North Myrtle Beach has spent $214,000 in legal fees defending itself against a wrongful termination lawsuit filed in 2010 by William Bailey, the city’s former public safety director.
That amount includes money the city has spent counter-suing Bailey for fraud related to negotiations leading up to Bailey’s forced retirement, but it does not include costs for last week’s trial in that case.
City officials said Bailey misled them about his plans to apply for retirement and wanted Bailey to pay back $3,150 in lawyer fees tallied during the negotiations. A jury last week said Bailey did not commit fraud, handing the city an initial loss in its ongoing legal battle with the former public safety director.
Bailey’s wrongful termination lawsuit is pending and no trial date has been set.
City spokesman Pat Dowling said North Myrtle Beach has met its $200,000 deductible with the S.C. Municipal Insurance and Risk Financing Fund, an insurance pool administered by the S.C. Municipal Association.
“It is my understanding that SMIRF will now pay any costs above the $200,000 that the city has spent addressing William Bailey’s lawsuit,” Dowling said.
The insurance fund is supported through premium payments made by the municipal association’s 105 member cities. North Myrtle Beach’s premium for this year is $545,608. The city’s SCMIRF premium includes coverage for all property, general liability, auto collision and liability, crime, boiler and excess liability, Dowling said.
Kenneth Moss, a lawyer representing Bailey, said Bailey’s legal fees in the wrongful termination case total approximately $170,000.
The amount the city has spent tops Bailey’s initial offer in 2010 to settle the dispute out of court. Testimony during last week’s trial shows Bailey was willing to settle for $160,000 — approximately his cost of buying additional service years from the state’s Police Officers Retirement System to qualify for full retirement benefits.
Bailey retired from the city’s public safety department in April 2010 after former City Manager John Smithson gave him a resign-or-be-fired ultimatum. Bailey filed the wrongful termination lawsuit on June 11, 2010.
Bailey has said he was made a scapegoat for Smithson and other city officials who had grown weary of intense media scrutiny in the months following an April 2009 wildfire in the Barefoot Resort subdivision, where dozens of homes were destroyed.
Bailey ultimately was suspended from his job and then demoted to lieutenant after Smithson said the public safety director lied to him about how his gun had been stored on the December 2009 night it was stolen from Bailey’s unlocked truck.
Smithson said Bailey told him the gun had been locked in the glove compartment of his truck. Bailey has said he told Smithson and others that his gun was secured, but he never used the word “locked.”