFCO agreed to waive more than $211,000 in outstanding fees owed by the SMNA. The SMNA agreed to drop the complaints in the lawsuit and to abandon its incorporation attempt.

Frustrated SMNA member John Sanders insisted the board discuss the upcoming arbitration at a regular public meeting for the nonprofit organization earlier this month. He wondered why van’t Rood had not been paid $18,000 for legal services. Sanders said at previous meetings, before receiving van’t Rood’s bill in the mail, the SMNA had clearly decided it would pay him.

“My understanding, from the meetings I attended, was the $18,000 in question was to be paid to Mr. van’t Rood,” Sanders said. He said those meetings occurred between November 2008 and May of this year.

As a 501c4 private corporation, the SMNA is not required to allow the public to view minutes of its meetings. Citing advice from the attorney who will represent SMNA at the arbitration, Hamilton declined to comment on discussions at previous meetings.

A phone message left with the Santa Clara County Bar Association was not returned.

The $18,000 cash currently occupies a trust account in van’t Rood’s name, set aside specifically for costs associated with the incorporation effort which is no longer under consideration.

The money, as well as the $150,000 in other costs paid in recent years for the incorporation effort, was raised by a series of fundraisers, donations from incorporation supporters, and the coordination of hundreds of volunteers, Hamilton explained.

The SMNA currently has about $13,000 in the bank, Hamilton said.

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