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Ex–pension-board members to rake in $5.4 million?

Appellate court says city is required to pay criminal defense costs

The court case over whether the city should pay the legal costs for six former pension-board members is now one step closer to being a done deal. The most recent appeal filed by the city attorney's office in March of last year has been denied, leaving the city on the hook for $5,419,516 in legal fees, interest, and late fees incurred by the former board members.

The 4th District Court of Appeal published their final ruling on January 22. Despite the decision, the city council has voted to petition the state supreme court to hear the case.

The case dates back to the 2002 pension debacle, when pension-board members increased benefits while at the same time decreased payments, eventually resulting in an estimated $2 billion underfunded pension account. Around the same time, city-council members adopted a formal resolution that guaranteed legal indemnification for boardmembers in the case of any lawsuits.

At the time, councilmembers reasoned that boardmembers "may, from time to time be subjected to claims and suits for actions taken in [that] capacity...there is a need to protect and encourage individuals who volunteer their time and their talent to serve in the public interest."

In 2005, district attorney Bonnie Dumanis filed criminal charges against the former pension-board members. The accused — Cathy Lexin, Ronald Saathoff, John Torres, Mary Vattimo, Terri Webster, and Sharon Wilkinson — requested the city defend them in court. Failing to muster an adequate number of council votes, Lexin, Saathoff, Torres, Vattimo, and Wilkinson were forced to hire outside legal counsel.

Dumanis eventually dismissed the charges. Cleared of any wrongdoing, the pension-board members turned to the city to pay their legal fees. In January 2012, they sued the city for legal costs. Nine months later, superior court Judge William Dato ruled in their favor, granting them nearly $5.5 million in legal fees: Lexin, $1,708,621; Saathoff, $774,837; Torres, $434,621; Vattimo, $945,696; Webster, $1,060,297; and Wilkinson, $495,441.

"The plain language of the City's resolution requires it to pay criminal defense costs and there is no statutory impediment," reads the December 23 judgment. "The board members were not accused of theft-related crimes; the City was not a victim, but rather solicited the approval of [the 2nd pension agreement]; the board members based their defense request on a resolution the City passed to specifically provide them with a defense to any claim or lawsuit arising from their approval of [pension agreement]; the City has never found the board members acted with fraud or outside the course and scope of their employment; and the board members' approval...has effectively been determined not to be criminal."

According to Tom Mitchell from the city attorney's office, the city must submit their petition to the state supreme court by February 3.

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The court case over whether the city should pay the legal costs for six former pension-board members is now one step closer to being a done deal. The most recent appeal filed by the city attorney's office in March of last year has been denied, leaving the city on the hook for $5,419,516 in legal fees, interest, and late fees incurred by the former board members.

The 4th District Court of Appeal published their final ruling on January 22. Despite the decision, the city council has voted to petition the state supreme court to hear the case.

The case dates back to the 2002 pension debacle, when pension-board members increased benefits while at the same time decreased payments, eventually resulting in an estimated $2 billion underfunded pension account. Around the same time, city-council members adopted a formal resolution that guaranteed legal indemnification for boardmembers in the case of any lawsuits.

At the time, councilmembers reasoned that boardmembers "may, from time to time be subjected to claims and suits for actions taken in [that] capacity...there is a need to protect and encourage individuals who volunteer their time and their talent to serve in the public interest."

In 2005, district attorney Bonnie Dumanis filed criminal charges against the former pension-board members. The accused — Cathy Lexin, Ronald Saathoff, John Torres, Mary Vattimo, Terri Webster, and Sharon Wilkinson — requested the city defend them in court. Failing to muster an adequate number of council votes, Lexin, Saathoff, Torres, Vattimo, and Wilkinson were forced to hire outside legal counsel.

Dumanis eventually dismissed the charges. Cleared of any wrongdoing, the pension-board members turned to the city to pay their legal fees. In January 2012, they sued the city for legal costs. Nine months later, superior court Judge William Dato ruled in their favor, granting them nearly $5.5 million in legal fees: Lexin, $1,708,621; Saathoff, $774,837; Torres, $434,621; Vattimo, $945,696; Webster, $1,060,297; and Wilkinson, $495,441.

"The plain language of the City's resolution requires it to pay criminal defense costs and there is no statutory impediment," reads the December 23 judgment. "The board members were not accused of theft-related crimes; the City was not a victim, but rather solicited the approval of [the 2nd pension agreement]; the board members based their defense request on a resolution the City passed to specifically provide them with a defense to any claim or lawsuit arising from their approval of [pension agreement]; the City has never found the board members acted with fraud or outside the course and scope of their employment; and the board members' approval...has effectively been determined not to be criminal."

According to Tom Mitchell from the city attorney's office, the city must submit their petition to the state supreme court by February 3.

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1

Three-quarters of a million taxpayer dollars for former Firefighters Union honcho Ron Saathoff who masterminded the simultaneous pension-hikes-cum-deferred-city-payments? Testament to America's Finest City's world-class chicanery!

Jan. 24, 2014

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4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
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