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 Council Agrees to Pay Half of Legal Fees

March 18, 2009 - The Knightstown Town Council took a step last week toward satisfying a portion of the court judgment owed to The Banner as the result of the town and its insurer losing a high-profile public record lawsuit to the newspaper in 2006.

During a brief special meeting March 10, the council voted to 4-0 to approve borrowing $45,000 from the town's electric utility. This money is to be used to pay half of the $55,212.46 judgment and post-judgment interest owed to The Banner for attorney fees and court costs, according to the terms of a proposed settlement that was also approved; the town's insurer, according to the proposed agreement, will pay the other half.

The Banner sued the town and its insurer in 2004 after they refused to provide a copy of the settlement agreement that ended a former police dispatcher's civil rights lawsuit against the town and town's police department. While the town and insurer won at the trial court level, the Indiana Court of Appeals ruled in The Banner's favor in late 2005, in a unanimous decision that was left standing by the Indiana Supreme Court.

In March 2007 Henry Circuit Court Judge Mary Willis entered a judgment against the town and its insurer, holding them jointly and severally liable for $67,612.46 in attorney fees and court costs. After a second appeal, the Court of Appeals directed Willis to clarify discrepancies in her first order, and last August Willis reduced the judgment to $55,212.46.

The start of last week's meeting was delayed several minutes while Council President Valerie Trump waited for a return phone call from the town's attorney, Gregg Morelock. A question had arisen as to whether the interest should be calculated as of the date of the March 2007 judgment, as The Banner maintains, or as of the August 2008 date, as the proposed settlement agreement stated.

Once the meeting started, Trump said that Morelock told her a representative of the town's insurer said the agreement had already met with the approval of the attorney for the newspaper. Kurt Webber, legal counsel for the Banner, says this is not true and that the town's insurer never contacted him to discuss any proposed settlement.

Despite the town council's approval of the proposed settlement agreement, the agreement has not yet been accepted by The Banner. In addition to the question about whether the newspaper is entitled to 6 months or 27 months of interest, Webber noted other provisions in the proposed agreement that he said weren't advantageous to his client.

As one example, Webber noted that the proposed settlement would require The Banner to release the town and it's insurer from any further liability with respect to this matter. However, the agreement does not provide the newspaper with a similar release from the town and its insurer.


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