Loading...
R-1257 - 05/28/2013 - TAX - Resolutions Supporting Documents ITEM 10.1). OF Oqk V. e90 O O co G � O COUNI�t' AGENDA ITEM Regular Board of Trustees Meeting of May 28, 2013 SUBJECT: Hotel Tax/Internet Travel Companies Litigation FROM: David Niemeyer, Village Manager BUDGET SOURCE/BUDGET IMPACT: RECOMMENDED MOTION: N/A Background/History: On April 23, the Board approved a legal service agreement with several law firms in regards to the collection of hotel room taxes we believe is owed to us by internet travel companies. Internet travel companies buy blocks of hotel rooms from hotels at a discounted rate and then sell them to hotel guests at a higher rate. They have been charging tax on the rate that they pay the hotels, not what they charge the hotel guests. Over 200 municipalities in several states have sued these internet travel companies to attempt to collect back taxes on what the internet travel companies charge hotel guests, not what the company pays for the room. It has been requested that before we sign the agreement with these firms that we investigate a successful legal case that Rosemont undertook a few years ago. Peter Friedman has had some conversations with Rosemont's attorney about this case which he will report on. In addition, Sharon Dangles was able to get a copy of the legal agreement Rosemont signed with their attorneys, which is attached. According to Rosemont, they have not yet paid the attorneys as they have not collected any past tax revenues as of yet and the attorneys are paid on a contingency basis. Recommendation: Last saved by dbettin J:Wgenda Items\hotel on line litigation 5-28-13.doc Last printed 5/24/2013 11:46 AM a ' EXHIBIT«A» I i ATTORNEYS I PRIVACY NOTICE i Attorneys, like other professionals who advise on financial matters, are required by federal law to inform their clients of their policies regarding the privacy of client information. Attorneys have been and continue to be bound by professional standards of confidentiality that are even more stringent than those required by federal law. In the course of providing our clients with certain advice, the Attorneys may receive nonpublic financial information from our clients,their accountants and other representatives.All nonpublic information we receive regarding our clients or former clients is held in strict confidence in accordance with our professional obligations and is not released to people outside of our law firm, except with the client's consent or as required by law. We may share certain information with third parties who assist us in providing our services to our clients, as permitted by law, subject to the obligation that these third parties not use or disclose such information for any other purpose. We retain records relating to professional services that we provide so that we are better. able to assist you with your professional needs and, in some cases,to comply with professional guidelines.In order to guard our client's nonpublic information from unauthorized disclosure,we maintain physical, electronic and procedural safeguards that comply with our professional standards. 14 LEGAL SERVICES AGREEMENT BETWEEN THE VILLAGE OF ROSEMONT AND HAGENS BERMAN SOBOL SHAPIRO, LLP This Agreement is entered into by and between The Village of Rosemont ("Client") and Hagens Berman Sobol Shapiro, LLP ("Attorneys") on this 2nd day of March, 2010. 1. Authorized Representative of Client. Client designates Peter M. Rosenthal, Esq. of the firm Rosenthal, Murphey, Coblentz &Donahue as the authorized representative to direct Attorneys and to be the primary individual to communicate with the Attorneys regarding the subject matter of Attorney's representation of Client under this Agreement. This designation is not intended to preclude communication between Attorneys and other representatives of Client. 2. Legal Services to be Provided. Attorneys shall represent the Client in litigation against certain internet travel companies that underpay hotel taxes to the Client under applicable laws. If Client wishes to retain Attorneys for any purpose not specified under this Agreement,the parties must execute a separate written agreement for those services. 3. Responsibilities of Parties. Attorneys will perform the legal services called for under this Agreement, keep client informed of progress and developments, and respond to Client's inquiries and communications. Client will cooperate with Attorneys and keep Attorneys reasonably informed of any developments. Client will also make all necessary persons under its control available for consultation, depositions, hearings and trial at no cost to Attorneys. Client will likewise make all documents,records, or.other evidence under its control available to Attorneys for this case at no cost to Attorneys. 4. Forum of Litigation. Attorneys and Client will agree on the appropriate forum in which to bring this action, including the issuance of an assessment or performing other administrative procedures prior to instituting litigation. Should such administrative procedures be advisable, Attorneys will prepare the appropriate paperwork. In order to lower expenses, Client agrees to participate in a joined action with other cities or counties from the State of Illinois. 5. Attorneys'Fees. Attorneys will receive Attorneys' fees for the services that they provide under this Agreement on a contingent fee basis of any recovery. The term "recovery" shall include,without limitation, the then present value of any monetary payments awarded by the court or arbitrator or agreed to by the adverse parties or their insurance carriers. Client agrees to pay the following percentage of any recovery: Commencement of Discovery Through Briefing engagement to on Summary Judgment Pre-trial Proceedings and Amount of Recovery start of fact discovery Motions Trial Through Appeal First$5 million 18.33% 27.50% 30,00% Next$5 million 16.67% 25.00% 27,50% All amounts over$10 million 11.67% 17.50% 20.00% These amounts are cumulative (i.e. if$15 million is recovered prior to the start of fact discovery, the attorneys fee would be 18.33% of the first $5 million plus 16.67% of the second $5 million plus 11.67% of the third $5 million). These percentages are applied on a "net" basis, after the deduction of any expenses from settlement proceeds. Attorneys will notify Client in writing at the time the contingency fees increase from one column to the next. 6. Costs. Attorneys agree to advance all reasonable costs of the litigation or any administrative proceeding. Costs include,but are not limited to: expert fees and expenses, investigation costs, deposition expenses, court costs, filing fees and travel and lodging expenses. In the event of any recovery, Client agrees to reimburse Attorneys for all Costs advanced by Attorneys. In the event that there is not a successful outcome, Attorneys agree that no costs will be charged to Client. 