Wednesday, October 1, 2008

While the city of Key West awaits word on how much it owes the owner of the defunct Duck Tours Seafari in legal damages, it will start paying some of the attorney's fees associated with the protracted legal battle over the city's exclusive franchise agreement with Historic Tours of America.

City Attorney Shawn Smith on Tuesday will recommend that city commissioners approve a $300,000 payment to Duck Tours attorneys, who won a November 2007 appeal of a previous circuit court decision in favor of the city.

In winning the appeal and convincing a judge that the city's exclusive tour agreement granted monopoly rights to Historic Tours of America (HTA), attorneys for Duck Tours owner John Murphy are entitled to attorney's fees paid by the city.

Although the appellate court in November ruled against the city for violating antitrust laws, it also provided some relief for Key West when it ruled the previous $13.5 million the city owed Murphy for damages and lost revenue had been calculated incorrectly.

A new trial will recalculate those damages to determine what the city owes Murphy, who says the city forced him out of business in 1995 to honor exclusive agreements with HTA, which operates the Conch Tour Train and Old Town Trolley. Duck Tours was a similar sightseeing tour of the city, but in amphibious vehicles.

In the meantime, Smith has negotiated the $300,000 settlement for appellate attorneys' fees, meaning they are the costs associated with the appeal, not the initial lawsuit.

Four attorneys sought a total of $596,356 in attorney's fees, although Smith disputes about $48,000 of that, which is interest that was accruing before the judgment.

Smith negotiated during a mediation session and the attorneys agreed to settle for $300,000, which the city must pay by the end of October.

The Key West City Commis-sion will consider the settlement agreement at its meeting Tuesday.

mbolen@keysnews.com