Insurer Reluctant to Pay $ 4.6 Million Verdict in Cherokee County Case

A federal jury awarded a father and daughter $ 4.6 million earlier this year after finding workers in Cherokee County and its Department of Social Services illegally separated them several years ago.

The legal battle over who is responsible for paying this money has already started, and it could be years before Brian hogan and his daughter see a dime of that money, if at all.

The county is insured by the NC County Liability Property Joint Risk Management Agency, but this organization says it is not obligated to pay the millions owed by Cherokee County and its employees because the officials were dishonest or broke the law, according to a file last month in the Wake County Superior Court.

The contract with Cherokee County covers “wrongdoing” at $ 2 million per act.

If the court determines that the agency is obligated to pay, according to the record, that should be limited to $ 4 million in the Hogan case – $ 2 million for each year that Hogan and his daughter have been illegally separated with a document called a custody and visitation agreement. .

CVAs said they granted custody of a child to someone else until the child was 18. Although they appeared to be a legal document, they did not have the force of law. Two district court judges ruled that these were invalid legal instruments.

“CVA is the product of both real and constructive fraud on behalf of the Cherokee County Social Services Department, its agents and employees Scott Lindsay and director Cindy palmer,” a decree of the judge said in 2018.

The NC County Commissioners Association risk management pool may anticipate additional lawsuits. The organization has two insurance products, one for workers’ compensation and another for limited liability and property insurance. Seventy-one of the state’s 100 counties are members of one or both pools.

Hogan’s lawyers have filed federal civil cases for three other families, and even more lawsuits are likely, as county social workers have adopted at least 30 CVAs since 2008, most of them starting in 2016 and 2017.

When asked to comment on the dispute, a spokesperson for the NCACC said it was a legally separate entity from the NC Counties Liability Property Joint Risk Management Agency. However, the NCACC created the risk management agency, according to the NCACC website.

David Wijewickrama, who represents the parents and children named in the insurance company’s lawsuit, said he expects to file a response within a week.

“My clients in their response will have a disagreement of opinion,” Wijewickrama said. “In light of (George) Floyd and other civic abuses by governments or government officials, municipalities are realizing that they have no defense but to be held accountable for the rogue acts of their employees. “

The insurer’s record also indicated that neither Lindsay’s nor Palmer’s actions are covered because they refused to cooperate with their defense in the civil lawsuit – a breach of contract. During pre-trial Hogan depositions, both argued their Fifth Amendment right against self-incrimination in response to more than 200 questions.

“Lindsay and Palmer’s assertion of their Fifth Amendment rights and their refusal to answer nearly all questions relating to the underlying lawsuits led the court to ask the jury that an adverse inference could be drawn against them in the Hogan lawsuit, “says the insurance company lawsuit. .

Palmer and Lindsay, as well as a former social work supervisor David Hugues, face three dozen felony and misdemeanor charges related to the custody and visitation agreements, following indictments by a Cherokee County grand jury last year.

Among the indictments is a perjury charge against Palmer, who said on February 28, 2018 that the first time she heard of a stroke was on December 6, 2017. She became director in 2016 and was in a meeting with social workers where CVAs were discussed, according to testimony in the May federal trial.

The Cherokee County contract does not cover “fraudulent, dishonest or criminal behavior by any covered person,” according to the NC Counties Liability Property joint risk management agency lawsuit.

Hogan’s case and that of his daughter were the first of what could be dozens of civil lawsuits in the months and years to come against the Cherokee County DSS practice of resolving “blocked cases” outside. of judicial authority.

Social workers testified at the Hogan trial that they did what they believed was in the best interests of the child and Palmer told her to follow the instructions of attorney, Lindsay, regarding the movement of the children. Lindsay told staff to use a form letter to orchestrate CVAs, according to previous court testimony from Lindsay and staff.

However, social workers have ignored the law and politics to the detriment of the rights of parents and children, said Melissa Jackson, a lawyer who represented Hogan.

“Cherokee County was not doing what was in the best interests of the children,” Jackson said in closing arguments at the federal civil trial in May. “They were doing what was in the best interest of them. A simple, inexpensive and faster way.

Overall, the jury found that Cherokee County had an official practice or custom that violated the rights of Hogan and his daughter, and that the county had not adequately trained employees on the rights of parents and their children.

The jury also found that Palmer and Lindsay violated the due process rights of Hogan and his daughter, that Palmer and Lindsay “acted grossly negligently” and caused injury to Hogan and his daughter, and that Lindsay had obstructed justice.

Hogan, who is illiterate, testified during the May trial that he did not understand what he was being asked to sign and that if someone had explained it to him, he would never have signed it.

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