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 Town, Insurer Squabble Over Attorney Fees

January 9, 2008 - The town of Knightstown and its insurer spent more than two years fighting The Banner's efforts to learn the terms of a $75,000 lawsuit settlement paid to a former Knightstown police dispatcher in 2003.

Now, more than a year after The Banner won a high-profile public access lawsuit against them, the town and the town's insurer are facing off against each other. At issue is whether both the town and the insurer will be responsible for paying The Banner's attorney fees, court costs and litigation expenses, or whether the town alone will pay.

Henry Circuit Court Judge Mary Willis ruled last March that the town and its insurer, Governmental Interinsurance Exchange/Governmental Insurance Managers, were both "jointly and severally" liable to The Banner for $67,612.46 in attorney fees, court costs and expenses of litigation. In a brief filed last fall with the Indiana Court of Appeals, however, GIE/GIM argues that it should not be responsible for any of this amount.

While The Banner initially lost its case before Willis, the Indiana Court of Appeals reversed her in late 2005, ruling that the settlement agreement in issue was, in fact, a public record. As the prevailing party, the state's Access to Public Records Act entitled the newspaper to recover reasonable attorney fees, court costs and other litigation expenses.

In the case now before the Court of Appeals, filed in 2007, The Banner argues that Willis' award of attorney fees and costs was too low. While attorneys for the town argue that Willis actually awarded $12,400 too much to the newspaper, attorneys for GIE/GIM did not challenge the $67,612.46 award, but filed a cross-appeal claiming they should not have to pay any part of it.

In their cross-appeal, GIE/GIM claims the Court of Appeals' 2005 ruling did not reverse Willis' determination that the insurer was not a public agency under the APRA. Rather, they argue that ruling merely reversed Willis with respect to Banner's claims against the town, which GIE/GIM says should be solely responsible for any attorney fees, costs and expenses.

Not surprisingly, attorneys representing the town disagree with the argument being advanced by the town's insurer.

"GIE/GIM clearly had an interest in the content of the Settlement Agreement," town attorneys David Copenhaver and Joel Harvey wrote in a brief they filed with the Court of Appeals in early December. Arguing that that GIE/GIM "was vested with complete control over the defense and settlement" of the dipsatcher's case, chose the attorney who defended the town and its employees in that case, and fought in court to prevent disclosure of the settlement, they said the insurer "should be jointly and severally responsible with Knightstown to pay The Banner's reasonable attorney fees and costs."

Should the Court of Appeals determine that GIE/GIM is not liable for any of The Banner's attorney fees and other expenses, the town's attorneys argue that the trial court should recalculate the amount the newspaper is owed.

It remains to be seen whether the Court of Appeals will consider the arguments advanced by Copenhaver and Harvey in their latest brief. Attorneys for GIE/GIM and The Banner have both argued in subsequent court filings that the town's attorneys did not properly follow court rules regarding brief filing and that the brief should be disregarded or stricken.


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