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Home My WebLink About9F - Hagen Settlement CITY COUNCIL AGENDA REPORT MEETING DATE: February 27,2001 AGENDA #: 9F PREPARED BY: Frank Boyles, City Manager AGENDA ITEM: CONSIDER APPROVAL OF SETTLEMENT AGREEMENT AND AUTHORIZE EXECUTION OF SAME IN THE MATTER OF JULIE HAGEN VS. CITY OF PRIOR LAKE DISCUSSION: History: Ms. Hagen worked for the City in 1997. She was terminated during her probationary period because of job performance issues. Ms. Hagen brought an Equal Opportunity Claim against the City, which was later discharged by the Equal Employment Opportunity Commission. She then brought action in district court alleging sexual harassment. Current Circumstances: The City's legal representatives conducted discovery on this claim. Based upon their findings, the insurance company recommended that the City explore a settlement to this claim. Ms. Hagen initially demanded $90,000 to settle the claim. Conclusion: After completing their analysis, the insurance company regards this claim as a nuisance, which they want resolved. Accordingly they advised the City that they intend to settle for $20,000. The City is free to litigate the case but if the damages are greater than $20,000 the City will be responsible for any additional costs. Attached is a copy of the settlement agreement which has been executed by Ms. Hagen and her attorneys. While I appreciate that the Council would prefer to pursue the merits of the claim, I believe that it is most prudent to approve the settlement agreement. ISSUES: The $20,000 settlement is borne by the City's insurance company. The impact of this claim could affect city insurance premiums. The settlement course of action is the most prudent considering potential statutory exposure. ALTERNATIVES: (1) Motion and second to approve the settlement agreement and authorize its execution. (2) Motion and second to pursue litigation recognizing that the City is liable for any costs exceeding $20,000. RECOMMENDED MOTION: Alternative (1). 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 L:\FORMAT.DOC AN EQUAL OPPORTUNITY EMPLOYER T" T 1 1 1 '"TIT SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release (the "Agreement") is made and entered into by and between Julie Hagen (hereafter "Hagen") and the City of Prior Lake (hereafter "the City"). WHEREAS, Hagen was employed by the City from February 17, 1997 to August 15, 1997; and \-VHE.HEAS, Hagen initiated a lawseit against the City, captioned as Julie Hallen v. Citvof Prior Lake, Scott County District Court, First Judicial District, alleging various causes of action against the City related to her employment and the termination of her employment; and WHEREAS, the City has denied the legitimacy and validity of all claims made by Hagen in this action; and WHEREAS, in the interest and compromise of the claims, charges and causes of action alleged by Hagen, in order to avoid the costs and expenses of trial, and without any admission relating to liability or to damages, it is the mutual desire of Hagen and the City to settle amicably any and all claims, charges and causes of action that have been raised or that could have been raised by Hagen in regard to her employment or her termination of employment with the City. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, THE PARTIES MUTUALLY AGREE: 1. Payments. In full and complete settlement of all claims, counterclaims, charges and causes of action alleged by Hagen, including any claims for attorney fees or costs, without any admission as to liability or damages, and in consideration of the other agreements contained herein, Page I of 4 the City agrees to pay the settlement sum of Twenty Thousand and NO/lOO Dollars ($20,000.00), to be distributed as follows: (a) Julie Hagen $10,946.40 (b) Reinhardt & Anderson $ 9,053.60 The City will issue a 1099 to Reinhardt & Anderson for $9,053.60. Reinhardt & Anderson's tax identification number is 41-1389201. The settlement with Hagen is intended as compensation for alleged personal injuries and emotional distress damages. The City will issue a 1099 to Hagen for $10,946.50. Hagen's Social Security Number is 475-84-6216. 2. Non-Admission of Liability. The parties neither intend nor deem anything in this Agreement to be an admission of liability by the City that it violated any law or otherwise engaged in any wrongful conduct, and the City specifically denies that it has engaged in any illegal or wrongful conduct. 3. Release. In consideration for the payment by the City as set forth in Paragraph 1 above, the satisfaction of which is hereby acknowledged, Hagen, for herself, her heirs, executors and assigns, does hereby release and forever discharge the City, its officers, agents, employees, and any and all of its divisions, insurers, indemnitors, predecessors, successors, and assigns, and each and every one thereof, from any and all actions, suits, proceedings, claims, complaints, charges, judgments, and executions, whether liquidated or unliquidated, known or unknown, suspected or unsuspected, Hagen has ever had or presently has arising out of her employment or her termination of employment with the City. Page 2 of 4 I TI r II III 4. Dismissal. Upon execution of this Agreement, Hagen hereby specifically agrees to dismiss with prejudice and without award of fees or costs the lawsuit captioned Julie Hagen v. City of Prior Lake, Scott County District Court, First Judicial District, and to execute all papers required to complete said dismissal. 5. Notice of Right to Rescission. By executing this Agreement, Hagen also releases the City from any claims she may have under the Age Discrimination in Employment Act and any claims she may have under the Ivfinnesota Human Rights Act. Hagen acknowledges having been advised that she may have twenty-one (21) calendar days from the date she receives this Agreement to consider it. Hagen understands that she may rescind this Agreement within seven (7) calendar days of the date of execution ofthe Agreement to make or reinstate claims under the Age Discrimination in Employment Act, and within fifteen (15) calendar days of the date of execution of this Agreement to make or reinstate claims under the Minnesota Human Rights Act. If Hagen chooses to rescind, she agrees to do so according to the following procedures: a. Hagen will notify the City in writing by delivering or mailing a Notice of Rescission to Frank Boyles, City Manager, City of Prior Lake, 16200 Eagle Creek Avenue S.E., Prior Lake, Minnesota, S5372-1787; b. If Hagen sends the Notice by mail, she understands that it must be: (1) Postmarked within the IS-day period; (2) Properly addressed to the City Manager for the City of Prior Lake; and (3) Sent by certified mail/return receipt requested. 6. This Agreement contains and sets forth all of the terms agreed upon by the parties and Hagen's acceptance of the consideration herein is a full, final and complete compromise in Page 3 of 4 settlement of this dispute, and there are no covenants, promises, undertakings or understandings outside this Agreement regarding a settlement of this matter. Dated: FebulVW[ /3 , 2001 Dated: ~;5 ,2001 Dated: ~~~ 2001 Dated: I,I ,2001 REINHARDT & ANDERSON By: 15MhIWA /, 1wr-- Jeffrey R. Ander~n (#2057) Barbara 1. Felt (#228564) Attorneys for Plaintiff Julie Hagen E-1000 First Nmional Bank Building 332 Minnesota Street St. Paul, Minnesota 55101 Telephone: (65 227-9990 JULIE FLEMING-WOLFE Attorney at Law By: Julie Fleming-Wolfe (#175377) Attorney for Defendant City of Prior Lake 1010 Degree ofHon0.:" Building 325 Cedar Street St. Paul, Minnesota 55101 Telephone: (651) 767-8642 CITY OF PRIOR LAKE By: Its: Page 4 of 4 II III