A lawsuit won by a Billings police officer may end up costing the city more than $1 million. The city's insurance carrier, the Montana Municipal Insurance Authority, wants the city to pay for two-thirds of the $1.6 million it has paid to Officer Steve Feuerstein and his attorney.
In a letter sent to the city July 3, MMIA chief executive Alan Hulse said that MMIA's board of directors wants Billings to pay two-thirds of the $1.3 million judgment awarded to Feuerstein, which amounts to at least $871,000. In addition, Feuerstein's attorney submitted a bill of almost $300,000, which could raise the city's final bill to just more than $1 million.
In July 2007, a jury awarded Feuerstein $1.3 million in damages because the city violated employment laws and his free-speech rights. The MMIA decided not to appeal the judgment but warned that it might seek reimbursement from the city later.
Hulse said he would talk with MMIA's legal team before releasing more information. After the trial ended, City Attorney Brent Brooks said the city's insurance policy with the MMIA didn't cover civil-rights violations, so he thought the city might end up paying at least half. Two of Feuerstein's four claims involved civil-rights violations. The jury awarded a lump sum and did not assign a dollar amount to individual claims.
Reached Wednesday, Brooks said his earlier interpretation may be incorrect.
"I've had at least one insurance attorney call me up and one said, 'You know, (the MMIA) really shouldn't be able to do that,' " he said. "The council will have to decide, 'Should we pay anything? If so, why do we pay? Or should we pay, and how much?' "
Assistant City Administrator Bruce McCandless is a member of the MMIA board. He and Brooks met with the other 12 board members on June 27 to discuss the issue. Hulse said McCandless recused himself from board discussions on the topic and was representing the city during the meeting.
"We have had numerous discussions with Billings relative to coverage for this case and the basis for the MMIA's request for reimbursement," Hulse wrote in the letter to the city, which was released to The Billings Gazette on Wednesday. "The Board was informed the Council has requested additional information on the case, with the intention of reviewing that information and then meeting to discuss a response to the MMIA's request."
The MMIA has asked for a response by July 30. The council had planned to discuss the issue during a closed session at its meeting Monday night, but decided to wait after The Billings Gazette objected to the closure.
According to state law, public meetings may be closed to discuss litigation strategy, but not if the only parties involved in the litigation are public bodies.
On Wednesday, Brooks said that the MMIA probably is a government agency, so the council's discussion of the issue next Monday night will likely be open.
"At this point, our board has not authorized litigation against the city of Billings," Hulse said Tuesday.
At a June 16 work session meeting, the council met in closed session for over an hour with Hulse and others from the MMIA.