Ventura officials have ramped up their efforts — and rhetoric — in support of a lawsuit against a prominent local insurance company to recoup upward of $1 million in allegations of professional negligence and breach of contract.

The city's suit against Ventura-based Tolman and Wiker Insurance blames the firm's out-of-town lawyers for stringing out their case, costing taxpayers hundreds of thousands of dollars. As part of an effort to resolve an affordable housing dispute, the city sued the insurance firm for negligence after a partner there didn't file a claim within deadlines and the city and Ventura's housing authority lost coverage as a result.

The City Council has been briefed on the case in closed session for more than two years but broke its silence last week. City Councilman Neal Andrews blasted the Ventura insurance firm, saying it allowed its attorneys to deliberately cause repeated delays he claimed were efforts to "churn the case to maximize their billable hours."

On Monday, the full council instructed City Attorney Ariel Calonne to "prepare aggressively for trial" if a resolution can't be reached at a scheduled mediation hearing on Aug. 19.

The city is seeking to recoup several million dollars, said Calonne, who in open session last week relayed the details of lawsuits that have consumed the city's legal staff and outside counsel for years. "We believe we are owed substantial amounts of money," he said.

Karen Vandermeer, an attorney at the Los Angeles-based defense firm Gilbert, Kelly, Crowley & Jennett, which represents Tolman and Wiker, declined Tuesday to comment. Calls to partners at Tolman and Wiker's Ventura office were not returned.

The suit against Tolman and Wiker is one of a string of lawsuits stemming from claims by owners of a low-income condominium complex on the city's west end. The owners sued the city and Ventura's Housing Authority in 2005, arguing they were duped by the home builder and never told of the affordability designation when they purchased their homes.

On the verge of being sued, the housing authority called the Tolman and Wiker partner who managed its account so the partner could notify the authority's insurance carrier. The partner, however, went to Las Vegas — after receiving the claim and doing nothing with it — allowing the policy period to expire, according to Calonne. This set off a chain of denials by the housing authority's insurance carriers, he said.

Case still unresolved

Attorneys for owners at the Seneca Highland community eventually sued the city and Housing Authority, seeking to remove the affordability designation so they could resell their homes at market price. The city declined, wanting to preserve its stock of affordable housing. That case remains unresolved.

Tolman and Wiker also concealed broker fees charged to the housing authority in violation of the California False Claims Act, Calonne said. A California law requires an insurance broker to explain the basis for its fees to its client, Calonne said, but a Tolman and Wiker partner testified in a deposition that he did not explain fees and commissions to the authority leadership because they never asked.

Since then, 10 lawyers have represented Tolman and Wiker's defense — requiring time and extensive taxpayer money to bring each up to speed, he said. The lawyers also consistently failed to properly respond to discovery and have filed frivolous motions, requiring the city to challenge the inadequate responses and increasing the cost of litigation, Calonne said.

"I don't know where all the blame should be assessed, but I do know the lawyers representing Tolman and Wiker deserve a big share of it," he said, calling it "unfortunately typical behavior by insurance defense lawyers who churn a file for profit rather than acting in the best interest of their client and their public."

Tolman and Wiker merged with Santa Maria-based InWest Insurance Services in 2005 to form TWIW Insurance Services and become one of the largest insurance brokers in the nation. The company has offices in Bakersfield, Salinas, Santa Maria and Ventura.

20-year representation

The firm has represented Ventura's Housing Authority for 20 years and advertises itself as having special expertise in dealing with public agencies.

City Councilman Carl Morehouse, chosen along with Councilman Brian Brennan for a special ad hoc mediation subcommittee, said Tuesday he is cautiously optimistic a resolution can be reached at the Aug. 19 mediation. He said it was important residents know the city is committed to recouping their money and the city has prevailed in all its legal efforts regarding this case to date. Andrews was angered by the lengthy ordeal.

"I am outraged," he said. "It's unconscionable that a firm that has represented itself to this community for many years as a good corporate citizen should tolerate such total disregard for the public's interest as the attorneys for the company seem to be doing."

Being transparent to citizens on the city's legal costs is important, said Calonne, who is modifying the city's contracting process so ensure full disclosure of the amount being spent on outside attorneys. The city reduced its budget for outside council by $200,000 in this fiscal year.