In 2011 and 2013, Michele A. Gordon directed the City to make payroll deductions for her short term and long term disability benefit policies.  Ms. Gordon subsequently began making payments on the policies.  In January 2014, Ms. Gordon injured her wrist and submitted claims to the disability policies, which were denied. The insurance providers of the policies denied Ms. Gordon and took the position that Ms. Gordon failed to submit her paperwork and/or her proof of insurability as it related to her claims for Short Term and Long Term Disability.  The City responded that the City was not in possession of the paperwork. The policies were presented to the City employees and the policy is identified as a City Policy.  Ms. Gordon filed a lawsuit against the City, in addition to Reliance Insurance and McKinley Insurance Services as agents of the City.

Based upon the facts of this case, there is an argument that the City was negligent as it relates to the City’s following up with the carrier regarding the acceptance of payments and the status of the actual issuance of the policies.  There is the strong possibility that this inaction would result in monetary damages against the City.

The parties participated in mediation held on September 25, 2017, and thereafter negotiated further and agreed to globally settle the case for a total amount $210,000, inclusive of fees and costs.  Gallagher Bassett Services, Inc., is authorized to make payment of $80,000 on behalf of the City, subject to City Council approval.