Local governments paid over $5.6 million to settle or avoid lawsuits
Local governments in Horry County have doled out more than $5.6 million since 2014 to settle or avoid lawsuits.
Some of these payments, obtained by The Sun News through Freedom of Information Act requests, included nondisclosure separation agreements, which aim, in part, to prevent either party from publicly making disparaging remarks.
Based on the records received, the City of North Myrtle Beach is the most frequent local user of these types of agreements as they’ve paid nearly $46,000 to nine departing employees during the past five years.
The language in each release agreement varies slightly — some are characterized as a resignation in lieu of termination, others state the city is accepting the employee’s resignation and one specifies that the employee can continue participating in the city’s group health plan — but they share several similarities.
Each agreement requires the departing employee to: waive their right to sue the city or anyone acting on its behalf; maintain the agreement in the strictest confidence; not make negative statements about the city, its officials or employees; agree that neither the city nor its officials or employees has admitted any liability; and agree to pay back the settlement amount plus applicable attorney’s fees if they breach the agreement.
Patrick Dowling, the city’s public information officer, told The Sun News that it’s not common for the city to offer employee nondisclosure separation agreements — for context, he noted that 115 full-time employees have left the City of North Myrtle Beach since the beginning of 2014 — but NDSAs are considered on a case-by-case basis with considerations for protecting taxpayers by removing the risk of litigation in the future.
The city has a firsthand look at how costly litigation can be with a former employee.
North Myrtle Beach’s former public safety director William Bailey, who retired in 2010 after he said the city manager gave him a resign-or-be-fired ultimatum, filed a wrongful termination suit against the city, which he alleged was scapegoating him for numerous problems.
Previous Sun News reports show the city spent $214,000 in legal fees through August 2014 defending itself against Bailey’s suit and counter-suing him for alleged fraud.
Records recently obtained through FOIA show the city ultimately settled with Bailey for $350,000. Previous reports state that Bailey initially was willing to settle for $160,000.
Dowling said the recent use of nondisclosure separation agreements is not a result of how the situation ended with Bailey, who recently was elected to represent District 104 in the state House of Representatives.
Additional records obtained by The Sun News indicate the City of Conway and Town of Surfside Beach also have used nondisclosure agreements, though the exact language of those agreements was not shared.
Conway has used four nondisclosure agreements since 2014, including three settlements totaling more than $193,000 with former firefighters who filed lawsuits alleging discrimination.
Surfside Beach used three nondisclosure agreements during the past five years, including a $17,500 settlement with the owners of Nibils, who filed a lawsuit alleging unfair process when the city didn’t give them the option to renew their restaurant’s lease on Surfside Beach Pier.
Other local governmental agencies claimed no nondisclosure agreements during the past five years, or at least no knowledge of any.
City of Myrtle Beach spokesman Mark Kruea said it’s city practice not to execute such agreements.
Lawsuit settlement totals
Myrtle Beach has settled 21 real or threatened lawsuits during the past five years totaling about $573,000, according to the records obtained through The Sun News’ FOIA request.
Those settlements included: a $50,000 payment to Tiraek Nesmith, who sued the city in 2016 after he claimed to be falsely arrested and detained for 34 days in relation to a fatal 2015 shooting at Club Levelz; a $5,000 payment to Patrick Sadek, a former city engineer who sued in 2014 for wrongful termination; and an $18,000 payment to Stephen Owens, who sued claiming harm when city police failed to give him his diabetes medicine after they arrested him.
North Myrtle Beach has paid 28 settlements since 2014 totaling more than $1.5 million, according to records.
Those settlements include: a $300,000 payment to William Parillo, who sued in 2017 claiming he suffered major injuries due to faulty equipment at the North Myrtle Beach Aquatic and Fitness Center; a $120,000 payment to William Randall Lee, who sued in 2015 claiming injuries after a city employee driving a city vehicle crashed into his motorcycle; and a $193,500 payment to Sue and Alton Hopper for a sewer backup that caused damage to their property.
Conway has settled nine real or threatened lawsuits during the past five years totaling about $785,000, responsive records show.
Those settlements include: a $231,000 payment to Khalil Moore that included a nondisclosure agreement after he sued in 2015 claiming false imprisonment in relation to a homicide of a former police detective’s brother despite living in a different state at the time; and a $270,000 payment to John Dooley for “cyclist accident,” though no suit was filed.
