NewburyportNews.com, Newburyport, MA

October 8, 2012

Town will pay $10K for selectman's legal bills

By Jennifer Solis Correspondent
Newburyport Daily News

---- — WEST NEWBURY — The Town of West Newbury will pay $10,000 toward legal fees that former Selectman Tom Atwood accrued trying to defend himself against a lawsuit filed last year by the previous finance director.

Town Counsel Michael McCarron confirmed the amount of the fee settlement on Thursday but not before harsh words were exchanged among some of the parties involved.

For months Atwood has attempted to resolve over $40,000 in legal fees owed to the Boston law firm, Foley Hoag. According to McCarron, the Boston firm recently agreed to accept a settlement amount of $35,000. The Finance Board approved a reserve fund transfer to cover the $10,000 expense and Massachusetts Interlocal Insurance Association — the town’s insurance company — will pay the balance.

Atwood hired the firm after former Finance Director Tracy Blais lodged a lawsuit against him and the town in June 2011. Selectman Glenn Kemper and former Selectman John McGrath were also named in the suit, which asserts discrimination, defamation and failure to honor Blais’ contract. The men strongly reject the charges.

This summer an agreement in the Blais suit was reached; last month the Finance Committee approved a $40,000 reserve fund transfer to bind it. The balance of the as-yet-undisclosed settlement is on the warrant for a Special Town Meeting on Oct. 29.

According to a document filed in Salem Superior Court, Blais was initially seeking $500,000 in damages. However, discussions on the actual amount of the suit and other details have been held in private sessions.

Despite a vote taken by selectmen in 2011, which affirmed that as sitting selectmen at the time the suit was lodged Atwood and Kemper would be personally indemnified, the issue of the outstanding legal fees has dragged on. Last fall MIIA insisted that Atwood and Kemper retain the same lawyer, but agreed it could be one that was separate from the firm representing the town. In April, MIIA agreed to pay $9,000 in legal fees Kemper accrued prior to combining legal services with Atwood.

But the inability to resolve his bill was a source of great consternation for Atwood — and one that he believes is politically motivated. In a letter to selectmen issued on Oct. 4, Atwood said he feared the lack of follow through by selectmen sets a “troubling and dangerous” precedent.

“It is saying to our citizen volunteers on Planning Board, Conservation Commission and other municipal entities that they may be open to lawsuits in the future, but there is no guarantee of personal indemnification by the town or adequate and unbiased legal representation.

“More disturbing is that some individuals may not have had all the facts for proper decision-making and certain false representations were made in order to get approval of a settlement. Did the Finance Committee know that legal bills would not be fully settled when voting on the settlement agreement? Did the Board of Selectmen know this as well?” Atwood asks.

But in a statement on Thursday, McCarron strongly denied that he falsely represented any information. What was at issue, he said, was the reasonableness of the fees in question.

“The problem was that Mr. Atwood’s attorneys, Foley Hoag, billed four times what the other attorneys had charged for the same work. A review of the billing statements indicated several items which our insurer refused to recognize as legitimate expenses,” McCarron explained.

For months he facilitated negotiations between Atwood’s attorney and MIIA at no cost to Atwood and thought they had reached an acceptable agreement. McCarron said Foley Hoag previously agreed to the $35,000 settlement, but the resolution hit a snag last week when he learned the firm still intended to hold Atwood responsible for the difference between the original bill and the settlement amount.

“I indicated that this was unacceptable for the town and that the payment had to be accepted as full payment of this obligation,” McCarron said. Ultimately, Foley Hoag agreed Atwood would not incur any legal expenses.

McCarron noted that in a meeting with selectmen in June 2011, he repeatedly emphasized to Atwood that the legal fees must be “a reasonable request” and the “town must have some kind of control” over legal costs.

“At no time did I misrepresent the town’s position regarding its obligations to indemnify Mr. Atwood,” said McCarron, adding that he was “disappointed” that Atwood had not “accurately described the events” and hoped he “would apologize for his misstatements.”

Atwood says the bottom line is “the legal bills should have been resolved months ago and they were not” — a fact for which he faults Selectmen Bert Knowles and Dick Cushing.

“Overall, I blame Bert and Dick for playing politics with the whole thing, especially since they were the ones seeking the settlement,” he said.

But when reached on Friday, Knowles responded, “It’s totally the opposite. The onus for this foolishness is on him.”

Knowles and Cushing both strongly disagreed with a decision made when Atwood and Kemper were on the board not to renew the 19-year veteran finance director’s contract after questions were raised over the legality of annually bonuses selectmen had apparently signed off on for Blais over the years.

In March 2011 selectmen ordered a $25,000 forensic internal control review of the Finance Department. It revealed some cases of overpayment and underpayment in a sampling of employee payrolls, but the state Inspector General’s Office cleared Blais of all allegations of legal wrongdoing eight months later.

Blais’ suit contends the real issue was a desire for retaliation by Atwood and Kemper for an alleged sexual harassment complaint she issued against McGrath in 2007. Blais and McGrath eventually entered into a private grievance resolution, in which neither party waived or released their claims. McGrath resigned as selectman in the middle of his term in July 2008.