Ex-Manager Lawsuit Settlement On Council Agenda Tuesday

UPDATE

The Village Council approved the $325,000 settlement at Tuesday night’s meeting, voting 5-2. Council Members Katie Petros and Luis Lauredo voted against the settlement. Petros said Gilbert was not entitled to any additional payments. Council Member Ed London said while he agreed that Gilbert’s lawsuit didn’t have merit, there was legal risk in proceeding given the limits of the Village’s insurance policy.  

Gilbert reacted to the settlement from his new home in Lake Tahoe, Calif. “It’s behind me, it’s behind the Village. I’m sorry it got to this point, and we’re all moving forward.” 

A $325,000 settlement of a lawsuit filed by former Key Biscayne Village Manager John C. Gilbert  is on the Village Council agenda for approval Tuesday, capping months of litigation that has cost at least $35,000.  Village Attorney Chad Friedman said both the settlement and the cost of litigation will be paid by insurance.

Gilbert, who retired as manager last year, sued to recover deferred retirement benefits in the Village’s pension plan, earned during his 18 years as Key Biscayne’s deputy fire chief and fire chief.  In court papers, he said he was owed $739,182 from the plan.

In earlier statements denying payment, the Village and the Pension Board took the position that Gilbert had waived a portion of his benefits in his employment contract as manager. Gilbert’s complaint argued the opposite, saying the contract stated that, “Employee is entitled to retirement benefits accrued under the plan by virtue of his prior Village employment.”

One aspect that likely influenced the proposed settlement of the lawsuit is the Village’s employment liability coverage, provided by Preferred Governmental Insurance Trust. The insurance carrier notified the Village in November  2018 that while it would defend against Gilbert’s lawsuit, it reserved its right to deny coverage for some costs if Gilbert were to prevail.

“Please be advised that the allegations of the Complaint do appear to implicate certain exclusions or limitations relating to coverage contained in the applicable Coverage Agreements, and Preferred hereby takes this opportunity to place the Village, the Pension Board, and the Plan on notice,” wrote Christine Barnett, a claims representative.

Friedman said the Village’s legal bills for the matter were about $35,000. He did not have a figure for legal spending on behalf of the Pension Board, which retained a separate lawyer. It’s not clear if the Village has to pay a deductible.