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South Lake Tahoe reports $2 million settlement in 2021 police pursuit lawsuit
Summary
City staff reported settlement of William Arajo et al. v. City of South Lake Tahoe (El Dorado County Superior Court case 22CV0761) for $2 million, covered by the city's insurance risk pool.
City staff reported in closed session that the lawsuit arising from a 2021 police pursuit (William Arajo et al. v. City of South Lake Tahoe, El Dorado County Superior Court case 22CV0761) has been settled. The settlement agreement was fully executed July 30, 2025.
A staff report said the parties agreed to dismissal with prejudice in exchange for a total payment of $2 million (approximately $1 million per plaintiff). The staff report noted the amount will be covered by the city’s risk pool insurance through Sierra.
No further details were announced at the meeting; staff said defendants and additional particulars will be disclosed publicly once the litigation is formally commenced or as appropriate under reporting rules.
