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Peekskill council authorizes $2.5M settlement in Douglas lawsuit; city net payment $1.8M
Summary
The Common Council approved settlement terms in Douglas v. City of Peekskill, agreeing to pay $2.5 million in exchange for a full release; insurer Harco will contribute $700,000, leaving the city's net payment at $1.8 million to be financed by a bond resolution. The mayor abstained from the vote.
The Peekskill Common Council on Feb. 23 authorized a settlement to resolve Douglas v. City of Peekskill, 21 Civ. 10644 (KMK), approving payment of $2,500,000 to resolve all claims and related litigation. Harco National Insurance Company has agreed to contribute $700,000 under the settlement, making the city's net payment $1,800,000. The settlement funds are to be provided through a bond resolution to be adopted by the council.
Councilman Brian Fassett read the settlement resolution in full before the council voted. The resolution states that the city "has denied and continues to deny any liability or wrongdoing," and that the settlement is being made to avoid the expense and uncertainty of further litigation. The settlement and related third‑party coverage action were placed on the record before U.S. Magistrate Judge Victoria Reznik after a settlement conference on Feb. 18, 2026.
The council authorized the City Attorney and City Manager to execute the settlement agreement and take all actions necessary to implement it. Roll call on Resolution J-18 showed six council members voting in favor and Mayor Vivian McKenzie abstaining.
The resolution also notes that the city filed a coverage action against Harco after Harco declined to provide coverage; both sides filed summary judgment motions in the coverage action. The settlement resolves both Douglas and the related coverage litigation, according to the resolution text. Council members said the funds to pay the settlement will be provided through a bond resolution that the council will adopt as part of the financing plan.
No admissions of liability were included in the council motion; the resolution explicitly says the city denies liability and agreed to settle to avoid trial costs and uncertainty.
