SUNDAY EDITION | City pays huge in settling lawsuits over "unusual" year
LOUISVILLE, Ky. (WDRB) -- In July, Louisville Metro government paid $700,000 to settle a wrongful death lawsuit filed by the family of a woman who was killed in a car accident involving an off-duty Metro police officer who was speeding.
That same month, the city paid $475,000 to settle a lawsuit over an injury accident blamed on faulty construction.
And in August, the city paid more than $8.25 million in interest to retired firefighters as a result of a long-running pension dispute.
In all, Metro government has paid out more than $19 million in court settlements during the 12 months ending Oct. 31 -- making it Metro taxpayers' most expensive year for legal disputes in recent memory, according to a WDRB analysis of city records.
"It's an unusual year," said Chris Poynter, spokesman for Mayor Greg Fischer. "It's an outlier when you look at the numbers."
In fact, the amount Louisville taxpayers shelled out for court settlements during that 12-month period is nearly equal to the $21 million Metro paid in settlements from fiscal years 2004 to 2012, according to city records. (The city keeps track of lawsuit payments by fiscal year, from July to June.)
In fiscal year 2013 and through the first half of 2014, the city has already paid more than $19 million, including $8.5 million to Edwin Chandler, a man wrongfully convicted of murder as a result of a botched investigation by Metro police.
While the settlements aren't causing any unexpected budget issues, Fischer's administration has wrestled with money problems in recent years, and the mayor has argued many times that the city simply doesn't have the money it needs to invest in local projects, which is why he wants the option of adding a local sales tax.
Legal settlements such as the recent interest payment of $8.2 million to firefighters mean less money for other city spending.
"I'm concerned about all of the money (in legal settlements)," said Metro Councilman Kelly Downard, a Republican who represents the Prospect area. "We seem to have a lot of litigation."
Downard said, however, that Fischer was saddled with a backlog of several long-pending suits that the previous mayoral administration "just drug out," including the firefighter suit.
Councilman Jerry Miller, a Republican who represents Middletown, agreed, adding that "we should have settled with the firefighters long ago."
The firefighter suit began in 2000 when firefighters filed a complaint with the Kentucky Labor Cabinet challenging the way the city calculated overtime.
Poynter said both the wrongful conviction and firefighters overtime issues were several years old and agreed that Fischer is more of a "don't let things drag out too long" kind of guy, "because sometimes you can pay more in the end, as we've seen."
Still, Downard questioned the number of settlements – more than three dozen in the 12 months WDRB looked at.
"People seem to want to sue the city and we end up settling for fear we might lose," he said. "We seldom go to court (for trial.) It seems like an awful lot of people sue us and an awful lot get paid."
Pat Mulvihill, general counsel for the mayor, said, "We look at each case and look at the risk and we make an educated guess as what we think is the best course to take," in consultation with the county attorney's office.
It is not unusual for cities to settle lawsuits to avoid costly trials and potently costlier jury awards.
Larry Simon, one of Chandler's attorneys, said Metro government made a wise choice in settling the wrongful murder conviction case.
"I think it was the right thing to do and the smart thing do to," he said. "They had exposure to even higher liability than the settlement amount."
Janet Kelly, a University of Louisville professor who directs U of L's Urban Studies Institute, said while "it is unusual for a city to have such a big liability hit in one year," the long-running firefighter suit was a major part of that.
And the city, she says, has already set aside enough to handle the pending settlements.
"The trick to risk management is predicting your liability and planning for it," Kelly said. "It appears to me Metro is doing just that."
Mulvihill said the city was ready for the high settlement amounts.
"We knew about them and we planned for them," he said.
Because Louisville is self-insured, most of the settlements come directly from city accounts and not from insurance companies. However, the city does pay into a trust set up for city agencies to pay large legal damages, and that fund covers settlements over $500,000, including about $5 million for the Chandler settlement.
The firefighter settlement was paid out of the city's regular budget.
It is difficult to tell how Louisville compares to other cities its size when it comes to litigation, because there is no national database, and settlement amounts are often not part of court records .
Meanwhile, it doesn't look like Louisville's sudden rash of costly legal payouts will end any time soon.
Kerry Porter, who was who was exonerated in 2011 of a murder for which he spent 14 years in prison, has a pending suit against the city and eight officers for conspiring to wrongfully convict him.
And several people have sued former Louisville Metro police Det. Crystal Marlowe after it was determined they had been wrongfully arrested.
And there are more firefighters who claim to be owed overtime money.
Among the payments by the city over the last year, in order of amount:
- $8.5 million to Edwin Chandler, November 2012. Chandler spent nine years in prison after being wrongfully convicted of murder. Prosecutors have charged another man, Percy Phillips, in the shooting and killing of Brenda Whitfield during a burglary at the Watterson City Chevron Food Mart on Sept. 28, 1993. Police were accused of ignoring evidence pointing to Phillips, who left his fingerprint on a bottle of beer he left on the counter, was seen by witnesses and had a lengthy criminal history.
- $8.25 million to retired firefighters, August 2013. This is part of what is owed in a long-running dispute that began in 2000 when firefighters filed a complaint with the Kentucky Labor Cabinet challenging the way the city calculated overtime. A group of 834 firefighters entered into a $45 million settlement with the city in 2009 that covered pension underpayments, interest and attorney fees.
- $700,000 to the family of Sarah Bearden, July 2013. The settlement resolved a wrongful death lawsuit filed against the Louisville Metro Police Department involving a 2010 crash that killed 22-year-old Bearden when an officer slammed into her vehicle on North Hurstbourne Parkway at more than 80 mph. As part of the settlement, Detective James Adams wrote a letter to Bearden's family admitting he was speeding at the time of the wreck. Police suspended Adams for 30 days.
- $475,000 to Kelly Sorley and minor children, July 2013. This settlement resulted from a wreck in which city construction was blamed.
- $125,000 to Penny Janssen, July 2013. This settlement resulted from a lawsuit over a wreck Janssen had with a metro government employee in 2012.
- $57,500 to Paula Wahl, March 2013. Louisville Metro Public Works employee, was paid, to settle a sexual harassment lawsuit against former Louisville Metro Public Works Director Ted Pullen.
- $50,000 to the owners of Phat's Bar & Grill, February 2013. The former Louisville strip club filed a lawsuit against the Louisville Metro Police Department, city government and 24 police officers alleging that they conspired to put the club out of business -- an operation that culminated in a SWAT raid of the club. Bert Williams Sr. and Bert Williams Jr., the father and son team who at one time owned Phat's, claimed LMPD launched "Operation Purple Rain" in April 2008 in an effort to close the business. The suit accused police of -- among other things -- false arrest, several constitutional violations and wrongfully interfering with the day-to-day operations of a business. The suit also accused police of criminal conduct, including assault, perjury, theft and official misconduct.
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