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Nevada City B&B case back in Nevada County court

The legal struggle over a Nevada City bed-and-breakfast, started a decade ago, isn’t over yet.

The Goldtown Hideaway on Spring Street, formerly the Kendall House, can legally operate. That’s no longer in question.

The issue now is how much the lawyer for the Friends of Spring Street, a group formed in opposition to the B&B, is owed in attorney’s fees and costs.



This legal nuance potentially could cost Nevada City and the B&B’s owners around $140,000.

A ruling earlier this month by the Third District Court of Appeal focuses on the issue of attorney’s fees and costs.



Attorney P. Scott Browne, special counsel for Nevada City, said the Friends of Spring Street are entitled to fees if the group prevails in an issue of significant public interest that benefits many people. A Nevada County judge said the group failed to prove it. The appeals court sided with Michael Graf, the attorney for the Friends of Spring Street.

“It’s just unfortunate this has had to go this far,” Browne said.

The issue now returns to a local judge who will determine how much, if any, fees Graf should receive. No date has been set for the hearing.

“The trial court has to do more proceedings,” Graf said.

According to Graf, his attorney’s fees total around $140,000. Costs, which include preparing court documents, are likely under $5,000.

Attorney Allan Haley, who represents the B&B’s owners, said the issue could take significant time.

“Obviously, they’re trying to get attorney’s fees out of the city and my clients.”

The case

The case has its roots in the 1994 passage of Measure G. That initiative prohibited bed and breakfasts in residential areas, though it allowed existing B&Bs to continue operating.

Haley has said the B&B received its first use permit in 1994. Over the years the business changed hands, with its new owners renting the home out for longer periods between 2002 and 2012. They continued to renew the B&B license.

In 2014 Mollie Poe and Declan Hickey bought the house with plans to reopen it as a bed and breakfast. They appeared before the Nevada City Planning Commission for an opinion. That body decided that the business had been out of use for too long, though Haley — now representing the owners — said local rules allowed B&Bs in residential areas. Also, the Planning Commission’s opinion was advisory only. The owners appealed to the City Council, which sided with Poe and Hickey.

The Friends of Spring Street, which Graf represents, had organized in opposition to the B&B, Haley said. The organization appealed to the Third District Court of Appeal and won.

Haley has called the decision moot. The appeals court ruling determined B&Bs could continue operating as a nonconforming use — a category Goldtown Hideaway fell within. Additionally, local rules have changed.

“There’s a new ordinance now allowing Airbnbs,” Haley said.

The issue of attorney’s fees still remained. Graf asked a Nevada County judge for fees, though the local judge ruled against him. He again appealed to the Third District, which earlier this month ruled in his favor.

To contact Staff Writer Alan Riquelmy, email ariquelmy@theunion.com or call 530-477-4239.


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