The city of Orange Beach has been ordered to pony up more than $3.7 million — or somewhere in the neighborhood of $600 per resident — after a Baldwin County jury determined building officials unfairly discriminated against a property developer in 2016.
Orange Beach resident and property developer Ian Boles claimed he was building an eight-bedroom duplex on Perdido Beach Boulevard in 2016 when he asked the city for a routine electrical inspection so a power meter could be installed on the unit. The city refused, citing Boles’s failure to provide the Finance Department with a list of companies and individuals involved in the project’s construction, and the amount each contractor was paid.
Boles agreed to give the city the list of individuals and companies, but declined to disclose how much he paid them. Boles argued it was none of the city’s business how much each contractor was paid, adding the city and/or Landon Smith, the city’s chief building inspector, “exceeded their authority” by requesting such information.
“They have no legal basis for which to request such information, and refusing to inspect the premises on ground that it is not provided further demonstrates a misappropriation of power wielded over the citizens of Orange Beach and Baldwin County,” the plaintiff’s fourth amended complaint in 2018 read.
Boles further claimed the city’s inaction on his inspection caused a delay of nearly two years on the project, causing “serious financial damages, as well as mental anguish and distress.”
When the court eventually ordered the city to complete the inspections in 2018, Boles claims Smith “directed his inspectors to subject Boles to more extensive inspections, require further information than legally obtainable and inject themselves into the relationships between Boles and his current subcontractors, future subcontractor and future prospective business partners.”
The delays also affected Boles’s mortgage on the property, as he allegedly settled for a higher interest rate than was available if the project had been completed on schedule. According to the complaint, Boles was also briefly hospitalized from the stress of the situation.
“It comes down to two parts: whether the building department had the authority to delay the inspections — it did not — and the damages they caused,” said Thomas Pilcher, Boles’s attorney. “The city had a duty to inspect.”
A two-week trial began in Judge Scott Taylor’s courtroom earlier this month and on Friday, after just a couple hours of deliberation, the jury issued a verdict in favor of Boles. The damages amounted to $792,247 in lost rental income, $343,917 in lost holding costs, $2,375,955 in lost future profits on another duplex that was never constructed, and $267,881 for the cost to consolidate a loan on the property, for a total judgment of $3,780,000.
On Monday, Orange Beach Mayor Tony Kennon said the city intends to appeal the verdict, but he refused to answer detailed questions about the case until he consulted with attorneys, while he also requested to hear what statements Boles made to a journalist before commenting.
On Monday, Boles told John Mullen of OBA Community Website he was on the stand for two and a half days during the trial and afterward, some members of the jury wanted to personally meet him to reiterate their support. More than six current or former city employees also testified.
“We had city officials who gave us a sworn oath two years ago, then when they went to the jury they changed their story,” Boles said.
He also said Kennon was aware of the problem.
“I sent [Kennon] quite a few emails and he said [Smith] does this to everybody, which he doesn’t,” Boles said.
Smith worked for the city for 21 years until he suddenly resigned the day before the trial started. Kennon would also not answer questions about Smith’s resignation. Named separately as a defendant in the case, Smith reportedly reached his own settlement with the plaintiff.
Kennon did briefly defend the city’s building requirements, including the disclosure of contractors’ financial information.
“We have certain licenses that need to be purchased if repairs or construction exceed a dollar amount, so it’s a legitimate ask,” he said.
Pilcher said for the purposes of the complaint, it was not necessary to argue or determine the city’s motive.
The city is currently facing a number of civil lawsuits over growth and development, including at least one other in which Smith was named as a co-defendant. Last August, the city, Smith and developer Brett-Robinson were sued by the Palm Beach Condo Owners Association, who claim the ongoing development of Phoenix Gulf Towers next door to their property involves improper construction techniques, damaging the 100-unit Palm Beach and “threatening injury and death to tenants.”
Attorney Adam Milam, who is representing Palm Beach, said the building is currently stable and fit for occupancy, but expansion joints have shifted since construction began and cracks have developed in some walls and floors. The building is being constantly monitored by sensors. Next month, Judge Taylor will consider a motion to pause construction, which Milan predicts will be “vigorously contested.”
Separately, former county attorney Danny Blackburn sued the city last year for its short-term rental moratorium in 2018. A federal judge recently dismissed his federal claims and remanded the case to state court. In 2019, the city was also sued over excessive impact fees allegedly charged to some homebuilders, while the developer of Turquoise Place also sued the city, claiming it reneged on the terms of a development agreement.
Kennon said he doesn’t believe an adverse ruling in the Boles case foreshadows similar action in the others and was dismissive of a suggestion the lawsuits hinted at bigger problems in the city.
“Everybody is looking to sue somebody,” he said.
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