PUBLIC HEARINGS

City Manager John Lawton stated that On March 10, 2001, Jeremy Parsons was seriously and permanently injured while attending a car show at the Cascade County Fairgrounds in Great Falls, Montana. Thereafter, Jeremy Parsons filed legal action against the City and its insurance carriers for compensation of injuries sustained, allegedly resulting from the negligent installation and maintenance of a steel beam parking barrier, on the premises. Whereupon, the City filed a Third Party Complaint against *****, who were the consulting engineers for design and installation of said barrier.

As a result of settlement negotiations by the City's attorneys and insurance carriers with the attorneys for the claimants, Jeremy Parsons and his parents, Jerome and Kelly Parsons, a settlement has been reached whereby $6,750,000 will be paid to the Plaintiffs in consideration of a full and complete release by said Plaintiffs to the City of Great Falls; and, in further consideration, the City shall assign all of its rights to further insurance coverage against National Fire Insurance Company of Hartford/CNA Insurance Company to Plaintiffs.

Heretofore, *****'s insurer settled claims with the Plaintiffs for ***** and was released.

The proposed settlement with the City has been negotiated and apportioned among the City's insurance carriers as follows:

First claim was Jeremy Parsons. The first amounts that had been agreed to be paid out under the settlement agreement were Montana Municipal Insurance Authority, $750,000. Second amounts were Specialty National Insurance Company $4,300,000. This company was an excess carrier, who had coverage over and above MMIA. These were the two primary amounts in this agreement. National Fire Insurance Company of Hartford/CNA Insurance Company, $1,000,000 representing the policy limits of a general liability policy; and, the assignment by the City to the Plaintiff of all rights of further coverage on an excess policy with limits of $1,000,000 (the right of claim against this excess policy is disputed).

It was agreed to settle all claims of Jeremy Parsons against the City of Great Falls in consideration of a complete release with a total assigned value of $13,500,000. The City of Great Falls does not make any representations as to the viability or enforceability of any assigned claims against CNA Insurance Company relative to the difference between $6,050,000 to be paid as detailed above, and the total agreed settlement of $13,500,000. This was the total value assigned to this claim by the plaintiffs to the Jeremy Parsons' case. This agreement releases the City of all further liability in exchange for the City's assignment of its rights under the policies to the plaintiffs. This agreement ends the City's involvement in this claim.

There was a claim by Jerome and Kelly Parsons' (parents of Jeremy Parsons). The Montana Municipal Insurance Authority, had agreed to pay out $500,000 and Specialty National Insurance Company, the same excess policy carrier had agreed to pay $200,000 for a total of $700,000. The plaintiffs are making a claim under the $1,000,000 CNA user policy, but CNA was not a party to this agreement had not agreed to pay under the policy. Assignment by the City to the Plaintiffs of all rights for further coverage against National Fire Insurance Company of Hartford/CNA Insurance Company for Plaintiffs' claims (such right of coverage against CNA is disputed);

It was agreed to settle all claims of Jerome and Kelly Parsons against the City of Great Falls in consideration of a complete release with a total assigned value of $2,000.000.00. The City of Great Falls does not make any representations as to the viability or enforceability of any assigned claims to said Plaintiffs against CNA Insurance Company relative to the difference between $700,000.00 to be paid as detailed above, and the total agreed settlement of $2,000,000.00.

All of the funds in settlement of Parsons' claims will be paid by the City's and *****'s Insurance Carriers. The City will not be obligated to make any other payment in settlement of Jeremy Parsons' or Jerome and Kelly Parsons' claims.

In consideration of the proposed Settlement Agreement and assignment of City's claims against CNA Insurance Company, Plaintiffs will fully, completely and forever release the City from any and all current claims and future claims they may have arising out of the March 10, 2001, incident.

Please note, this settlement and release does not include the claims made by Charlene Herseim, mother of, Raeleigh Parsons, for and on behalf of said daughter of Jeremy Parsons. The MMIA is currently negotiating with the attorneys for Ms. Herseim for a settlement of such claims.

There was one outstanding claim and that was Jeremy Parsons' daughter. The insurance companies and the attorneys are negotiating for the claim. It was probable that it would not come back to the Commission. This would be resolved either through negotiations or possibly through a trial. Normally insurance claims are handled by the insurance companies. The City would monitor the claims through the activities with MMIA. The City does not bring the claims back to the City Commission for approval. The reason the City was bringing this one to the City Commission was because there was still disputed amounts to be released from further obligation and the City had to assign their rights under the policy to the plaintiffs. That was the reason for the City Commissions approval. The City has had a number of attorneys working for the City on this claim. John Alexander, Kevin Meek and Curtis Drake from Helena. Dave Gilko had been involved in the final negations.

Commissioner Hinz was concerned about not being released on the daughters claim. City Manager John Lawton stated that the City was not, but that this was a separate claim under the City's insurance policy. The claim was being handled by the insurance companies. It was very probable that the entire claim would be settled by the insurance companies through the City's insurance program. The City's insurance coverage would be adequate to handle this claim. Beyond what the City pays for insurance there have been no City pay outs under these claims.

Commissioner Rosenbaum stated that each claim was handled separately in the claims. This would come separately and the MMIA would handle it as a third claim. City Manager John Lawton stated that it was an opened claim and the insurance companies are handling it. Negotiations are continuing in Jeremy Parsons' daughter case.

Kevin Meek represents the City with respect to the claim by Raeleigh, the claim was correct about the amount of coverage that was left. There was two $750,000 claims under the statue limit policy available for $750,000 paid out on Jeremy's claim. $500,000 had been paid to the parents. There was $250,000 left for Raeleigh who had already received $275,000 from another source. Then we still have Specialty National Insurance and then if there was still this other CNA policy as well. Raeleighs' claim is likely the lesser of the claims. There should be adequate money to cover this.

John Alexander, represents the City of Great Falls. Insurance companies retain attorneys to represent the insured. There are numerous insurance companies involved in this case. Mr. Alexander was retained by the CNA to represent the City of Great Falls. Kurt Drake was retained by Specialty National to represent the City of Great Falls. All three attorneys have been involved in the settlement and believed this was the appropriate course to take.

Commissioner Beecher moved, seconded by Commissioner Hinz, that City Commission approve and authorize execution of the Settlement Agreement - Release and Assignment of Parsons' claim.

Motion carried 5-0.
 

ADJOURNMENT