Printable VersionIt wasn’t a decision they treaded lightly or one the Lake Havasu City Council might have wanted to make, but Tuesday the council agreed to a lawsuit settlement with the Meehan family.
The council ultimately decided for a settlement of $250,000 to be awarded to Ryan, Thomas and Caren Meehan, a decision that Councilman Dean Barlow said was still extortion, but there was no way the city could get out of it.
Mayor Mark Nexsen and Councilman Don Callahan both said the decision was not based upon the lawsuit agreement, but upon how defending the case in appellate court could cost taxpayers money.
“If something went wrong, what will the next jury decide,” Nexsen said. “What we are dealing with is subjecting taxpayers to an unknown bill.”
Under the terms of the city’s policy with Royal Insurance Company, the insurance carrier for the city at the time of the accident, the city is required to sign any release of settlement the insurance company approves, City Attorney Paul Lenkowsky.
While the city’s policy allowed the insurance carrier to come to a settlement agreement with a plaintiff, only the City Council could sign a release of the settlement agreement, Lenkowsky said. The amount of the settlement and decision to settle were the determination of the city’s attorney in the case, Bill King, and the insurance company, he said.
Refusing to sign the release could lead to the city losing its insurance coverage in the case, since it would be considered in violation of the terms of the policy.
“It is my understanding of the policy provisions that the (insurance) company would take the position or is likely to take the position that since the city has an affirmative duty to cooperate in facilitating the settlement of a claim, that duty would extend to approving the release portion of the agreement,” Lenkowsky told the council. “Since the release is an integral part of the settlement, there would be no settlement, and, therefore, a withholding consent of the release the city would in effect be obstructing settlement and could be in violation of the policy.”
The settlement and lawsuit that preceded it came in response to a 2002 automobile accident involving Ryan Meehan. Meehan was seriously injured after losing control of his vehicle and being thrown from the vehicle during a high-speed chase with a Lake Havasu City police officer. Meehan was not wearing his seatbelt at the time of the accident.
At the time of the accident, Meehan was intoxicated. The chase reached speeds of up to 70 miles per hour, after the officer attempted to pull Ryan Meehan over.
At the lawsuit trial, the city was found 18 percent liable for the accident and Meehan 82 percent.
Ryan Meehan was awarded zero damages. His parents, Thomas and Caren, were each awarded $12,150 for their loss of consortium claims.
Without the council signing the release, Lenkowsky said the city could be looking at even further costs to defend the case in court.
“If, as an abstract possibility, there were to be $500,000 verdict on a retrial, the city would be out-of-pocket the difference between the settlement amount and the actual verdict,” Lenkowsky said. “Equally important if the insurance company takes the position that due to non-cooperation there is no further liability under the policy, as they tendered an amount the plaintiff was willing to accept, they would also take the position logically if there is no further liability under the policy that they don’t have to pay legal counsel or pay any court costs in the continued defense of the case.”
The current settlement does not cost the city anything. It has reached its insurance deductible for the case. The settlement also states the city assumes no liability for the accident, but, as Councilman Lee Barnes put it Tuesday, that might not be how the public sees it.
“I think we would be foolish not to approve this,” Barnes said. “The problem I have is it makes us look like we were liable. I just want everybody to understand that really I don’t think we were liable for anything. When you give somebody a quarter of million dollars, a whole lot of people read it that you were guilty.”
You may contact the reporter at twaggoner@havasunews.com.
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