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Board approves settlement on terminated Handy lease after split vote; counsel cites litigation uncertainty
Summary
The board voted to approve a settlement with Handy over a terminated lease; the settlement netted roughly $270,525 to the district after offsets, but several board members opposed settling and said the district should have litigated.
The board approved a settlement resolving a dispute with Handy over a terminated lease, after a contentious discussion in which multiple members questioned the decision to settle rather than litigate.
General counsel described the settlement amounts and offsets: Handy holds a security deposit of $85,000 and the net settlement to be paid to Handy would total approximately $270,525 under the proposed agreement. Counsel said the board had instructed legal staff to negotiate a settlement and noted the uncertainty inherent in litigation.
Board member Mr. Rivera and others said they opposed the settlement and believed the district had a defensible case; they warned that settling could create a perception the district will concede when sued. "This is an asinine amount of money to pay for this," Mr. Rivera said, urging staff to defend the district in court rather than pay the settlement. Supporters of settlement argued that continuing litigation would add attorney fees and could ultimately cost more.
After discussion, the board approved the settlement with two dissenting votes.
What happens next: If the board had rejected the settlement, staff said the district would be served and would enter formal litigation; because the board approved the settlement, staff will proceed with the terms outlined in the agreement and apply offsets described by counsel.
