Decades-old lawsuit settled
By Kevin Kelley
Westlake
Published Nov. 26, 2008

A decades-old lawsuit that played a part in changing the political landscape of Westlake has been settled, city officials said.

The legal disputes between the city and local businessman Charles D. Shimola date back to the 1980s and revolve around Shimola’s plans to develop properties he owns in Westlake.

Under the settlement, the city will pay Shimola $15 million. The city will obtain a motel and a portion of a shopping center property now owned by Shimola. The city will provide Shimola with a sewer easement for an existing sewer serving the shopping center property that Shimola will retain.

The agreement also calls for Shimola to expand an existing auto body shop and develop 13 single-family homes on property south of the auto body shop.

At its Nov. 6 regular meeting, City Council unanimously approved an ordinance allowing the city to enter into the settlement agreement.

The city had alleged over the years that Shimola sought to develop his properties without proper approval from the city. City officials also maintained that Shimola failed to properly maintain his properties, which they said were in “deplorable conditions.”

For his part, Shimola alleged in his lawsuit that the city’s actions against him resulted in lost income. His attorney, William Wuliger, described the city’s actions as a “senseless, stupid” vendetta against his client.

“They have kept him out of business in the boom times of the 90s,” Wuliger said in an interview with West Life.

In 1998, a Cuyahoga Common Pleas Court jury found that the city had breached a 1993 court agreement stating that the city would refrain from interfering from Shimola’s development of his property and act in good faith. The jury awarded Shimola damages of $2.5 million, but the judge reduced the damage amount.

In 2000, the 8th District Court of Appeals upheld the jury’s finding but overruled the judge’s reduction of the damages. The appeals court called for a new trial solely on the issue of damages.

 In September 2004, an arbitration panel ruled that the city had to pay $560,000 in damages to Shimola, who had sought $48 million in damages before the arbitration panel. But the panel’s ruling was later overturned in court. That’s because, according to Wuliger, the city’s attorneys improperly attempted to retry the entire case before the arbitration panel.

Westlake Law Director John Wheeler called the city’s agreement to the settlement a “courageous” step because the case has been before the courts for so long and so much money has been spent on it.

“The city decided, ‘Let’s finally resolve these issues,’” Wheeler said.

Without a settlement, litigation could have continued for at least another three to five years, Wheeler said.

Shimola lost up to $120 million due to the city’s actions, according to his attorney.

“Wheeler probably saved the city from going bankrupt,” Wuliger said.

Wuliger expressed disappointment at not having the opportunity to try the case in court. However, his client, a lifelong Westlake resident, did not want to cause further hardship on his fellow Westlake residents, Wuliger said.

The settlement, which Wheeler stressed was comprehensive, benefits the city by providing finality, a full general release of the city and related persons, and resolution of all monetary issues, including attorneys’ fees, Wheeler told West Life.

Attorneys for both parties are currently working on a final, detailed settlement agreement, Wheeler said.

The Shimola case came to the public’s attention during the 2004 debate over whether to make the law director’s job an elected rather than appointed position.

Opponents of Mayor Dennis Clough successfully placed before voters an amendment to the City Charter that would have voters choose the city’s law director, who had been nominated by the mayor. As part of their argument for electing the law director, opponents of Clough argued that the city had mishandled the Shimola case.

The city’s law director at the time, David Harbarger, had hired outside legal assistance from his own law firm, Roetzel & Andress, to work on the Shimola case. Clough and Harbarger argued that the complexity of the case required the outside, expert legal assistance. City Council also approved the legal outsourcing, they noted.

The mayor’s opponents argued that the money for outside legal help was not necessary and that the city had an opportunity to settle the Shimola case earlier. An elected law director would have been more accountable and responsible with the taxpayers’ money, they argued.

Despite the mayor’s opposition, in November 2004 Westlake voters approved the Charter amendment that made the law director an elected position, 55 to 45 percent.

In November 2005, Wheeler, who had been appointed law director when Harbarger resigned, was elected law director. Wheeler, who received Clough’s endorsement, defeated John Spellacy, 52 to 48 percent.

In an interview with West Life last week, Wheeler repeated the city’s claim that the Shimola case was extremely complex, calling it the most complicated case he’s come across in 31 years of practicing law.

“I’ve never seen a case like this,” Wheeler said.

The length of the case’s history, as well as issues such as the determination of damages, zoning and expansion of the use of property contributed to its complexity, Wheeler said.

Wuliger, however, disagreed with that analysis.

“To me, it’s a pretty simple case,” he said. Rather, the case was one where people in power abused that power to prevent Shimola from conducting business, he said.

Previous West Life articles:

• How to hire a law director (Oct. 20, 2004)
• Harbarger resigns as law director (Jan. 12, 2005)
• Candidates face off at LWV forum (Sept. 28, 2005)