Surfside Beach has paid seven settlements since 2014 totaling $165,000, according to responsive records.
Those settlements include: a $40,000 payment to Sabrina Adair Morris, who was fired and then reinstated as director of the town’s Planning, Building and Zoning Department; and a $50,000 payment to the estate of Billie Waylon, whose family filed a wrongful death suit after Waylon died in a vehicle collision shortly after being pulled over by Surfside police for driving without lights.
Horry County has settled 42 real or threatened lawsuits during the past two years totaling more than $1.9 million, according to online reports with the South Carolina Insurance Reserve Fund.
Those settlements include: a $500,000 payment to Alex Robinson, who filed a suit claiming false imprisonment after the state Supreme Court ruled a Horry County police officer “knowingly and intentionally made false statements in the search-warrant affidavit” that led to his arrest; a combined $387,000 in payments to three different women who filed suits claiming misconduct by former Horry Police detective Allen Large; and a $125,000 payment to John Thomas Clark, who filed a suit claiming to be assaulted by another prisoner while being held in J. Reuben Long Detention Center.
These figures do not include a reported $2.75 million settlement announced in early 2018 to Julian Betton, who sued in 2015 after being shot nine times by drug agents.
Jimmy Richardson, 15th Circuit solicitor, who oversees the DEU, was among the defendants who were dismissed from the suit after the settlement.
A $750,000 payment to Betton appears in the SC Insurance Reserve Fund’s online records, but the agency is listed as the SC Commission of Prosecution Coordination. Other settlement money still outstanding is through a different insurance company, according to Richardson.
Horry County Schools has paid 16 settlements since 2016 totaling about $526,000, online reports with the SC Insurance Reserve Fund show.
Those settlements include: a $305,000 payment to Kevin Simmons, who filed a suit claiming his son fell from a zip line and ruptured his spleen while training with Junior Reserve Officers’ Training Corps at St. James Middle School; a $31,000 payment to Holly Jeffreys, who filed a suit claiming her daughter was severely burnt by scalding food at Forestbrook Elementary School; and a $21,000 payment to Janet Williams Threatt, who filed a suit claiming her son was stabbed with a hypodermic needle by another student at Myrtle Beach Middle School.
The Town of Aynor responded to The Sun News’ FOIA request that it has not executed any lawsuit settlements during the past five years, and the City of Loris responded that it was unable to locate any responsive records due to major flooding in its records room.
Where does the money come from?
Most of the local government agencies have insurance that pays all or part of these settlements.
Horry County and Horry County Schools are insured through the state’s Insurance Reserve Fund.
Delbert Singleton, a spokesman for the state Fiscal Accountability Authority, told The Sun News that the fund functions as a “governmental self-insurance operation with the mission to provide coverage specifically designed to meet the needs of governmental entities at the lowest possible cost.”
Like any insurer, the fund issues policies, collects premiums and pays claims in accordance with its terms and conditions, according to Singleton.
Conway and Surfside Beach are insured through the SC Municipal Insurance and Risk Financing Fund, an insurance pool administered through the SC Municipal Association.
Samford Graves, counsel for the City of Conway, said the municipal fund sometimes makes settlements that don’t involve a lot of communication with the city.
North Myrtle Beach once used the SC Municipal Insurance and Risk Financing Fund — it paid for much of the Bailey settlement — but they are currently self-insured, according to Dowling.
“It makes good financial sense for taxpayers when the totality of the City’s history is taken into account,” Dowling wrote in an email. “There may be some ‘bad’ years now and then from a claims point of view, but historically the taxpayers come out on the winning end financially.”
He noted that the city does carry insurance with outside agencies on its assets.
Kruea said Myrtle Beach pays its settlements through a variety of sources, including a third-party insurer and the city’s general fund.
The Sun News sent the same FOIA request to each local government agency seeking records that reference payments made by, or on behalf of, the agency to settle actual or threatened lawsuits during the past five years.
Horry County Schools directed The Sun News to the SC Insurance Reserve Fund website, and those records also included settlements from Horry County. Those records were only available for settlements paid through June 30, 2018.
The Sun News took the records received or found and matched each payment, when applicable, to an accompanying lawsuit filed in the 15th District Judicial Circuit Public Index to determine the exact nature of each settlement.
It’s important to note that settlement agreements do not imply any guilt on behalf of the agencies.
The figures compiled for each agency only represent money paid through the settlement and not any related legal fees or money awarded to a plaintiff by a verdict.