Indiana Retirees Settle Severance Lawsuit

A lawsuit filed last year over severance pay for seven retired Logansport, Indiana firefighters has been settled, but the decision has the local media asking a lot of questions.

Logansport firefighters Steve Crispen, William Hassett, Randy Landis, Kim Costello, Rex Danely, David Huff and James McMinn all accepted a retirement buyout in 2010 that gave them $26,000 each. After they accepted the offer and retired, the city refused to pay them for six weeks of unused vacation time that each had on the books.

The retirees sued in July 2011 claiming a violation of the Indiana Wage Payment Act. According to the suit, each member was claiming roughly $4,500 in lost wages.

The settlement, approved by the Logansport City Council on September 4, 2012, grants the firefighters $75,000 in damages, with $37,500 going to the attorneys and $37,500 going to the retirees.

An article last week by Caitlin Huston of the Pharos-Tribune shows the media has been trying to learn more about the settlement, but both sides remain quiet about the details beyond confirming the fact that the city’s insurer, Travelers, will pay $37,500, and the other half will come from the city’s rainy day fund.

At the heart of the media’s inquiry is no doubt the math: $4500 x 7 members = $31,500 in damages. Why would a city agree to pay $75,000 for a $31,500 claim? The article raises a couple of sinister implications:

One issue involves a change of city administration. The new mayor, Ted Franklin, is a firefighter himself, although he is on a leave of absence from the department. Could that have influenced the decision to settle?

Another issue raised is the fact that the new city attorney, Randy Head, actually represented the firefighters in the suit prior to accepting his position with the city. An outside firm was hired to represent the city in the case to avoid the obvious conflict of interest. Could that have influenced the decision to settle?

Left un-discussed in the article is the likely real answer to why a $31,500 case was settled for $75,000: The Indiana Wage Payment Act. The law grants double damages to employees who are wrongfully denied wages, including wages that may be due and owing upon retirement. Take a look:

IC 22-2-5-2 Failure to pay; damages; actions for recovery

     Sec. 2. Every such person, firm, corporation, limited liability company, or association who shall fail to make payment of wages to any such employee as provided in section 1 of this chapter shall, as liquidated damages for such failure, pay to such employee for each day that the amount due to him remains unpaid ten percent (10%) of the amount due to him in addition thereto, not exceeding double the amount of wages due, and said damages may be recovered in any court having jurisdiction of a suit to recover the amount due to such employee, and in any suit so brought to recover said wages or the liquidated damages for nonpayment thereof, or both, the court shall tax and assess as costs in said case a reasonable fee for the plaintiff’s attorney or attorneys.

Thus the city was on the hook for $63,000 plus attorneys fees had the matter gone to court. Why would the media (fair and balanced) overlook such an explanation?

It certainly is more sensational to imply some of mischief on the part of city officials than bore folks with the details of the Indiana Code. In the mean time, what about the folks who were responsible for making the decision to withhold the $4,500 from each of the retirees in the first place?

More on the story.

About Curt Varone

Curt Varone has over 40 years of fire service experience and 30 as a practicing attorney licensed in both Rhode Island and Maine. His background includes 29 years as a career firefighter in Providence (retiring as a Deputy Assistant Chief), as well as volunteer and paid on call experience. He is the author of two books: Legal Considerations for Fire and Emergency Services, (2006, 2nd ed. 2011, 3rd ed. 2014) and Fire Officer's Legal Handbook (2007), and is a contributing editor for Firehouse Magazine writing the Fire Law column.

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