Will ignoring settlement offers cost Madison County taxpayers $1 million?

The increasing cost of a discrimination lawsuit has renewed some Madison County Board members’ concerns that the case should have been settled before the price tag reached $1 million, while Treasurer Kurt Prenzler said he intends to keep appealing.

In 2014, former comptroller Linda Dunnagan sued Prenzler and the Madison County Treasurer’s Office, alleging she was pressured to quit after she returned to work following a life-threatening illness. After she declined to resign or take a lower-paying job, Prenzler eliminated her position.

Dunnagan sued under the Americans with Disabilities Act in federal court. The lawsuit went to trial, and the jury sided with Dunnagan, awarding compensatory damages of $450,000.

On Monday, federal district Judge Staci Yandle added lost wages and the plaintiff’s legal expenses to the county’s bill, bringing it to nearly $660,000. Once the county’s legal fees are added, the estimated cost is approximately $1.02 million.

Prenzler has maintained that Dunnagan’s job was eliminated as a cost-saving measure. He said she was “never fired” because she was offered a job at half salary. But Yandle ruled on Monday that the half-salary job was not an offer “made in good faith” and could not be considered an equivalent position.

“This isn’t over,” Prenzler said after the judge’s rulings. “She did not have a disability. We have excellent grounds to appeal.”

However, several County Board members have openly questioned whether the case should have been settled. Members of the county Finance Committee have said the suit could have been settled two years ago for $60,000 — less than the cost of defense, according to Finance Committee Chairman Jack Minner, D-Edwardsville. A special County Board meeting was held in March to discuss the case. (Due to the ongoing litigation, the meeting was held in closed session, under the Open Meetings Act.)

And Dunnagan’s attorney, Lee Barron, wrote the case could have been resolved at the federal Equal Employment Opportunity Commission mediation hearing for $60,000. “Defendant refused to make any effort to settle the case,” Barron wrote in a series of letters to the county, obtained by the News-Democrat under the Freedom of Information Act.

The Dunnagan suit has become a political controversy, as Prenzler, a Republican, is challenging County Board Chairman Alan Dunstan, a Democrat. Dunstan has called for Prenzler to make a public apology to Dunnagan and the taxpayers.

“We could have settled this thing for $60,000,” he said.

In a press release dated March 24, and in public statements since, Prenzler called the questioning “political theater.”

“They don’t have their facts straight,” Prenzler said. “There was no concrete $60,000 offer to settle this case.”

When asked about the apparent discrepancy between Prenzler’s statements on March 24 and the settlement offers outlined in the correspondence between Barron and the county, Prenzler said, “I don’t recall those right now.”

After seeing copies of the correspondence, Prenzler said the settlement offers were merely Barron’s “recollection.”

Barron could not be reached for comment.

Documents outline settlement offers

The documents obtained by the BND include at least five offers to settle the suit, as well as a mediation before the EEOC. Barron wrote a number of letters to John Gilbert, the attorney representing the county.

In an email to Gilbert in November 2014, Barron offered to settle the case for 18 months’ salary, $15,000 for emotional distress and $18,000 in legal fees, as well as reimbursement for COBRA payments.

By March 2015, Barron’s offer had gone up to 24 months’ salary, COBRA payments, $20,000 for emotional distress and $20,000 for legal fees — a total of $155,000, he said.

“While this is a modest increase over the prior demand, it remains an extremely reasonable demand,” Barron wrote to Gilbert. “As time moves on and more time is devoted to this matter, it will only become more expensive to resolve short of trial.”

In July 2015, the price had gone up to $175,000, Barron wrote, and in October 2015 he said the $175,000 offer was “still on the table” until Oct. 30. As of December 2015, no settlement had been offered, he wrote.

The case went before the jury in the first week of February 2016.

After the verdict, Barron wrote in a letter dated Feb. 12 that the evidence was “overwhelming” that Dunnagan was fired due to her illness and he believes the size of the verdict confirmed the jury’s belief.

“The treasurer’s effort to demonstrate that he saved money by firing the plaintiff was unconvincing and not believable,” Barron wrote.

That letter included a post-verdict offer to settle the case for $605,000, before the judge added wage losses and attorneys’ fees. That offer also was rejected.

“As (of) this point, we have an excellent case for appeal, and we are going to appeal,” Prenzler said. “Beyond that, I have no other comment.”

