SeaTac City Council approves $13 million legal settlement with K & S


By Jack Mayne

A last minute settlement that will cost SeaTac taxpayers $4 million and insurance carriers about $18 million was approved on a 5 to 2 vote at the SeaTac City Council meeting Tuesday night (Oct. 10).

The actual proposed total settlement was $13 million offered for the city to settle, against upwards of $22 milion or even higher with continued negotiations and relying on a favorable court appeal.

Councilmember Tony Anderson and Councilmember Kathryn Campbell opposed the settlement. Anderson was the only member of the current SeaTac City Council who was on the Council when the actions were taken by the city and Gerry Kingen. Anderson said the case is on appeal because of the high award to Kingen, and the city has a competent legal team for the appeal. He is retiring this year after serving 10 years on the Council.

$4 million or $22 million?

Councilmember Rick Forschler said the problem is that it is $4 million if the city settles now, or $22 million if the city loses the appeal. “Four (million dollars) makes it go away, but $22 is a scary number,” he said.

Mayor Michael Siefkes said he thinks it is fair to say that “nobody up here wants to pay this money, that’s a lot of money” for actions that took place before six of the seven members “ever got on the Council.” He said if the city goes to appeal and loses, the city would have $22 million to pay and Kingen has other cases that could raise the amount much higher.

Additionally, Siefkes said the insurance company may not continue their committment for pay roughly two-thirds of the total $13 million bill. He suggested they decided to pay two-thirds of the bill based on their concerns about the future possibilities of increasing totals.

After a long time for executive sessions, the Council discussed potential settlement of K&S lawsuits that have plagued the city for many years. The settlement is for $13 million or $9 million less than the state court judgement which, with costs and interest, has grown from $18.3 million to “just shy of $22 milliion,” SeaTac City Manager Joe Scorcio said.

Scorcio and assistant city attorney Cindy Corsilles briefed the Council on the first of the Kingen’s lawsuits filed in 2012 regarding the acquisition of property he owned and wanted to develop as a park and fly facility which later was to include some commercial spaces. The property is at 154th and International Boulevard.

Trial in 2016
The matter went to a jury trial in King County Superior Court in January of 2016 and entrepreneur Gerry Kingen was awarded $9 million plus other damages and attorney fees, the total of which amounted to about $18 million. The city appealed the case and was slated to have oral arguments at the state court of appeals on Nov. 6.

Scorcio noted that earlier this year, K & S filed a similiar suit in federal Court adding civil rights violations to its previous state court allegations.

The city’s lawyers, staff and hired from outside, have mediated the agreement with Kingen’s lawyers and “weighed both the advantages and disadvantages of contiunued litigation” and then K & S came in with a settlement offer and both sides have agreed on the $13 million amount, Scorcio told Councilmembers.

Of the total, the city would pay $4.25 million from city funds, with the balance to be paid by the city’s insurance carriers, he said. Kingen and his lawyers say all “small and large” issues and pending lawsuits filed on his behalf will be dropped if the SeaTac Council agrees to the $13 million judgement.

Scorcio said the agreement before the Council would also settle all of the city’s pending arguments over insurance coverage.

He said the money is available in the city’s current budget reserves to allow for the payment which the Council eventually voted 5 to 2 to approve.

No ‘fiscal difficulty’
“This in no way puts the city at any kind of fiscal difficulty,” Scorcio said. “At this point in time, we have adequate reserves to cover this. I want to assure you of that,” adding that some moving around inside the budget may be necessary to keep strategic reserves available for any future needs.”

He noted there is a provision in the agreement that neither side can make public comment on the settlement for a period of six months.

“After the six months, there is still some prohibitions about initiating public comment on that, but you’re in the position to respond to public inquiries,” he said.

Councilmember Peter Kwon wondered why the urgency to get all of the changes done in a single last minute push to the Council and Scorcio said there is a push for the lawyers, insurance carriers and the city to get “all the pieces together” to get the matter resolved.

In addition, he said K & S is “requesting a prompt payment” and “once you reach an agreement you act quickly,” adding there is also the state court of appeals scheduled for Nov. 6 for its review of the Kingen case.

Siefkes said it has been years since any member of the Council has been able to comment on the issue.

He also noted that insurance companies are putting up about a third of the settlement and his experience is that insurance professionals are loathe to put up any money at all until they must. The fact that each of the companies is willing to put up $4 million indicates how they consider the future options for more court activity could amount to.

But if the city waits and the other cases go forward, the city could end up paying the full judgement and whatever increase came over time with the settlement bringing the tab to “well less than 20 percent” of the potential total.

Assistant city attorney Cindy Corsilles agreed and that it could be muchssistant city attorney Cindy Corsilles more than the potential settlement.

The mayor, an attorney in private life, said he was for the settlement because it would potentially save money over a later time.

Deputy Mayor Pam Fernald said she was for the settlement because “this has been hanging over our heads for a long time. Let’s put this behind us” and “never let anything like this happen again.”

