Source: Lake Geneva Regional News

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Will there be a settlement?
Hummel vs. city mediation set

by Lisa Seiser

March 31, 2011

Attorneys for Geneva Ridge Joint Venture and the city of Lake Geneva are scheduled to meet at 9:30 a.m. Tuesday in Milwaukee with U.S. Magistrate Judge William E. Callahan Jr.

But, there will be some written demands and offers between the two parties expected to be made prior to that conference.

"The purpose of this mediation is to permit an informal discussion between attorneys and parties on all aspects of the lawsuit that bear on settlement," Callahan wrote in his order. "To promote a full and open discussion, communications occurring during the mediation/settlement conference cannot be used by any party with regard to any aspect of this litigation."

Earlier this month, the stipulations were ordered regarding the process for the mediation/settlement. Callahan ordered presettlement demands and explanations produced by Geneva Ridge on or before March 22 and for the city on or before March 25.

On Monday night, the City Council met in closed session following its regular meeting. The closed session was to discuss the Geneva Ridge and Mirbeau lawsuits against the city, but Mayor Jim Connors said before the closed session started that the council would not be reconvening to make any decisions. Rather, the closed session was for discussion.

"On occasion, this process will lead directly to a settlement," Callahan wrote about the written demands. If a settlement is not reached, the plaintiffs are ordered to send copies of the settlement demands and offers to the court by March 31.

The settlement demands and offers will not be part of the court records in the case. Callahan ordered all documents to be submitted to his chambers at the U.S. Courthouse in Milwaukee. Both parties are supposed to "set forth the relevant positions of the parties concerning issues of fact, issues of law, damages and the settlement negotiation history of the case."

Accompanying each of the mediation/settlement statement, information to the court shall indicate the minimum requirements or maximums of the party for which they would be willing to settle, including damages and attorneys fees.

On Feb. 23, U.S. District Judge J.P. Stadmueller ordered mediation in the case between Geneva Ridge and the city and stated the conference focus on all issues necessary to fully resolve the case, including reasonable cost and attorney's fees.

Geneva Ridge, owners of 718 acres of land on the southeast side of the city and also known as Hummel, is suing the city for $123 million, claiming their case "arises from unlawful conduct by certain city officials who control the local government." They say it involves a "systematic and ongoing pattern of intentional unequal treatment of Geneva Ridge Joint Venture from others similarly situated without any rational basis. These city officials individually and collectively have abandoned and ignored legal obligations of their elected offices, as well as the rules, regulations and procedures of their own municipal zoning ordinances."

Mirbeau is suing the city of Lake Geneva for $29 million alleging similar activities against the city as Geneva Ridge. Mirbeau and Geneva Ridge had teamed together to try to develop the 718 acres of land, to include an inn and winery. Later, Geneva Ridge went on its own to develop the land. All development efforts failed and the court cases ensued.

The Mirbeau case took a hit this past November when some of the defendants were dismissed from the claims and Stadtmueller suggested "both parties should contemplate whether this case, which unlike fine wine, is not improving with age, can be resolved short of this court further involving itself in the process. Such an alternative may prove to be far less costly and may, in the end resolve competing concerns and interests of the remaining parties."

Earlier this month, one attorney involved in the case said it is unclear where the mediation conference will take the case.

"At this juncture, it means only that the parties would like to pause the formal litigation to see whether there is any avenue for informal resolution," wrote Joe Wirth, of Piper & Schmidt, one of the attorneys representing the city of Lake Geneva. "If there is a way to pursue a resolution of the dispute informally, then both sides will make a good faith effort to do so. If the sides cannot resolve the issues informally, then the formal litigation will resume."

Wirth also stated in an e-mail the reasons for the mediation efforts.

"Before the Geneva Ridge case gets to the point where parties invest additional money in litigation, they wanted to see whether this was a good time to discuss compromise," he wrote. "The only way to pause the legal proceedings is to ask the court for an opportunity to mediate. The court agreed."

A recap

The Geneva Ridge property was annexed to the city in early 2005 and the developers proposed three different development plans for the property formerly located in Linn Township. None of the plans — including a venture that involved New York-based Mirbeau of Geneva Lake to include a 100-room inn, spa and winery — received final approval from city officials.

Geneva Ridge accuses city officials of engaging in racketeering activity as defined by state laws. They may seek an additional $247 million in damages, which is twice as much as the damages Geneva Ridge has cited in its federal suit against the city.

That notice claims racketeering activity, including misconduct in office, tampering with public records and notices, false swearing, perjury and threats to injure, occurred with the intent to "inflict economic harm and delay upon the Geneva Ridge, who is the victim, so as to abet an accomplice of the (city officials) in obtaining ownership of the property of Geneva Ridge."