After a few technical hiccups, the city of Mercedes will continue to be represented by the two attorneys who have been pleading the city’s case for the last year in a series of lawsuits against former City Attorney Juan R. Molina — at least, if the Texas Attorney General approves.
That was the news after the Mercedes City Commission voted unanimously Tuesday night to continue the services of Anthony Troiani and Mark Sossi in the lawsuits on a contingency fee basis, versus an hourly basis.
The duo, who have served together as Mercedes’ city attorneys since 2019, have been representing the city in the lawsuits since their filing in state district court.
“There’s actually kind of two things that you’re approving here,” Mercedes interim City Manager Kevin Pagan explained to the commission.
“One is the resolution, which is the package and has the findings required by the government code. And then the other is… you’re approving the contract itself so that we can send it on up to the attorney general up for approval. And this will get that part of the process going,” he said.
Troiani and Sossi filed the first of three suits against Molina and a host of other defendants in April 2020. The remaining two were filed in the weeks shortly thereafter.
The trio of suits allege that Molina committed fraud and broke his fiduciary and legal duties to the city in a series of land sales he helped facilitate while serving as city attorney a decade ago.
Two other lawsuits filed in late 2019 involve a business developer who in 2018 sought to build a microbrewery and retail center in the city — a project that would have meant a $7 million investment in Mercedes.
But the litigation has become a costly burden for the city to bear, especially after the last several years have seen the municipal budget stretched thin.
Nonetheless, the city has remained committed to vigorously pursuing the lawsuits in the hopes of recovering some of the hundreds of thousands of dollars it says it has lost to the various boondoggles.
By moving to change the payment structure for the attorneys, city leaders hope to save money that would have been spent on billable hours, and instead invest it back into city improvements.
As an added benefit, the contingency fee structure would reduce the city’s financial liabilities should the lawsuits go sideways.
“If the lawsuits do not produce a recover for the city, then the city is… the taxpayer is not out any money. And that risk is borne by the attorneys that have agreed to do it on that basis,” Pagan explained.
Under the agreement, Troiani and Sossi will take up to a 35% cut of any damages or funds recovered as part of the lawsuits, Pagan explained.
The two attorneys will also continue to serve as city attorneys, with pay for those services based hourly.
However, it remains unclear how long the duo will continue to serve in that capacity. Their city attorney contract expires sometime this month — the exact date of which also remains unclear.
In a meeting late last month, Pagan revealed that the two attorneys had confirmed to him they would not be seeking a renewal of their contract. Instead, they’ve agreed to continue serving as city attorneys on a month-to-month basis until the city secures new representation.
An effort to begin the process of searching for new general counsel died during that same meeting, however, after uncertainties over the contingency fee agreement remained unresolved.
Those uncertainties revolved around a newly amended state law which outlines a series of requirements that must be met before a city can enter into a contingency fee agreement for legal services.
Those requirements include providing public notice explaining the reason why the city wants to enter into such an agreement. And it requires that the commission-approved agreement be forwarded to the AG’s office for review.
With Tuesday’s unanimous vote, that review process can now begin. The attorney general has 90 days to potentially raise objections to the contingency contract. If no word is heard after that timeframe, the agreement is considered approved.
In other city business, the commission also unanimously voted to continue the services of Pagan as interim city manager for another 30 days.
His three-month contract was originally set to expire April 3.
The city’s search for a permanent city manager is nearing a close, however, as a final shortlist of candidates are expected to be interviewed next week.