7. Division of Attorneys'Fees. Attorneys may divide the Attorneys' Fees received for the legal services provided under this Agreement with additional attorneys or law firms retained as associated counsel, including but not limited to local counsel in the jurisdiction in which any proceeding is filed. Client must approve in writing of any associated counsel before associated counsel performs any work on behalf of Client. Attorneys shall disclose to Client the terms of the attorneys' fee division and the responsibility for advancement of costs. Associated counsel shall have the rights and responsibilities of Attorneys under this Agreement. 8. Supersedes Agreement With Lovell Mitchell& Barth, LLP. This agreement supersedes the prior agreement with Lovell Mitchell &Barth,LLP, It is understood that Karl Barth is currently employed by Hagens Berman Sobol Shapiro LLP. Lovell Mitchell &Barth, LLP will be phased out and will no longer represent clients in ongoing litigation. Accordingly, the Village wishes to retain Mr. Barth's new firm to represent it in the ongoing litigation in both state and federal court against certain online travel companies. The prior agreement with Lovell Mitchell &Barth, LLP is hereby voided, and any attorneys' fees payable to Lovell Mitchell &Barth, LLP will be the responsibility of Hagens Berman Sobol Shapiro LLP and not the Client. 9. Settlement Authority. Attorneys will not settle Client's claim without approval of Client, who will have the absolute right to accept or reject any individual settlement offer. 10.Notices. All written notice and communications to Client relating to this Agreement shall be mailed or personally delivered to Peter M. Rosenthal, Esq., Rosenthal, Murphey, Coblentz &Donahue, 30 North LaSalle Street, Suite 1624, Chicago, IL 60602. All written notice and communications to Attorney shall be mailed or personally delivered to Steve W. Berman, Esq. and Karl Barth, Esq., Hagens Berman Sobol Shapiro, LLP, 1918 Eighth Ave., Suite 3300, Seattle, WA 98101. 11.Entire Agreement. This Agreement contains the entire agreement between the parties. No other agreement, statement or promise made on or before the effective date of this Agreement will be binding on the parties. 12.Severability. If any provision of this Agreement is held in whole or in part to be unenforceable for any reason, then the remainder of that provision and of the entire Agreement will be severable and remain in effect. 13.Modification. This Agreement may be modified by subsequent agreement of the parties only by an instrument in writing signed by both of the parties. THE VILLAGE OF ROSEMONT HAGENS BERMAN SOBOL SHAPIRO, LLP By By Bradley Stephens, Mayor Steve W. Berman, Managing Partner LOVELL MITCHELL & BARTH, LLP B Y -V9,9 Karl P. Barth, Managing Partner Chicago Daily Law Bulletin-The City's No. 1 Source for the Law Profession 4/24/13 5:07 PM tale€ 4AU,UPCASE,CALENDAR& 1VQ,W,rth-ijNTSUWt^.)N JuraLaw.com J u r "LAW V"'Ehica40-- Dailu haw ljultt Travel sites owe Rosemont taxes on hotels October 17, 2011 By Patricia Manson—pmanson(k'lbpc.com Law Bulletin staff writer The fees that online travel companies charge for booking hotel rooms in Rosemont are subject to a tax imposed by the village, a federal judge has ruled. In an opinion Friday, U.S. District Judge Ronald A. Guzman rejected the notion that the tax imposed under Rosemont Ordinance § 10-23(a) applies only to the net rate that an online company pays a hotel or motel for a room. Instead, the hotel tax applies to both the net rate and the additional amount the company charges the customer for whom it reserves the room, Guzman said in his opinion. Guzman granted summary judgment in favor of Rosemont in a lawsuit the village brought seeking hotel taxes allegedly owed by seven online companies. Guzman said the parties in the case should be prepared to discuss the "final disposition of the case" at the next status hearing. An attorney for Rosemont, Paul M. Weiss of Freed & Weiss LLC, said the amount of taxes owed by the online companies was a "hotly contested" issue. But Weiss predicted that the companies ultimately will be ordered to pay millions of dollars to Rosemont. In his opinion, Guzman said the Rosemont ordinance requires the owner of a hotel or motel to collect a tax of 7 percent of the rental rate for a room and to then remit that tax to the village. Guzman said the ordinance defines "owner" to include any entity that receives consideration http://www.chicagolawbuIletin.com/Elements/pages/print.aspx?printpath=/News-Extra/2011/10/17407&classname=tera.GN3Article Page 1 of 3 Chicago Daily Law Bulletin-The City's No. 1 Source for the Law Profession 4/24/13 5:07 PM for arranging the rental of a hotel or motel room. Online companies receive such consideration from their customers in the form of the net rate that they pass on to the hotel and the fee for arranging the rental that they keep for themselves, Guzman said. Guzman rejected the argument that the fee is not part of the rental rate because it purportedly represents payment for an online company's services rather than for the use of the room. "Because the record establishes that defendants' customers cannot occupy hotel rooms in Rosemont unless they pay the full amount defendants charge, defendants' fees and markups are part of the rental rate subject to the tax," Guzman wrote, citing Expedia Inc. v. City of Columbus, 681 S.E.2d 122 (Ga. 2009), and Louisvillel Jefferson County Metro Government v. Hotels.Com LP. 590 F.3d 381 (6th Cir. 2009). Guzman also rejected the argument that Rosemont's hotel tax is a sales tax and therefore cannot be imposed on the cost of the websites' services. Citing cases that included Commercial National Bank of Chicago v. City of Chicago, 432 N.E.2d 227 (Ill. 1982), Guzman conceded that services must be taxed by an occupation tax rather than a sales or use tax. But a sales or use tax is imposed when "the substance of a transaction is the sale or use of property and the service provided is merely incidental to it," Guzman said, citing Mr. B's Inc. v. City of Chicago . 