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Council Agrees To Settle Former Police Captain Lawsuits

New London councilors vote 5-1 to resolve suits by William Dittman and Michael Lacey

The City Council has agreed to settle two lawsuits filed by former police captains, while Mayor Daryl Finizio told the councilors in a letter that he made missteps in the reorganization of the command.

The council voted 5-1 to settle with William Dittman and Michael Lacey, who but filed suit after the council thrice needed to fund their settlements beyond their regular retirement benefits. Finizio also .

Finizio has since appointed as deputy chief and promoted lieutenants to fill the captains’ positions. Finizio said in a letter to the council that he felt strongly about reorganizing the department and wanted to ensure that the separation agreements would be amenable to Dittman and Lacey.

“As this was being done at the beginning of the year, and within 30 days of my swearing in as mayor and the change to a different form of government, there was a certain learning curve that the administration was in the middle of; and I should have done a more thorough job of reviewing the necessary steps and procedures needed in order to effectuate these separation agreements, including making sure that all Charter provisions were followed regarding the need for council approval of the ‘extra monies’ included in the agreements, as these ‘extra monies’ and some of the contractually required retirement benefits were outside of the fiscal year 2012 budget,” said Finizio. “I accept responsibility for these errors in the process, the costs that have occurred as a result thereof, and the fact that the captains have commenced litigation against the city in order to enforce the agreements.”

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Finizio encouraged the council to accept the settlement option, which amounts to honoring the agreements and paying nominal attorneys’ fees. He said the city’s insurer, CIRMA, was in favor of settling and informed him that it would rescind insurance coverage in Dittman’s suit if the case went to trial. He said he expected similar circumstances in Lacey’s case and that CIRMA’s attorneys informed him that the costs for the defense could exceed $1 million.

Councilor Adam Sprecace, who previously opposed the settlements, said he would support them in light of the new information. He said he felt settling would be cheaper than a trial and that it could be funded through the 2013 fiscal year budget rather than the 2012 budget, which ran a deficit.

“Circumstances have changed since the last time they came before us,” he said.

Councilor John Maynard opposed the settlements, saying he was unwilling to support them unless the New London Police Union makes the concession that it will not seek similar benefits for any retirees.

Finizio recommendations

In his letter, Finizio also said he is currently preparing an ordinance for the council to consider regarding how separation agreements are prepared. He said he would also support council efforts to revise the city’s retirement benefit process.

Finzio’s recommendations included:

  • Reducing the amount of compensatory time employees may carry over to a new year
  • Eliminating mayoral discretion in determining compensatory time limits for the police and fire chiefs when they leave city employment
  • Prohibiting the inclusion of health benefits in the separation agreements of any departing city employee
  • Reducing the amount of “opt out” health insurance payments provided by the city
  • Prohibiting the transfer of city employees from a defined contribution retirement package to a defined benefit retirement package unless approved by the council
  • Restricting the use of salary adjustments in the use of benefit calculations for departing city employees unless approved by the council
  • Reducing the additional benefit for retirees with accumulated sick days
  • Including a paragraph in all separation agreements saying the agreement does not become valid until approved by the council

Details of the lawsuits

charges breach of contract, breach of the covenant of good faith and fair dealings, negligent misrepresentation, liability of the city, fraud, civil conspiracy, and unjust enrichment. It names Ackley, Finizio, former personnel coordinator Bernadette Welch, and the city of New London.

Dittman said his relationship with Ackley was “acrimonious” and that Ackley and Finizio pressured him to retire. Dittman said he agreed to do so based on assurances from them, as well as Welch, that the city would meet its obligations. He said the city paid him $106,495.87 for accrued vacation, holiday, and compensatory time in January, but informed him in February that it would not be able to fulfill the rest of the agreement.

Aside from the vacation, holiday, and compensatory time, Dittman’s settlement would have had the city cover his family health insurance at no cost until he reached the age of 65. He also would have been able to continue on a municipal health insurance plan along with any dependents until ineligible due to age or Medicare coverage. Law Director Jeff Londregan said the settlement represented an extra $36,571.31 over regular retirement benefits due to Dittman.

charges breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, violation of Connecticut wage laws, and negligent infliction of emotional distress. It also charges libel and breach of contract. Each suit names Ackley, Finizio, Welch, and the city.

Lacey said he planned to work an additional 15 years to enhance his pension benefits, but agreed to retire based on assurances that funding would be available. His agreement would pay for all accrued vacation, holiday, sick, and compensatory time. It also offered family health insurance through 2017, at which point he and his wife would be included on the city’s supplemental Medicare coverage until Lacey became eligible for Medicare. Lacey also said payments ceased in February, and Londregan said the agreement represented $198,069.69 beyond regular retirement benefits.

The libel charge relates to the release of documents related to the at the Shrine nightclub at Foxwoods Resort Casino. Lacey said Ackley launched an unauthorized investigation into alleged inappropriate behavior by former city councilor Michael Buscetto III and accused him of being unwilling to act on officer complaints about Buscetto. Lacey said he was not directed to investigate Buscetto and that the city never issued a clarification or retraction after the matter was reported in the media.

The council formerly turned down a settlement agreement which would have paid a year’s salary and COBRA benefits to Segar, along with accrued vacation, holiday, and compensatory time. Segar would also have become eligible for the unaffiliated employees retirement health savings plan, forgiven a $1,374 payroll conversion loan debt, and issued him a retiree identification card and federal permit to carry a firearm. Londregan said this represented an additional cost of $15,000 above normal benefits.

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