Last month’s $335,000 settlement in conjunction with the death of Jose Baudilio Lemus-Rodriguez forced the city’s liability fund into deficit.
But the high-profile case is only part of the problem: Legal costs of defending the city have grown rapidly in the past few years.
The cost of defense has risen from $720,558 in 2006 to more than $1.2 million last year, far exceeding its $700,000 budget, according to data provided by the city controller’s office.
In total, the city has spent nearly $6 million in legal defense costs and settlements since 2006.
Those rising costs, most often the result of lawsuits against the police department, forced the City Council this month to put $1.2 million from its cash reserves into the city’s liability account. The account was $273,963 in the red before the infusion of cash. Through July, the city had spent $651,987 on legal defense costs this year. This left the city with $12.5 million in reserves just weeks before it begins debating the 2010 budget.
Councilman Mitch Harper, R-4th, was the lone member to vote against allocating the extra $1.2 million. He said as the council prepares for its budget debate, it needs to look at numerous expenses including those paid to defend the city in court.
“The council has not taken an overall examination of legal fees that Fort Wayne pays,” he said.
The city’s settlement history, however, is quite good, according to James Stergiou, chairman and CEO of SGRISK actuary consultants. The company provides services to the city. Because the city is self-insured, it pays out of pocket for its legal expenses and settlements.
The city has had low losses compared with other communities – Stergiou estimated it was in the top 25 percent in the country. This has saved a minimum of $5 million over the past 20 years from not buying private liability insurance. He noted being self-insured also allows the city to invest the money it would otherwise pay on premiums.
He added the city would still be responsible for its legal costs with a private insurer.
Police costs
The legal and settlement totals include claims for auto accidents, unemployment insurance, police actions and others. The claims against city police, however, account for the majority of legal work. According to city statistics, police liability claims account for nearly 64 percent of all the money spent on attorneys defending suits. The police account for less than 30 percent of the settlements paid by the city since 2006, though.
Police Chief Rusty York said the costs are cyclical, noting there have been years when the costs have been low. But he said the nature of the police business leads to situations when force must be used, and especially police shootings – regardless of legitimacy – result in lawsuits.
“When there isn’t a claim, that is the exception,” he said.
York said his department’s training has become more lifelike, putting officers in pressure situations where they have to decide whether it is appropriate to shoot.
He said this type of training will eventually save money and also protect officers from harm.
A few major recent police cases have cost the city nearly $1 million.
Jose Lemus-Rodriguez: May 14, 2008, through July 31, 2009; $335,000 settlement, $33,321 legal costs
In December 2007, Lemus-Rodriguez, a 24-year-old illegal immigrant from Guatemala, disregarded a stop sign and led police on a brief chase, crashing into a sign in front of Mount Calvary Missionary Baptist Church.
Police officer James Arnold, who had been on the force for less than four months, emptied his handgun into Lemus-Rodriguez’s car, killing Lemus-Rodriguez.
In late 2008, the estate of Lemus-Rodriguez filed a six-count federal lawsuit against the city and Arnold in his individual capacity, alleging excessive force, failure to train and supervise, a state law claim for a wrongful death, negligence, assault and battery, and intentional infliction of emotional distress. Lemus-Rodriguez’s estate includes a young daughter in Guatemala.
City Attorney Carol Taylor said the case was settled because legal costs could have approached the settlement amount.
Arlinthia White: Jan. 31, 2006, through Nov. 30, 2008; $135,000 settlement, $248,110 legal costs
The city of Fort Wayne reached a settlement with White, who was the mother of Derrick Ford.
Ford was shot and killed by Fort Wayne police outside the Veterans of Foreign Wars Post 8147 on Winter Street in January 2004. Police said he had a gun in his hand, but White argued her son never had a gun, instead putting his hands in the air when ordered to do so by police.
In November 2004, after hiring high-profile Michigan attorney Geoffrey Fieger, who represented Jack Kevorkian, White sued Officer Mark Gerardot, who fired the fatal shot.
Rudy Escobedo: July 12, 2006, through present; $250,001 legal costs, no settlement
On July 19, 2005, Escobedo was shot to death in his Fulton Street apartment by officers Brian Martin and Jason Brown after pointing a handgun at them.
Escobedo’s family members filed a federal lawsuit claiming the shooting was not justified. A federal judge in May 2008 dismissed part of the Escobedo estate’s lawsuit against Fort Wayne officers involved in the shooting but said the lawsuit’s claim that certain officers acted with excessive force could proceed to jury trial.
No court date has been set. An attempt to overturn the partial dismissal was rejected by the 7th U.S. Circuit Court of Appeals.
York said he understands the city sometimes feels it must settle a case because it would cost too much to defend but said he is confident in the work by the city law department.
“I’ve never been in a situation where I felt the city has paid on a frivolous claim,” he said.
Taylor, the city attorney, did not respond to several requests for an interview.