706 N.E.2d 1001 (Ill. App. Ct. 1998). And citing cases that included Marcus Corp. v. Village of South Holland, 458 N.E.2d 112 (Ill. App. Ct. 1983), Guzman said Illinois courts have held that a tax imposed "on the privilege of renting or using a hotel room" is a use tax. "Here, defendants' facilitation of travel-related services, i.e., providing room rates for multiple hotels on their websites, confirming with the hotel that there is an available room, etc., are incidental to the predominant purpose of the online transaction—the rental of a hotel room," Guzman wrote, citing Springfield Hotel-Motel Association v. City of Springfield, 457 N.E.2d 1017 (Ill. App. Ct. 1983), and Katz v. City of Chicago. 532 N.E.2d 322 (Ill. App. Ct. 1988). "Because the transactions in this case are for the use of tangible personal property, not services, the hotel tax is a valid use tax, not an impermissible occupation tax." Guzman issued his ruling in Village of Rosemont, Illinois v. Priceline.Com Inc., et al. No. 09 C 4438. In addition to Weiss, the lead attorneys for Rosemont are Karl P. Barth and Steve W. Berman, both of Hagens, Berman, Sobol, Shapiro LLP in Seattle. http://www.chicagolawbulietin.com/Elements/pages/print.aspx?printpath=/News-Extra/2011/10/17407&classname=tera.GN3Article Page 2 of 3 Chicago Daily Law Bulletin-The City's No. 1 Source for the Law Profession 4/24/13 5:07 PM Defendants Priceline.com Inc. and Travelweb LLC are represented by attorneys with Skadden, Arps, Slate, Meagher & Flom LLP who include Albert L. Hogan and Nick D. Campanario. The lead attorneys for defendants Travelocity.com LP and Site59.com LLC are Luke DeGrand of DeGrand & Wolfe P.C. and Stacy R. Russell and Stacy S. Russell, both of Kelly, Hart & Hallman LLP in Houston. The lead attorneys for defendants Travelocity.com LP and Site59.com LLC include Luke DeGrand of DeGrand & Wolfe P.C. The defendants did not have a comment by early afternoon today. ©2013 by Law Bulletin Publishing Company.Content on this site is protected by the copyright laws of the United States.The copyright laws prohibit any copying,redistributing,or retransmitting of any copyright-protected material.The content is NOT WARRANTED as to quality,accuracy or completeness,but is believed to be accurate at the time of compilation.Web sites for other organizations are referenced at this site,however the Law Bulletin does not endorse or imply endorsement as to the content of these web sites.By using this site you agree to the Terms Conditions and Disclaimer. http://www.chicagolawbuIletin.com/Element s/pages/print.aspx?printpath=/News-Extra/2011/10/17407&classname=tera.GN3Article Page 3 of 3 LEGAL SERVICES AGREEMENT THIS AGREEMENT{hereinafter referred to as the"Agreement") effective this^day of 2013, by and between the Village of Oak Brook, an Illinois municipal corporation(hereinafter referred to as the"Village"),and Robert K.Finnell,the Bird Law Group, P.C., the Crongeyer Law Firm, P. C., the Clifford Law Offices and the law firm of Peterson, Johnson&Murray Chicago,LLC(hereinafter referred to as the"Attorneys"). i WHEREAS, the collection of unremitted taxes due and owing to the Village under the Village's Hotel/Motel Room Tax, asamended,and all other applicable provisions relating to the provision of hotel or lodging accommodations by corporations who offer and sell/rent such accommodations over the inte net require the services of additional attorneys to represent the Village, WHEREAS, the corporate authorities of the Village deem it desirable and in the best interest of the Village to enter into this Agreement with the Attorneys to provide for the terms and conditions of their employment; NOW, THEREFORE, IT IS MUTUALLY AGREED between the Villagge and the Attorneys,as follows: 1. The Village employs the Attorneys to conduct and administer the following services. A. diligently pursue unremitted taxes due and owing to the Village under the Village's Hotel/Motel Room Tax, as amended and all other applicable provisions relating to the provision of hotel or lodging accommodations by corporations who offer and sell/rent such accommodations over the internst;and B. assist the Village in pursuing non-filing, audit, assessment or other administrative processes, as needed, and in filing litigation pleadings including appeals and representing the Village as necessary and as requested and approved in connection with unpaid taxes and seeking the recovery of past, present and future taxes, interest and penalties against any parties responsible for filing, remittance or payment of such taxes, including any intermediaries, agents or clearing houses on behalf of the Village 2. The Attorneys shall perform the services with reasonable care, in a manner. satisfactory to the Village and in accordance with all applicable laws and professional standards. The Attorneys shall function hereunder as independent contractors and not as employees of the Village. The Attorneys shall perform the services until such time as the services of the Attorneys are terminated as provided herein. The responsibility to be assumed by each attorney is as follows: A. Robert K. Finnell, shall have primary responsibility for representation of the Village, 1 B. the Bird Law Group, P.C., shall have primary responsibility for representation of the Village. C. the Crongeyer Law Firm, P C., shall have primary responsibility for representation of the Village. D. the Clifford Law Offices, shall have responsibility as local counsel;and E, Peterson, Johnson & Murray Chicago, LLC, shall have responsibility as local counsel. 1 The Attorneys shall cooperate with the Village Board members of the Village, its staff and its consultants, and, subject to the general direction of the Village Board, shall communicate and/or meet with staff members and consultants during normal business hours or otherwise, as shall be mutually convenient, whenever such communication and/or meetings are necessary for the conduct of the Attorneys' services. 