Paradise Valley records reveal 1 out-of-court settlement over the last 4 years

Paradise Valley Municipal Court is at 6517 E. Lincoln Dr. (File photo)

While some municipalities are paying out more than $1 million annually in out-of-court settlements, the Town of Paradise Valley has only had one claim in four years.

A recent records request shows that Paradise Valley had one settlement between 2015-18 for a bicycle accident claim. It was settled in November 2015 for $75,000.

For comparison, neighboring city, Scottsdale’s out of court settlements ranged from five settlements equaling $997,000 in 2015 to seven settlements equaling $350,499.99 in 2018. In 2016 the city settled 12 claims out of court.

Paradise Valley Councilwoman Julie Pace says there are major differences between Paradise Valley and other larger Valley municipalities such as Scottsdale, Phoenix, Mesa or Tempe.

“They have large budgets, they have hundreds of thousands of people living there — things happen — their legal departments are much larger,” Ms. Pace explained. “They have to weigh the pros and cons, resolving out of court settlements versus defending them. We have a small community, approximately 6,000 homes with less than 13,000 people so we do not have as many claims or issues.”

Julie Pace

Ms. Pace also noted Paradise Valley’s “small but mighty” legal department headed by Town Attorney Andrew Miller.

“I think it’s a good sign that we only have had one in four years, I think that shows good stewardship,” Ms. Pace said. “It also means that we have a legal department that doesn’t roll over and pay out claims. They don’t want to start a trend in that, they probably try to defend against it or resolve it.”

Councilman Paul Dembow points out that while Paradise Valley had one settlement, it isn’t that far off from other cities when looking at an even playing field.

“If you look at it on a per capita number, we pay out about the same amount as Scottsdale does, it sounds like we’re in line with what they’re doing,” Mr. Dembow explained.

He pointed out that every case is different, and settling out of court might be the best option for the municipality when looking at all the factors.

Paul Dembow

“A lot of times we’re covered by the insurance company. The insurance company requires you to support them if they’re going to pay out or not pay out; you can’t just say ‘we’re not going to pay out.’ If you turn it over to risk pool, they might say we’re going to settle this one for this amount, given all the information it’s going to be less costly,” Mr. Dembow said.

“Certain cases are so bad, you get a claim, and I’m looking at it saying ‘that’s crazy’ but they’re asking for such a small dollar amount. Do you pay it because it will be more to fight it? That might be the best return on investment.”

The risk pool only covers certain areas, Mr. Dembow says, and so it’s not like the town is able to pick what is settled or paid, and what’s not.

“We try to get them to pick up everything — sometimes they say no, sometimes it’s a negotiated kind of maybe,” he said.

Pointing out the single settlement in recent years, Mr. Dembow says it could easily have been a much higher number.

“If it was zero that would be great, the number could have been a far higher number,” he said. “Each individual claim stands on its own two feet or not. I’ve seen a lot of claims, sometimes I wonder where people get the idea to make such a big claim or claim at all based on what the facts are.”

Town Attorney Andrew Miller says there are many factors that come into play when determining whether to settle a suit versus taking the matter to trial.

Paradise Valley Town Attorney Andrew Miller

“Those factors include an assessment of the likelihood of the Town being found at fault in any way for the damages claimed, the defenses to the claims being made, the amount of potential damages that might be awarded by the judge or jury compared to the settlement offered, and, quite often, what will be the cost to defend the suit as compared to the settlement offered,” Mr. Miller explained. “Generally, the Town does not comment on pending cases.”

In addition, most often the payment for these settled cases comes from the Town’s liability insurer, as historically, most of the claims filed relate to activities covered under the Town’s insurance policies, he says.

“If there is no insurance policy coverage for a particular claim, such payments would come out of the Town’s general fund,” Mr. Miller said.

News Editor Melissa Rosequist can be reached by e-mail at mrosequist@newszap.com or follow her on Twitter at www.twitter.com/Mrosequist_

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