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Thursday, May 5, 2016

Council still eyes lawsuit

Friday, April 14, 2006

Believing the town is still facing pending litigation, Cloverdale Town Council member Judy Whitaker urged the board to revisit a possible lawsuit at the board's Tuesday meeting.

Whitaker asked the board to set up an executive session on April 19 to look at a lawsuit stemming from Simon Fire Equipment and Repair, Dubuque, Iowa.

The original lawsuit, filed in Iowa, was dismissed from an Iowa court, but at Tuesday's meeting, Whitaker told the remaining four council members the town should evaluate the lawsuit further after receiving a fax from Simon Fire President James J. Simon.

The fax stated that as of March 13, the company had not sold a fire truck to Cloverdale, which was under a contract of acceptance via letter dated July 5, 2005.

The fax continued stating the company had no intention of letting the breach of contract go away and that Simon Fire intended to contact the "powers that be in the state of Indiana" of the possibility of perjury charges of "some individuals" regarding the issue.

At Tuesday's meeting, Whitaker said the council had received letters like this in the past from Simon Fire and that the board should take this one seriously.

"(Simon Fire) has done this before," Whitaker said. "You're putting this town in a financial crunch."

However, her motion of setting up an executive session was voted down by a 3-2 vote, with President Don Sublett, Vice President Dennis Padgett and member Glen Vickroy voting no. Whitaker and John Davis both voted yes.

At Tuesday's meeting, both Padgett and Sublett said Whitaker was dealing with a threat rather than an actual issue.

"If the suit comes, we'll address it," Padgett said.

"She's trying to forecast a lawsuit," Sublett added.

But Whitaker insisted the town take the fax seriously.

"You've put us in a hole financially," she said.

"You're dealing with a threat," Sublett said.

"Exactly," Whitaker added.

Town attorney Scott Hoff was unable to attend Tuesday's meeting, but he told the BannerGraphic on Wednesday that Simon Fire could file suit in Indiana.

"When you practice law, you see a lot of letters," Hoff said. "I wasn't surprised when I saw it."

Hoff said he would not speculate as to the future intentions of Simon Fire.

In a court ruling filed on Jan. 20, the Iowa court agreed with Cloverdale that it did not have personal jurisdiction over the town, and that the town's contacts with Iowa were minimal.

The court ruled that the case should be tried in Indiana, as most of the parties involved and key documents were in Indiana.

The ruling could be appealed in Iowa, or refiled in Indiana.

The lawsuit was brought upon the town by Simon Fire for breach of contract. It was originally filed on Oct. 27, 2005, and Simon Fire was seeking judgment against the town for damages stemming from a town council vote in April 2005.

Iowa attorney Paul Sigwarth represented Cloverdale in the case, and Whitaker told council members Tuesday that the town still owed more than $7,000 to the attorney.

The lawsuit stated that on or about April 2005, the town began a bidding process to purchase one fire truck from Simon Fire. The resolution was signed by all five council members on April 12, 2005. Four of the members voted to buy a fire truck. Sublett was absent from the meeting.

On June 8, 2005, the town council had a special meeting and, according to the lawsuit, accepted the bid for Simon to furnish a 2001 demo fire truck, estimated at $229,990.63.

At the June 8, 2005, meeting, Whitaker motioned to accept the bid of Simon for the demo truck, subject to favorable financing, with Sublett giving the second. The motion passed, 3-1-1, with Whitaker, Sublett and then council President John Davis voting yes. Padgett voted no while Vickroy abstained.

Written confirmation of the bid was sent by Davis on July 5, accepting the bid of Simon Fire and the price for the vehicle, subject to favorable financing.

The town was informed by its financial advisor at the time, Krohn and Associates, that there was favorable financing at the time, setting up a public meeting on July 19, 2005, to vote on a bond issue for financing.

However, financing of the bond issue for the fire truck was voted down, 3-2, with Padgett, Sublett and Vickroy voting no at the special session. Davis and Whitaker both voted yes.

In November 2005, Sublett, Padgett and Vickroy filed a response to the lawsuit, asking they be dismissed from the lawsuit.

The trio's response stated that Simon Fire brought a lawsuit against the town, rather than against individual members of the town council.

According to the response, Davis and Whitaker made decisions and acted independently of the town council and that they had received a letter written by Davis to Simon Fire representative Dale Bush, stating the town of Cloverdale had accepted its bid.

The response from the three council members also said the they were not "comfortable," with the letter, and the letter was sent without their knowledge or approval. It said they had asked that the certified check in the amount of $25,000 be returned more than once.

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