4; The Village shall assist and cooperate with the Attorneys and shall promptly supply such information, documentation and persons as may be requested by the Attorneys to permit the Attorneys to effectively advocate the Village's interests. The Village shall provide the Attorneys reasonable access,during the normal business hours,to all files,and other information not privileged or confidential, necessary for the Attorneys to perform the services under this Agreement; or the Village shall allow the Attorneys' personnel reasonable access, during the normal business hours, to the Village's records, files, properties for research and any other information not privileged or confidential necessary for the Attorneys to perform the services get forth in this Agreement. 5. Any documents, data, records, or other information relating to the legal representation of the Village and all information secured by the Attorneys from the Village in connection with the performance of legal services, unless in the public domain or unless disclosure is required by law, shall be considered attorney-client privileged, when applicable, and kept confidential by the Attorneys, The information shall not be made available to third parties without written consent of the Village, -unless so required by valid court order. In addition,the Attorneys' Privacy Notice is attached hereto as Exhibit"A"and made a part hereof. 6. The Attorneys shall maintain all records relating to the performance of its services under this Agreement which would be subject to inspection and copying under the Freedom of Information Act (5 ILCS 140/1 a, seg) in compliance with the requirements of the Local Records Act(50 ILCS 20511 et seg)and the Freedom of Inforination Act(5 ILCS 140/1 et seg,) until the conclusion of the services and the payment of the fee-and costs hereunder or-until written approval for the disposal of such records is obtained from the Local Records Commission. The Attorneys shall make available to the Village such records and cooperate fully with the Village with any request for public records made pursuant to the Freedom of Information Act (5 ILCS 140/1 et seg.)by providing full access to and copying of all relevant 11011-exempt records within a time period which allows the Village to timely comply with the 2 time limits imposed by the Freedom of Information Act (5 ILCS 14011 et seq). .All reports, documents, data and other material constituting the work product of the Attorneys hereunder shall become the property of the Village, subject to the applicable attorney's lien: Title thereto, free of such lien, shall transfer to the Village following payment in full of any sums due to the Attorneys. The Attorneys, however, shall have the right to maintain for their own files and use copies of such reports,documents,and other materials constituting the Attorneys'work product, i 7 Current communication technology, including, but not limited to, cellular telephones, electronic mail and facsimile transmission, contains certain inherent security risks that the information will be intercepted by third parties with no right to hear or see it. Unless otherwise notified by the Village, the Attorneys will use current communication technology to communicate with the Village with the understanding that by agreeing to the use of any means of communication other than in-person private meeting or two-way(as opposed to multi-party) land line telephone conversations,the Village will be giving its consent to,and accepting any risks of disclosure of, confidential information to third parties that may be attendant upon the use of those means of communication. 8. The Attorneys shall perform the legal services and the Village shall compensate the Attorneys for such legal services on a contingent fee basis as follows: A. if the Attorneys achieve a settlement agreement within thirty (30) days of an initial demand letter, the Attorneys shall receive a contingent fee of twenty-five percent (25%) of the Gross Recovery, as defined below,plus the cash expenditures advanced and expenses incurred by the Attorneys on behalf of the Village, B. If settlement is not achieved within thirty (30) days of an initial demand letter the Attorneys shall file suit"and the Attorneys shall, upon final judgment after trial or any ensuing appeals or settlement with respect to any defendant or group of defendants obtained on behalf of and for the benefit of Village, receive a contingent fee equal to thirty-three percent (331) of the Gross Recovery, as defined below, plus the cash expenditures advanced and expenses incurred by the Attorneys on behalf of the Village. C. To the extent that final judgment or settlement is obtained against defendants on different dates the fee will be determined based upon the cumulative Gross Recovery from all defendants. D. the balance.of the Gross Recovery shall be paid to the Village; E. "Gross Recovery"means damages,tax revenues, interest and penalties recovered for the Village through the date of settlement or final judgment but not indefinite prospective collections of tax revenues, interest or penalties that become due after the date of final judgment or settlement. To the extent that the defendants pay a lump sum settlement to resolve claims for both back taxes and to avoid registering and paying taxes for some number of specified years going forward, as they have clone in other places, the amount of the lump sum payment shall be the Gross Recovery. If the defendants pay a lump sum for taxes, penalties and interest due as of the date of settlement and agree to 3 register and start paying taxes prospectively, the Gross Recovery shall be the lump sum I payment and a sum equal to the annual amount of taxes actually paid by such companies for the next four (4) years as compensation for bringing about the change and leading to permanently increased revenues: 9. The Attorneys shall divide the Attorneys' fee paid by the Village in proportion to the services performed and the responsibility assumed by each lawyer on the following basis: A. Robert K.Finnell,shall receive Twenty Percent(20%)of the Attorneys' fee; B. the Bird Law Group,P.C.,shall receive Twenty Percent(20%)of the