At comment period at the outset of the regular meeting later, resident Vicki Lockwood said was she was “really, really disappointed about, is all of the talk is coming from a position of guilt and not once has anyone said, ‘Maybe we were right.'”

Gerry Kingen, Lockwood said, “has been bluffing people his entire life and people have caved and he’s won and that is why he’s the bad actor he is today,” adding she would like to see the Council act as “though we are not the bad actors. Perhaps it was him who was the bad actor.”

“I believe we are coming from a place of strength and not guilt.”

SeaTac resident and SeaTac Blog columnist Earl Gipson said he would “trust your wisdom in how you do it.”

Red Light Cameras
The Council rejected 4 to 3 the city renewing red light cameras when the current contract expires at the end of this year.

Since 2006, SeaTac has contracted with Redflex to provide automated traffic enforcement services, specifically photo-enforced red-light cameras. Despite concerns about the sketchy history of Redflex, the contract was extended to the end of the year to permit time to interview other companies, and three other qualified organizations were found and city staff recommended American Traffic Solutions.

Councilmember Rick Forschler said his research said they value of the cameras in reducing accidents was “inconclusive.” He repeated a suggestion he made during previous discussions on the camera and recommended dropping the cameras for a period of time to see whether the difference would show whether they should be used or not.

In addition, the cameras annoy people who come from somewhere else because of the airport and they also drive them to some other nearby city for lodging, it could “potentially be affecting our economic development.”

Forschler said he would rather that SeaTac Police apply their actions more to crime and drugs rather than traffic problems that could drive people away to other cities.

Police Chief Lisa Mulligan said the SeaTac Police do not have the manpower to work the busy intersection where the cameras are located. She has said at earlier meetings that the cameras do mean that her officers do not have to monitor these intersections and can be elsewhere “to actually fight crime in our community … a great benefit.”

Councilmember Erin Sitterley said she was against the cameras and not continuing them after the expiration at the end of the year. That way the city could gather its own data on the value of the cameras.

Deputy Mayor Pam Fernald said she believed the cameras were an effective way to discourage running the lights and endangering others in the city.

The Mayor cited The SeaTac Blog and a SeaTac NextDoor polls that had significant voter pluralities against the cameras and noted the companies were not local but from “far away.” He also noted that both Burien and Auburn have done away with the cameras, nothing that once Auburn had many cameras around town before taking them all down and seeing no real difference in traffic problems.”

Siefkes said the cameras were nothing but a visitor’s tax since most tickets apparently go to out of towners.

“I’m against that,” he said, adding that if the city does sign a contract next year with the new vendor, it would cost $360,000 to get out of the five year agreement. It’s wrong for the city to have such a cost if it should change its mind.

Councilmember Peter Kwon said information online about the cameras is either marketing oriented or just people not liking the cameras. The pros or cons were based on either whether they produce revenue and whether public safety is enhanced. He said he could not find any city that operated cameras at a loss to improve public safety.

“It is all about the money, that is very clear,” Kwon said.


Comments

3 Responses to “SeaTac City Council approves $13 million legal settlement with K & S”
  1. This kind of decision should NEVER happen again. This is a huge obligation for us property tax payers….many of us are on fixed incomes as Senior Citizens.

    Hot debate. What do you think? Thumb up 10 Thumb down 2

  2. Joel Wachtel says:

    I commend the council on its wise decision to bring a swift end to a K&S situation that actually started almost a decade ago. The price, though high, was a bargain in the realm of possibilities. The total termination of the ever-increasing number of legal battles the city was fighting is the best of all endings to this nightmare. But there are still questions we must answer and actions the city must take to protect the tax paying citizens.

    An internal inquiry into the actions of all employees involved at any level in this matter must be undertaken to understand how the decisions which led up to this could be viewed by the courts as being improper. It is clear that these actions did not occur in a vacuum and it seems everyone involved denied anything was done wrong. That implies the system is missing an important set of checks and balances. The finances of citizens and businesses must be protected, at all costs, from incorrect behavior because of incompetence or misdeed! The city must do better to protect our residents.

    I advocate an anonymous system be established to report improper or inappropriate behavior by any member of the city government. For a system like this to work anonymity must be guaranteed. But to not be aware of such issues is even more dangerous.

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  3. Earl Gipson says:

    Glad the lawsuit is over. The Seattle Times also watched our Study Session and RCM on Tuesday. Here is how they saw it from our meeting/s.

    https://www.seattletimes.com/seattle-news/west-seattle-couple-cheated-in-secret-seatac-land-grab-to-receive-13m-settlement/

    Historical- from the Times:

    https://www.seattletimes.com/seattle-news/seatac-ordered-to-pay-18-million-to-couple-it-cheated-in-secret-land-grab/

    The Cactus view of the trial (02/2016).

    http://seatacblog.com/2016/02/01/the-cactus-speaks-a-trial-a-train-and-a-hero/

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