Settlements offered: City seeks to end lawsuit with former attorney, manager

The city is offering to settle with two former employees who filed a complaint against it and two council members.

At its Tuesday, June 22, meeting, City Council unanimously approved monetary offers for former City Attorney Steve Morris and former City Manager Al Noyola in their case accusing the city, Mayor Kiernan McManus and Councilwoman Tracy Folda of violating the open meeting law and breaching a covenant of good faith and fair dealing when they were fired in October.

The offer for Morris is $270,000 inclusive of attorney fees, costs, expenses and interest. Noyola’s offer is for $290,000.

Under both settlements, the city would waive all rights to seek reimbursement of the $81,888.42 in attorney fees it was awarded May 8 by Nevada District Court Judge Jessica K. Peterson.

Additionally, these offers are considered compromise settlements and if Morris and Noyola accept them, all their claims and requested damages against the city will be dismissed and their appeals will be dismissed with prejudice.

Attorney Griffith Hayes, who helped draft the offers with the Bailey Kennedy law firm, said they were “unilateral monetary” offers with “specific terms and conditions” and if accepted, all the claims between the parties in the lawsuit would be resolved.

“Once the offers are served, the plaintiffs have 14 days to accept them,” he said. “If they do not accept them and then they end up obtaining a judgment that is less favorable than the dollar amount in the offers, there are certain penalties that apply through the statutes. One of the penalties is that the city can recover costs and expenses incurred after the offers were served.”

Morris and Noyola have not received any severance pay since they were fired.

Noyola’s payout would have been $234,613.97, and Morris’ payout would be $259,458.15. Both the amounts were outlined in their contracts.

The claims filed by Morris and Noyola stem from a complaint alleging that a special meeting scheduled for Aug. 6 to discuss firing them was because they substantiated allegations against McManus. They also said they did not receive proper notice of the Oct. 13 meeting to discuss their firing.

Folda was the only council member to comment on the offers during Tuesday’s meeting.

“Next month will be nearly a year since I added the item on the agenda to review the employment of the former city attorney and city manager,” she said. “Those individuals decided to take matters to the court on multiple occasions since that time. Statements have been made on social media and in the paper in defense of their actions, but at the end of the day the court has ruled in the city’s favor every time we have appeared to date.”

Folda said it was her opinion that Morris and Noyola “would only make things worse for themselves by continuing to drag this on.”

“The city is offering a very generous settlement and has acted in good faith to put the matter to rest,” she said. “The city has and will continue to defend itself.”

Morris’ attorney, Richard Gordon of Snell &Wilmer LLP, said the offers were a step in the right direction but didn’t take into account other damages his client suffered.

Jeffrey Barr, an attorney with Armstrong Teasdale LLP who is representing Noyola, is out of the office until today, June 24, and was unable to respond to a request for comment.

Peterson recently stayed all the claims in the district court case until the Nevada Supreme Court decides on the appeals. There is a hearing scheduled for July 13 to reconsider the amount of fees awarded to the city. It was requested by the city and originally scheduled for June 29.

Contact reporter Celia Shortt Goodyear at cgoodyear@bouldercityreview.com or at 702-586-9401. Follow her on Twitter @csgoodyear.