Attorneys' fee; C. the Crongeyer Law Firm,P.C.,shall receive Twenty Percent(20%)of the Attorneys' fee, D. the Clifford Law Offices,shall receive Twenty Percent(20%)of the Attorneys' fee; and E. Peterson,Johnson&Murray Chicago,LLC,shall receive Twenty Percent(20 1/o) of the Attorneys' fee.. 10. The Attorneys shall advance the expenses incurred to perform the legal services for the Village and shall receive reimbursement of the cash,expenditures advanced and expenses incurred by the Attorneys on behalf of the Tillage from any Gross Recovery which shall be deducted after the contingent fee is calculated.If there is no Gross Recovery pursuant to a final { judgment or settlement in connection with this litigation matter, then no attorneys' fee or costs shall be due to Attorneys hereunder. Upon conclusion of this matter, the Attorneys shall provide the Village with a written statement stating the outcome of the matter, and if there is a recovery, showing the Attorneys' fee, the cash expenditures advanced and expenses incurred by the Attorneys on behalf of the Village that are being reimbursed and the balance being remitted to the Village. 11. The Attorneys shall maintain professional liability insurance applicable to the services rendered to the Village. 12. The Attorneys shall submit to the Village a certification, attached hereto as Exhibit"B,"that the Attorneys; A. are not delinquent in the payment of taxes to the Illinois Department of Revenue in accordance with 65 TLCS 5/11-42.1-1 B. are not barred from contracting-as a result of a violation of either Section 3 3 E-3 (bid-rigging) or 33E-4 (bid-totaling) of the Criminal Code of 1961 (720 ILCS 5133E-3 and 5133E-4) 4 C. are in compliance with 775 ILCS 5/2-105(A)(4)requiring a written sexual harassment policy; D. are not in default, as defined in 51LCS 385/2, on an educational loan, as defined in 51LCS 3$5/1; E. will provide a drug-free workplace by: (1) Publishing a statement: (a) Notifying employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance, including cannabis, is prohibited in the Attorneys' workplace;, (b) Specifying the actions that will be taken against employees for violations of such prohibition; (c) Notifying the employee that, as a condition of employment on such contract,the employee will (i) abide by the terins of the statement;and (ii) notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than five(5)days after such conviction; (2) establishing a drug-free awareness program to inform employees about: (i) the dangers of drug abuse in the workplace; (ii) Attorneys' policy of maintaining a drug-free workplace; (iii) any available drug counseling,rehabilitation,and employee assistance program;and (iv) the penalties that may be imposed upon employees for drug violations; (3) making it a requirement to give a copy of the statement required by subparagraph 18(E)( 1) to each employee engaged in the performance of the Agreement and to post the statement in a prominent place in the workplace; 5 (4) notifying the Village within ten (10) days after receiving notice under subparagraph 18(E)(l )( c )(ii) from an employee or otherwise receiving actual notice of such conviction; (5) imposing a sanction on or requiting the satisfactory participation in a drug abuse assistance or rehabilitation program by any employee who is so convicted,as required by 30 ILCS 580 15 (6) assisting employees in selecting a course of action in the event drug counseling treatment and rehabilitation is required and indicating that a trained referral team is in place;and (7) malting a ;good faith effort to continue to maintain a drug-free workplace through implementation of this section. F. provide equal employment opportunities in accordance with the Illinois' 1 Human Rights Act(775 ILCS 58011 el seq.) and are in compliance with 775 MCS 5/2- 105(A)(4)requiring a written sexual harassment policy; G. certify that no officer or employee of the Village that has solicited any gratuity, discount„ entertaimment, hospitality, loan, forbearance, or other tangible or intangible item having monetary value including, but not limited to,cash,food and drink, and honoraria for speaking engagements related to or attributable to the government employment or the official position of the employee or officer from the Attorneys in violation of the Code of Oak Brook, Illinois, adopted by the Village pursuant to the requirements of the State Officials and Employees Ethics Act; H, have not given to any officer or employee of the Village any gratuity, discount entertainment,hospitality, loan,forbearance, or other tangible or intangible item having monetary value including, but not limited to,cash, food and drink, and honoraria for speaking engagements related to or attributable to the government employment or the official position of the employee or officer from the Attorneys in violation of the Code of Oak Brook, Illinois, adopted by the Village pursuant to the requirements of the State Officials and Employees Ethics Act 1. are not a part of the immediate family of any officer or employee at or above the level of department head of the Village; J. certify that no Village officer, spouse or dependent child. of a Village officer, agent on behalf of any Village officer or trust in which a Village officer, the spouse or dependent child of a Village officer or a beneficiary is a holder of any interest in the Attorneys;or,if the Attorneys' stock is traded on a nationally recognized securities market, that no Village officer, spouse or dependent'child of a Village officer, agent on behalf of any Village officer or trust in which a Village officer, the spouse or dependent child of a Village officer or a beneficiary is a holder of more than one percent(1%) of the 6 Attorneys,but if any Village officer,spouse or dependent child of a Village officer,agent on behalf of any Village officer or trust in which A Village officer, the spouse or dependent child of a Village officer or a beneficiary is a bolder of less than one percent (1%) of such Contractor, the Attorneys have disclosed to the Village in writing the name(s)of the holder of such interest; K. nor any of its pninei als, shareholders, members, partners, or affiliates, as p, . I : applicable, is a person or entity named as a Specially Designated National