Atlantic Beach misses settlement payments, found in contempt of court

01/23/2013 3:28 PM

01/24/2013 7:50 PM

Atlantic Beach was found in contempt of court Wednesday for failing to pay money owed in a settlement agreement two months in a row, said Circuit Court Judge Larry B. Hyman.

Hyman also denied the town’s contest of the settlement involving Councilwoman Carolyn Cole and the Tyson Beach Group, dismissing a motion for relief from the judgment that requires the town to pay more than $7,700 a month for the next four years.

The town settled two long-standing lawsuits in October, with payments to begin in November 2012. The first payment was made as scheduled, but the December and January payments were not made.

On Wednesday, Hyman gave the town 30 days make the two missing payments, plus $4,876 to Charles Jordan – Cole’s attorney – for fees owed to him.

Mayor Retha Pierce testified Wednesday that the town didn’t authorize former town manager Calvin Blanton to settle a pair of lawsuits. She also argued that Blanton didn’t inform the council of required payments following the settlements – the reason she cited for the town missing two payments. After hearing her testimony Hyman said he found it not credible and not supported by documents provided to the court.“I believe that the town of Atlantic Beach did authorize Mr. Blanton to enter into a global settlement,” Hyman said. “He appeared in this court for that purpose. The settlement was entered into an order was issued. No appeals have been taken on that order … I don’t think there’s any doubt that she (Pierce) knew about it and everyone else [on council] knew about it.”

The town was summoned to court Wednesday because the December and January payments had not been received by Thomas & Brittain P.A.

One suit was for non-payment for Carolyn Cole’s services as town manager. The other was over a $190,000 loan secured by Cole through the Tyson Beach Group, a landholding company involving Cole, her former husband Gerald Montgomery and Catherine Aldridge.

The Tyson Beach Group case had been pending since March 2008 and had accrued interest totaling more than $450,000 before the settlement. The town saved about $225,000 in interest by settling.

In 2010 Hyman awarded Cole $83,333 plus $38,695.62 in interest. Before the settlement, the town had partially fulfilled the payment, but still owed $90,127.24. Additional interest had accrued since the judgment. That settled for $105,794.36.

Starting in Nov. 2012, the town was ordered to pay $7,763.20 monthly for 48 months to a trust account of Thomas & Brittain P.A.

Pierce said the first payment was made while Cole and Blanton were authorized check signers and the subsequent payments were not made because Town Council didn’t know they needed to be.

If the town fails to make the December and January payments within 30 days, Hyman said the court will reconvene and he will impose sanctions against Atlantic Beach.

Hyman said he was particularly concerned about a letter written by Samuel Howell, the attorney hired by the town to negotiate the settlements, on Oct. 9, 2012 to Jordan.

Pierce said that Howell was left out of the negotiations, and Blanton acted outside his authority in the settlements “purposefully … to help Councilwoman Cole.”

The letter from Howell, however, said he was involved and that Blanton had authority to enter into the settlement agreements.

Pierce said she didn’t think the town could afford the payments – roughly costing $93,000 annually – though town’s 2012-2013 budget includes $101,079 for anticipated settlements.

Jordan asked Pierce during the hearing if the settlement with Cole and Tyson Beach group was less than the budgeted amount.

“It’s true,” she answered. “But she’s not the only one that’s supposed to get some money from the settlements and we are very limited in funds.”

Pierce testified that the town has settlements that exceed $100,000 but couldn’t specify what those debts are.

“I can’t tell you which ones,” she said. “Based on what we’ve been reported, the different ones we owe, it adds up to a whole lot more than $101,000. And if it does not someone should have informed council. You need to let us know where we are. That’s what a town manager is for.”

She said the town always intended pay what’s owed.

“We realize that we owe this money and we also owe other monies that the court stipulated the town is supposed to pay,” Pierce said. “We were trying to get a settlement so that we could meet it honorably. You know we can’t pay 10 cents if we can only afford five cents.”

Blanton, however, said the settlement was doable for the town and the total owed from litigation did not exceed what was budgeted.

“It was my job to pretty much look at the overall welfare of the town and to use my judgment as such,” he said. “In looking at the extent of the monies that had already been spent on the case and what the potential downfall is of any one-time payment or lump-sum payment of that case or any of the other cases it would render the town in a position that I feel like is unrecoverable. It was the best thing to do.”

If the settlements weren’t entered into, Blanton said it could’ve meant bankruptcy for the town.

He also said he told Town Council about the settlement during executive session at a meeting and said he placed the final agreement in each council member’s mailbox at Town Hall.

He said he didn’t have the chance to tell council after the agreement in October because he was sick for the first meeting in November, the second meeting was canceled. He was terminated in a special meeting Dec. 13.

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