Kelly Tracy, D-Marine, a member of the Finance Committee, called it “the most frustrating process I’ve ever been through.”

“We are supposed to be able to have a say and give our opinion, but it is never taken,” she said. “I am not a lawyer, but when it comes down to basic math, when you can settle something, I would have hoped to work the numbers and settle it.”

Tracy said Prenzler had told County Board members that the damages would be limited to $50,000, regardless of the verdict. But that argument was rejected by Judge Yandle on Monday: the cap only applies to employers with fewer than 100 employees, the opinion read.

“I did not expect it to be such a huge number,” Tracy said. “That tells me more about the case.”

But it isn’t only Democrats criticizing the handling of the case.

“We tried to get Kurt to settle and he refused,” said Roger Alons, R-Troy. “I am totally disappointed in Kurt, As far as I’m concerned, he should be fired.”

Alons said while Madison County is one of two or three Illinois counties in the black financially, the $1 million cost will hurt.

“He’s spending our money and our tax dollars,” Alons said. “I’ve lost all hope and appreciation for what Kurt’s trying to do.”

Other board members are supporting Prenzler’s position. Steve Adler, R-Alton, said he believes it was the Finance Committee’s job to oversee the suit, but that the committee is “hostile” to Prenzler.

“Mr. Prenzler is in a difficult situation because some of the reaction is defensive,” Adler said.

Adler said he believes the final decision on settlement lies with the state’s attorney’s office, not with Prenzler. “I don’t believe the officeholder is charged with that decision,” he said.

But state’s attorney Tom Gibbons said that while attorneys can advise, they cannot settle a case without a client’s permission.

“In every case, it is the client that makes the decision, and not the lawyer,” he said. “Mr. Prenzler and the treasurer’s office were the ones who were sued. The lawyer can give advice, the lawyer can make recommendations and explain possible outcomes. But it is always the client who makes the ultimate decision, and this case is no exception.”

Gibbons said he chose to retain outside counsel for this suit — namely Gilbert and his firm — because they are experts on defense on personnel matters.

“All I can say at this point is that we are will be studying the options, and that Mr. Prenzler will make the decisions as to how to proceed,” Gilbert said.

County Board members want input

The County Board should have more say in overseeing and handling lawsuits against the county, Adler said.

“At what point do you decide vanity will cost an unlimited amount of taxpayers’ money?” Adler said. “Sometimes you have to realize that as state’s attorney, it’s your job to make sure this is settled on a reasonable basis. If it were Kurt Prenzler’s money, that’s one thing, but this is everyone’s money.”

Michael “Mick” Madison, R-Bethalto, said he couldn’t judge whether Prenzler should have settled the suit, saying the final result was “unfortunate.”

“There’s a pretty heated political race going on,” Madison said. “In my heart, I don’t think Kurt was discriminating in any way. He felt he was justified. But timing is something to be discussed as well. We don’t often think about living in a lawsuit climate, but we sure are. … I think he was just trying to save the county money.”

Madison said he’d want to hear more evidence before deciding whether further appeals are a good idea. “Judging by the way this came out, I’d have to hear what counsel had to say about that,” he said. “It’s always a gamble, and you don’t know how things will come out, even if you know you’re right. I’d have to hear the evidence, but with the evidence I have, I think it’s not a good idea.”

Tracy said she was surprised to hear that there might be more appeals. “I’d have to wait and hear the facts that Prenzler has and see what basis he thinks there is for an appeal,” she said. “When a judge decides to file an injunction afterward … that just doesn’t happen. That tells me we need more information on this.”

As part of the final disposition Monday, Yandle issued an injunction ordering Prenzler not to continue any further discriminatory action. That is a highly unusual step in a case such as this, according to disability law expert Tom Kennedy, a member of the Land of Lincoln Task Force on disability rights law. He said it might indicate the judge expected there could be some retaliation, but Dunnagan is no longer a county employee.

“It is not something I’ve often seen,” Kennedy said. “If the judge saw fit to grant it ... it suggests the claims of the plaintiff were very strong.”

Tuesday was the 26th anniversary of the Americans with Disabilities Act.

“On a day when we are supposed to look how far we’ve come for Americans with disabilities, Madison County has a long way to go,” she said.

This story was originally published July 28, 2016 at 12:05 PM with the headline "Will ignoring settlement offers cost Madison County taxpayers $1 million?."