and Blocked Person (as defined in Presidential Executive Order 13224) and that it is not acting, directly or indirectly, for or on behalf of Specially Designated National and Blocked Person; L. and its principals, shareholders, members, partners, or affiliates, as applicable, are not, directly or indirectly, engaged in, and are not facilitating, the transactions contemplated by the Agreement on behalf of any person or entity named as a Specially Designated National and Blocked Person, M. are not acting, directly or indirectly,for or on behalf of any person, group, entity, or nation named by the United State Treasury Department as a Specially Designated National and Blocked Person,or for or on behalf of any person, group, entity, or nation designated in Presidential Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; and that it is not engaged in this transaction directly or indirectly on behalf of, or facilitating this transaction directly or indirectly on behalf of,any such person, group, entity,or nation. 13. In the event of the Attorneys' non-compliance with the provisions of this Equal Employment Opportunity Clause, the Illinois Human Rights Act or the Rules and Regulations of the Illinois Human Rights Commission, the Attorneys may be declared ineligible for future contracts or subcontracts with the State of Illinois or any of its political subdivisions or municipal corporations;and this Agreement may be cancelled or voided in whole or in part,and other sanctions or penalties may be imposed or remedies invoked as provided by statute or regulation. During the performance of this Agreement,the Attorneys shall: A. not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, marital status, national origin or ancestry, citizenship status, age,physical or mental disability unrelated to ability, sexual orientation, military status or an unfavorable discharge from military set-vice; and, further,that he or she will examine all job classifications to determine if minority persons or women are undetutilized and will take appropriate affirmative action to rectify any underutilization; B. if the Attorneys hire additional employees in order to perform this Agreement or any portion of this Agreement, the Attorneys will determine the availability (in accordance ance, with the Illinois Human Rights Commission's Rules and Regulations) of minorities and women in the areas from which the Attorneys may 7 reasonably recruit and the Attorneys will hire for each job classification for which employees are hired in a way that minorities and women are not underutilized; C. in all solicitations or advertisements for employees placed by the Attorneys or on the Attorneys' behalf, the Attorneys will state that all applicants will be afforded equal opportunity without discrimination because of race, color, religion, sex, sexual orientation, marital status, national origin or ancestry, citizenship status, age, physical or mental disability unrelated to ability, sexual orientation, military status or an unfavorable discharge from military service; D, will-send to each labor organization or representative of workers with which the Attorneys has or is bound by a collective bargaining or other agreement or understanding,a notice advising the labor organization or representative of the Attorneys' obligations under the Illinois Human Rights Act and the Illinois Human Rights Commission's Rules and Regulations. If any labor organization or representative fails or refuses to cooperate with the Attorneys in their efforts to comply with the Illinois Human Rights Act and Illinois Human Rights Commission's Rules and Regulations, the Attorneys will promptly notify the Illinois Human Rights Commission and the Village and will recruit employees from other sources when necessary to fulfill its obligations under this Agreement; E. submit reports as required by the Illinois Human Rights Commission's Rules and Regulations, ftu-nish all relevant information as may from time to time be requested by the Illinois Human Rights Commission or the Village and in all respects comply with the Illinois Human Rights Act and the Illinois Human Rights Commission's Rules and Regulations; F. permit access to all relevant books, records, accounts and work sites by personnel of the Village and the Illinois Human Rights Commission for purposes of investigation to ascertain compliance with the Illinois Human Rights Act and the Illinois Human Rights Commission's Rules and Regulations; G. include de verbatim or by reference the provisions of this clause in every subcontract awarded under which any portion of this Agreement's obligations are undertaken or assumed, so that the provisions will be binding upon the subcontractor. In the same manner as with other provisions of this Agreement, the Attorneys will be liable for compliance with applicable provisions of this clause by subcontractors; and further the Attorneys will promptly notify the Village and the Illinois Human Rights Commission in the event any subcontractor fails or refuses to comply with the provisions. In addition, the Attorneys will not utilize any subcontractor declared by the Illinois Human Rights Commission to be ineligible for contracts or subcontracts with the State of Illinois or any of its political subdivisions or municipal corporations; H. will not maintain or provide for its employees any segregated facilities at any of its establishments, and not permit its employee's to perform their services at any location, under its control, where "segregated facilities"means any waiting rooms, work a areas, restrooms and washrooms, restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, parking lots, drinking fountains,recreation or entertainment areas, transportation and housing facilities provided for employees which are segregated by explicit directive or are in fact segregated on the basis or race, creed, color, or national origin because of habit, local custom, or otherwise, The Attorneys (except where it has obtained identical certifications from proposed subcontractors and material suppliers for specific time periods), obtain certifications in compliance with this subparagraph from proposed subcontractors or material suppliers prior to the award of a subcontract or the consummation of material supply agreements, exceeding $10,000.00 which are not exempt from the provisions of the Equal Employment Opportunity clause, and that the Attorneys will retain such certifications in its tiles. 