School district spends staggering $167K in lawsuit; Should taxpayers pay attorney fees?

FREDONIA (WITI) -- A small town school board blows six figures on a simple lawsuit. Now, a judge has to decide whether taxpayers should pay the other guy's attorney fees.

Mom always said "money doesn't grow on trees," so when school officials in the small town of Fredonia let a garden-variety lawsuit grow out of control, it was taxpayers like Carol Murphy who had to foot the bill.

"They should just drop it. You know, it doesn't make sense," Murphy said.

The Northern Ozaukee School District has already spent a staggering $167,000 in legal fees on a lawsuit over an $8,000 storm-water dispute.

"They got nothing. They got a big goose egg," Kendall Thistle said.

That figure could have grown to nearly a quarter million dollars, but a judge's decision last month should limit the exposure to taxpayers.

"It simply doesn't make any sense anymore," School Board President Paul Krause said.

"You can`t imagine the amount of stress that gets put on a family for this lasting for so long," Thistle said.

Thistle says it all started back in 2006, when a new residential development caused excess storm water to flow across the school's property and onto his. So Thistle built a berm to protect his farm. The school district says that berm caused flooding on school property.

"We had a potential hazard for students," Krause said.

The school district spent $8,000 to drain the pond and prevent it from forming again. In February of 2011, the school board voted to sue the Thistles to recover the money.

"We also sought to remove the berm permanently," Krause said.

It was a relatively straightforward nuisance claim, but for one rather unusual fact -- Thistle isn't just the school's next-door neighbor. He's also on the school board.

"Quite frankly, I viewed him as a mentor, so the board had to wrestle with some very difficult decisions whether or not to pursue a lawsuit," Krause said.

The more complicated things got, the more expensive the lawsuit became. After years of delays, motions, battles over open records and dueling expert reports, the legal bills had exploded -- growing to 20 times the amount the district could hope to recover, even if it won.

"Certainly, it's gone on longer than we would like and cost much more than we would like," School Board Vice President Stacie Stark said.

In May, more than three years after the lawsuit was filed, the school board voted to voluntarily dismiss its own case.

"You have to continually look at that cost-benefit analysis," Superintendent Blake Peuse said.

"Maybe one of the tougher choices is to know when to walk away," Krause said.

Thistle said not so fast.

"They wanted to just walk away and we should just walk away," Thistle said.

According to court records, Thistle and his family have spent more than $80,000 of their own money defending the lawsuit, and he wanted the school to pay it all back.

"You should pay our costs for dragging us through this," Thistle said.

In May, Ozaukee County Judge Paul Malloy scolded the district -- calling the lawsuit "imprudent, saying it "never should have gotten this far," and that board members will "need to answer to their electorate."

"That's pretty severe when he says that," Thistle said.

Last month, Malloy denied Thistle's request for reimbursement of his actual legal expenses, saying the case didn't amount to over-litigation. In other words, Thistle won't get anywhere near the full $80,000 he was asking for.

"My wife and I and our family, we`re taxpayers also. And at some point, the elected officials need to be held accountable for their actions," Thistle said.

Thistle says he is still considering his legal options. Meanwhile, Superintendent Blake-Peuse just wants to move on.

"It certainly would be nice to place this behind us," Blake-Peuse said.

For an institution that exists to educate, this was one expensive lesson.

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