The Smithville Board of Aldermen voted last week to settle a lawsuit brought last year by two former city employees for $130,000.
The two men, Kenny Waymon Dyal, Sr. and Christopher Derrick Ferrell, lost their jobs after being charged with theft for allegedly taking scrap brass from the water treatment plant and selling it to a recycler.
Dyal and Ferrell filed the lawsuit against the city in DeKalb County Circuit Court on Feb. 17, 2011, asking for a jury trial.
The men’s demands initially included reinstatement of their jobs, compensatory damages for wages and benefits lost during their unemployment, punitive damages for intentional, malicious, and reckless conduct of the city, attorney fees and costs, and any other relief to which they may be properly and justly entitled.
In the event they could not be given back their jobs, Dyal and Ferrell asked for lost differential wages and benefits to the date of their expected retirement.
Dyal was the supervisor of the Smithville Water Treatment Plant and Ferrell was a city maintenance employee and water meter reader.
During a special called meeting last week, Dan Rader, the attorney appointed by the city's insurance carrier, recommended that the aldermen approve an offer to settle the lawsuit for $130,000.
The settlement would include $100,000 in city funds, $30,000 from insurance funds, and up to $2,500 for mediator, discretionary, and court costs.
"This lawsuit was filed quite some time ago and it has been pending by Kenny Dyal and Christopher Ferrell," Rader told the board.
“We've been defending that and we had a mediation. Prior to that we had an attorney/client meeting and I won't reiterate or recount what the attorney/client advice was, but we have attempted to negotiate a settlement of this lawsuit.
“The plaintiffs started at $700,000 as their demand. The city made offers subject to this board's eventual approval. The city's final offer was a total of $130,000 which was going to be paid $100,000 from city funds and $30,000 from TML funds, which is your insurance carrier.
“There are some issues with respect to whether or not they (TML) cover the claim. They have taken the position that they don't cover any of the types of claims brought, except that they do provide you a legal defense. So they were contributing based on a cost basis. In any event, the plaintiff's lowest demand at the mediation was $150,000 and the mediation ended and the case was not settled. Since that time, on Friday afternoon, the plaintiff's lawyer called me and said that they would take $130,000 plus some costs, which include the court costs. They have asked for us to pay all of the mediator's costs.
“Both of those are fairly standard. The only one that is not entirely standard is discretionary costs which are less than $1,000 but he didn't have a firm total for me. I have attempted to call TML to see if they would pay that on your behalf but the adjustor handling the claim is out unfortunately. He will be back later this week and I'll ask him if he will pay those costs on your behalf.
“But the question before the board tonight is whether or not to approve the settlement of the city's portion of $100,000 for a total settlement of $130,000. I'd ask you to approve up to $2,500 in costs, if necessary if TML doesn't pay it. The $100,000 plus potentially up to $2,500 would come from city funds," said Rader.
When Mayor Taft Hendrixson asked city attorney Vester Parsley for his opinion on Rader's recommendation, Parsley responded, "I think it is wise for us to go forward."
Alderman Danny Washer made a motion to accept the recommendation, and Gayla Hendrix seconded the motion.
Aldermen Steve White and Cecil Burger voted along with Washer and Hendrix to approve the settlement.
Alderman Shawn Jacobs was absent.
Ferrell and Dyal filed the suit after being discharged and charged with theft for selling scrap metal from the renovation of the Smithville Water treatment Plant.
The two men maintained that they had permission to remove the metal.
Both men appeared in court in January, 2011 where they agreed to make restitution in the amount of $1,348 jointly and severally.
After they each paid their half of the restitution the case against them was dismissed and their records were to be expunged.