14. The Attorneys do not know of any facts concerning the representation of the Village or the services to be provided hereunder which the Attorneys believe would adversely affect the relationship with another client, would materially' limited by the Attorneys responsibilities to another client,to a third person or to the Attorneys' own interests or would otherwise constitute a conflict of interest. The Attorneys anticipate representing multiple local govertunental entities in pursuing unremitted taxes. The common representation of multiple local governmental entities will benefit the Village by the sharing of the costs of litigation,the sharing of research and knowledge of the various legal subject matters involved in pursuing unrernitted taxes and the sharing of information.. 15. The Attorneys shall not refuse or deny employment to any person in any capacity on the ground of unlawful discrimination, as that term is defined in the Illinois Human Rights Act, nor shall any person be subjected to unlawful discrimination in any manner, in connection with the contracting for or the performance of any work or service of any kind, by for,on behalf of, or for the benefit of the Village. The Attorneys, or any person on the Attorneys' behalf shall not,it) any manner,discriminate against or intimidate any employee hired for the performance of work for the benefit of the Village on account of race, color, creed, sex, religion, physical or mental handicap unrelated to ability, or national origin; and there may be deducted from the amount payable to the Attorneys by the Village, under this contract,a penalty of five dollars for each person for each calendar day during which such person was discriminated against or intimidated in violation of the provisions of the Public Works Employment Discrimination Act (775ILCS 10/0/01).. 16 The Village's financial obligations under this Agreement are specifically contingent upon the recovery by the Attorneys of unrcmitted taxes. No annual appropriation of funds other than a general appropriation for legal services is required to authorize such financial, obligation until such recovery is made.. This Agreement shall not constitute a debt or obligation of the Village within any statutory or constitutional provision.In the fiscal year during which the Village is to pay to the Attorneys the Attorneys' fee and reimbursement of expenses advanced to which the Attorneys are entitled under this Agreement, if any, the Village shall include in the budget presented to the Village Board a proposed appropriation for the payment of the Attorneys' fee and reimbursement of the expenses advanced. 9 17. This Agreement contains all of the terms,provisions, agreements, conditions,and covenants between the parties,represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations or understandings, whether written or oral. Changes and amendments to this Agreement shall only be made in writing and by amendment to this Agreement. The amendment shall be in contract form and shall be approved by the Village. I 18. Any notice given hereunder shall be in writing and transmitted via the United States mail, registered or certified, postage pre-paid, via oveiruglit delivery (UPS or FedEx), or via fax with confirmed receipt, or via email, with a confirming fax or overnight delivery addressed to the proper party as follows: A. If to the Village: Village of flak Brook Attention:David Niemeyer, Village Manager 1200 Oak Brook Road Oak Brook,Illinois 60523 B. If to the Attorneys,: Robert K.Finnell The Finnell Firm 1 West Fourth A venue Suite 200 Rome,GA 30161 Mr.William Q.Bird Bird.Law Group,P.C. 2170 Defoor Hills Road Atlanta,GA 30318 Mr.John W. Crongeyer Crongeyer Law Firm,P.C., 2170 Defoor Hills Road Atlanta, GA 30318 Mr.Thomas K, Frindable Clifford Law Offices 120 North LaSalle Street Chicago,IL 60602 Mr.Paul O'Grady Peterson,Johnson&Murray Chicago,.LLC 223 South Wacker Drive, 840'Floor Chicago,IL 60606 10 Either party may change its mailing address or other contact information by giving written notice to the other party as provided above, Whenever this Agreement requires one party to give the other notice, such notice shall be given only in the form and to the addresses described in this paragraph. 19. When this Agreement becomes effective, it will relate back to the day the appointment of the Attorneys for the Village became effective. This Agreement shall terminate upon a final judicial determination or a final settlement, This Agreement may also be terminated by the Village upon the expiration of the term of the mayor or upon written notice to the Attorneys, subject to the,payment of the reasonable value of the services rendered prior to the date of termination. The Attorneys shall have the right, if in their sole judgment they believe such action is necessary or appropriate, to withdraw as attorneys representing the Village, without terminating this Agreement or may elect to terminate this Agreement,if the Village fails to meet its obligations under this Agreement, refuses to cooperate with the Attorneys,refuses to follow the legal advice provided by the Attorneys on a material matter or -under any other circumstances in which the Attorneys' professional or legal responsibilities or obligations mandate or permit termination. The Attorneys shall give thirty (30) days' written notice to the Vi.Ilage, The Village shall cooperate -and facilitate the withdrawal by retaining a substitute attorney. Provided that the Attorneys are ethically able to do so, at the sole option of the Village Council,all obligations under this Agreement shall continue until a successor attorney is retained but in no event more than sixty (60) days after the effective termination date as set forth in the notice. If this Agreement is terminated for any reason, the termination shall be effective only to terminate the Attorneys' services prospectively,and all other terms of this Agreement,including the Village's obligation to compensate the Attorneys for legal services rendered and expenses incurred prior to the termination shall survive the termination. Provided that the Agreement has not been terminated upon a final judicial determination or a final settlement or otherwise terminated by the Attorneys, this Agreement maybe renewed by the Village following the expiration of the term of the mayor upon written notice to the Attorneys, 20. This Agreement shall be deemed to be exclusive between the Village and the Attorneys. This Agreement shall not be assigned by either party without first obtaining permission in writing from the other party. 