Liability costs up for city, county
    $2.4 million and $11 million paid, respectively, to settle claims, suits against governments last fiscal year
    By Cameron Jahn and Phillip Reese -- Sacramento Bee Staff Writers
    May 5, 2005

    Whether it was negligence or not, it cost Sacramento County $1.5 million when a Sheriff's Department K-9 dog tore a 3-inch chunk of flesh and nerve from Jennifer Graham's calf five years ago.

    Same goes for the city of Sacramento, which paid the family of Donald Edward Venerable Jr. $1,050,000 after he was shot and killed by police officers who mistook his cell phone for a gun in 2001.

    It's incidents like these that sent lawsuit settlements paid out by the city and county skyrocketing last year, reversing years of declining payouts and defying efforts to stave off big-ticket settlements.

    Taxpayers who feel their local government is liable for damages - after incidents as varied as a false arrest to sexual harassment - are allowed to file a claim and then a lawsuit.

    Graham, who was 19 during the 2000 attack, was left unable to raise her left leg, said her attorney, Christopher Wood.

    "She'll never be able to lift her foot again," he said. "She'll never be able to walk normally again."

    It cost city officials $2.4 million to settle lawsuits resulting from claims during the fiscal year that ended in June, doubling the $1.2 million bill from the prior year.

    In Sacramento County, payouts and legal fees on lawsuits totaled more than $11 million during that period, up from $6.5 million the year before. Next year, the bill could be even larger as the county begins cutting checks for its most costly suit on record, a $15 million class-action settlement for victims of the illegal strip search policy in the Sheriff's Department.

    While last year's increases of 69 percent in the county and almost 100 percent in the city were driven primarily by a handful of large settlements, liability costs in the county topped $12 million and $3 million in the city four years ago.

    Many claims are settled before they reach the lawsuit phase. Those settlements are usually smaller and often deal with property damage - a fender-bender where the city was at fault, for example. Last fiscal year, the city's risk manager approved around $800,000 to settle claims before they became lawsuits. Numbers for the county on such claims were unavailable.

    The Sheriff's Department continues to generate the majority of the liability lawsuits filed against the county, with about 60 percent per year, according to an annual report on the county's claim costs. Allegations of civil rights violations and excessive force are still the most common filings in lawsuits against the Sheriff's Department, the report said. The city's annual reports do not contain similar breakdowns.

    Almost half of the money paid out by the city in lawsuit settlements last year went to compensate Venerable's relatives after police shot and killed the 33-year-old during the early morning hours of Feb. 9, 2001. The two officers involved and one nearby resident on Mandy Drive said Venerable reached into his jacket pocket, took something out, assumed a shooting stance and pointed the object at an officer. Other witnesses said Venerable had his hands above his head.

    "No one claims he was armed," said Andrew Schwartz, one of the lawyers who represented the Venerable family. "It was horrible."

    The city handles almost all liability lawsuits in-house, but additional costs pushed the city's overall liability bill from $2.2 million to $2.4 million for the last fiscal year.

    The county farms out its claims to outside defense attorneys, and in each of the last three fiscal years, attorney's fees have made up at least one-third of the overall liability costs. Last fiscal year, for example, payouts totaled $6.6 million. Fees, $3.3 million in lawyers' bills and other expenses, drove the overall liability costs to $11 million.

    The recent spike in payouts demonstrates what can happen to residents - and government budgets - when maintenance is put off or ignored.

    Richard Garcia won a $1.5 million settlement from the county after he fell from an Elverta Road bridge into the bed of the Dry Creek Parkway in 1997, causing brain damage and leaving him a quadriplegic, according to the claim. The bridge's cable safety railing was loose, the claim said.

    Esther Bennett's case was simpler. While walking down Seventh Street in 2002, hands in her pockets, Bennett tripped over a defect in a city sidewalk, fracturing her eye socket and right hip and displacing her hip socket, said her attorney Hank Green-blatt.

    The city had long known about the defective sidewalk, but had done nothing about it, he said.

    "Her hands couldn't break the fall so the street did," Greenblatt said.

    Bennett settled with the city for $220,000, city records show.

    A string of other lawsuits involve workplace harassment. Sacramento County paid Connie Almeida and Marylou Smith $125,000 each to resolve allegations of sexual harassment at the Department of Human Assistance's Auburn Boulevard office.

    Almeida said she and Smith were harassed in 2000 after reporting that an extramarital affair between two other colleagues was affecting the work environment.

    Almeida has since retired from her cashier's job, but Smith stayed on with the county and now works in a different department.

    "We complained about it, and all hell broke loose for it," Almeida said. "It was like if you saw it, keep your mouth shut, and pretend nothing happened."

    Out of 67 damage lawsuits closed against the city last fiscal year, officials paid out on 20. The county paid settlements in 47 of the 120 lawsuits closed last year.

    Both entities are self-insured, which means taxpayers foot the bill, but those payouts are only a tiny portion of their overall budgets.

    Sacramento County officials will settle a claim to avoid costly litigation or when they suspect they may be held liable, said County Counsel Robert Ryan. Before approving a settlement, county officials require a plan to correct the problem that sparked the claim.

    But the county resolved 61 percent of its cases last year without making any payments.

    Following a different strategy, City Attorney Samuel Jackson said the city will not settle frivolous cases just to get rid of them.

    "If it costs us $5,000 to get rid of a $1,000 claim, we'll do it because that is going to get rid of 50 of these types of claims," Jackson said.

    Jackson noted that the city settled about seven out of 10 cases last fiscal year without paying out any money. "That's pretty high," he said.


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