Town, EDA civil motions arguments continued to November 8

A scheduled Wednesday afternoon motions hearing in the Town of Front Royal’s civil suit against the Front Royal-Warren County Economic Development Authority has been continued to November 8, at 9 a.m.

Apparently Harrisonburg-based Judge Bruce D. Albertson and attorneys for both sides were aware of the continuance, because as the clock turned to the scheduled single case 2 p.m. docket none of that trio was present. However this reporter, a colleague from another media outlet, EDA Board of Directors Vice Chairman Jeff Browne, a court bailiff and Circuit Court clerk were all present along with a single spectator who had traveled from Winchester.

A clerk’s call to the judge’s office and Browne’s call to the EDA attorney’s office quickly confirmed the new hearing date.

What will be argued on the new hearing date is the EDA’s claim of institutional sovereign immunity from the financial liability at issue in the Town’s litigation seeking recovery of “as much as $15 million” in misdirected Town assets related to the EDA’s own civil litigation seeking recovery of $21.3 million in EDA assets.

Current EDA Executive Director Doug Parsons has promised to work with Town officials to ascertain exactly how much the EDA owes the Town in overpayments or misdirected asset allocation.

However Town legal staff indicated the threat of statute of limitations deadlines on misdirected Town assets due to uncertainty on exactly what assets at what time are involved, in the decision to file the Town civil suit against the EDA/IDA.

Town Attorney Doug Napier is on one end of the sovereign immunity legal arguments anticipated at a motions hearing now scheduled for Nov. 8. Royal Examiner File Photo/Roger Bianchini

Of the Town’s dispute of the EDA sovereign immunity claim, EDA counsel wrote, “Plaintiff (the Town) argues that there is a fiduciary duty owed by the EDA to the Town that is actionable if breached. However, the relationship between the EDA and the Town of Front Royal is governed solely by statute,” which appears to be a legalese point of law based in the relationship between EDA’s and the municipalities that create them to oversee economic development for them.

“That the Town of Front Royal voluntarily waived its right to control the EDA, contrary to the statutory mandate, does not create an actionable fiduciary duty inuring to its benefit,” EDA Attorney Rosalie Fessier wrote, further observing, “The General Assembly has imposed a matter of accountability and protection of the public money within the statutory scheme and did not provide for a procedural remedy in the manner sought in this case.”

Town legal counsel contends that the EDA as an entity and its former executive director made unfulfilled promises regarding Town assets that negate the sovereign immunity claim: “… here, the EDA and McDonald represented to the Town they were going to invest in certain investments on behalf of the Town, the EDA and McDonald were engaged in ministerial, not discretionary, duties … The facts alleged above constitute an implied in fact, if not an express, contract between the EDA and Town. As pled, the EDA and McDonald breached those contracts.”

Uh oh, breaches of “implied” versus “express” contracts and fiduciary duties; and a “voluntary” abdication of oversight authority by the Town are likely to lead to some mind bending legalese arguments on November 8 – can’t wait.