21, This Agreement shall be governed by the laws of the State of Illinois. 21 The illegality or invalidity of any term or clause of this Agreement shall not affect the validity of the remainder of this Agreement and the Agreement shall remain in full force and effect as if such illegal or invalid term or clause were not contained herein. 23. The waiver by either party of any breach of this Agreement shall not constitute a waiver as to any other breach. 24. The Attorneys are not advising the Village with respect to this Agreement because the Attorneys would have a conflict of interest in doing so. If the Village desires advice regarding this Agreement,it should seek independent counsel of its choice to do so. I I [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLAND] I t i 12 IN WITNESS WHEREOF the parties have executed this Agreement in Oak Brook Illinois,the date and year first above written. ATTORNEYS VILLAGE ROBERT K FINNELL VILLAGE OF OAK BROOK 1 By Robed K. FinneIl Gopal Lalmalani,Mayor BIRD LAW GROUP,P.C. Attest: Charlotte Pruss,`Village Cleric By William Q.Bird,Managing Partner CRONGEYER LAW FIRM,P.C. By: John W. Crongeyer,President CLIFFORD LAW OFFICES By Thomas Prindable,Managing Partner PETERSON,JOHNSON x&MURRAY CHICAGO,LLC By Paul O'Grady,Managing Partner 13 RESOLUTION 2013-LEGAL-HM-TAX-LIT-EX-R-1257 A RESOLUTION APPROVING A LEGAL SERVICES AGREEMENT FOR THE RECOVERY OF UNREMITTED HOTEL TAX REVENUE DUE AND OWING FROM ONLINE TRAVEL COMPANIES WHEREAS, Article VII, Section 10 of the 1970 Illinois Constitution authorizes the Village to contract with individuals, associations, and corporations in any manner not prohibited by law or ordinance; and WHEREAS, pursuant to Chapter 5 of Title 5 of the Village Code of the Village of Oak Brook, Illinois ("Village Code', the Village collects a tax from hotel and motel operators within the Village on the basis of gross receipts from the renting of rooms ("Hotel Tax's; and WHEREAS, online travel companies ("OTCs' purchase the rental of hotel and motel rooms from, and pay the Hotel Tax to, hotel and motel operators at wholesale rental rates; and WHEREAS, the OTCs subsequently re-rent the hotel and motel rooms at retail rental rates without remitting the Hotel Tax to the Village for the difference between the gross receipts paid for the hotel and motel rooms at the wholesale rental rates and retail rental rates ("Unremitted Hotel Tax Revenue'); and WHEREAS, a class-action law suit filed against the OTCs by various municipalities within the State of Illinois seeks to recover from the OTCs the Unremitted Hotel Tax Revenue due and owing to such municipalities by the OTCs; and WHEREAS, by joining the class-action law suit, the Village could recover from the OTCs the Unremitted Hotel Tax Revenue due and owing to the Village; and WHEREAS, the Village desires to enter into a Legal Services Agreement ("Legal Services Agreement's with Robert K. Finnell, the Bird Law Group, P.C., the Crongeyer Law Firm, P.C., the Clifford Law Offices, and Peterson, Johnson & Murray Chicago, LLC, (collectively, "Special,Counsel's for the performance of legal services in connection with the recovery of the Unremitted Hotel Tax Revenue from the OTCs ("Legal Services'; and WHEREAS, pursuant to the Legal Services Agreement, the Special Counsel shall perform the Legal Services for the Village for a contingency fee of 25 percent if the Special Counsel obtain a settlement agreement from the OTCs for the Unremitted Hotel Tax Revenue within 30 days after sending an initial demand letter, and of 33 percent if the Special Counsel must file suit and obtain a judgment or settlement for the Unremitted Hotel Tax Revenue, plus expenses; and WHEREAS, pursuant Section 1-7-66 of the Village Code, professional service contracts for certain types of professional services, including legal services, are exempt from the normal bidding procedures under the Village Code; and WHEREAS, Village staff recommends that the Village enter into the Legal Services Agreement with the Special Counsel to procure the Legal Services for the Village; and WHEREAS, the Village Board has determined that it is in the best interest of the Village to enter into the Legal Services Agreement with the Special Counsel for the performance of the Legal Services and collection of unremitted Hotel Tax revenue due and owing to the Village by the OTCs; NOW THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS as follows: 4. Resolution 2013-LEGAL-HM-TAX-LIT-EX-R-1257 Approving Professional Services Agreement for Recovery of Hotel Taxes Page 2 of 3 Section 1: Recitals. The foregoing recitals are hereby incorporated into, and made a part of, this Resolution as the findings of the President and Board of Trustees of the Village of Oak Brook. Section 2: Approval of Legal Services Agreement. The President and Board of Trustees hereby approve the Legal Services Agreement by and between the Village and Special Counsel. Section 3: Authorization and Execution of Legal Services Agreement. The Village President and Village Clerk shall be, and hereby are, authorized to execute the final Legal Services Agreement on behalf of the Village after review and approval of the final form of the Legal Services Agreement by the Village Manager and the Village Attorney. Section 4: Effective Date. This Resolution shall be in full force and effect upon passage and approval in the manner provided by law. f`e l APPROVED THIS 23rd day of April, 2013 Gopal G. Lalmalani Village President PASSED THIS 23rd day of April, 2013 Ayes: Trustees Aktipis, Manzo, Moy, Wolin, Yusuf, Zannis Nays: None Absent: None ATTEST: pia Charlotte K. Pruss l Village Clerk r Resolution 2013-LEGAL-HM-TAX-LIT-EX-R-1257 Approving Professional Services Agreement for Recovery of Hotel Taxes Page 3 of 3 EXHIBIT A AGREEMENT