Denver's outlay for legal cases dropping

But Lobato lawsuit may cost city millions

April M. Washington, Rocky Mountain News

Published September 23, 2005 at midnight

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The city of Denver has paid $651,000 so far this year to settle lawsuits and claims - a far cry from the $3.9 million it paid out last year.

"I think we have a good story to tell," said Deputy City Attorney Michelle Lucero. "Our claims are down and our outside legal fees are pretty low compared to what we have spent in previous years."

But that could change with one big case - a settlement for the police shooting death of Frank Lobato.The 63-year-old invalid was killed July 12, 2004, as he lay in bed after a Denver cop said he mistook a soda can in his hand for a gun.

Lobato's family filed a lawsuit this summer that accuses the city of "failing to properly hire, train and supervise" the officers on the scene when Lobato was shot during a no-knock raid at his home. The family is seeking $10 million from the city and police.

"The case is pending in court," Lucero said, "but we plan on strongly defending the city's interest."

Despite the drop in payouts this year, City Councilwoman Jeanne Faatz and City Auditor Dennis Gallagher continue to call for greater oversight surrounding settlements.

"I think whenever taxpayer money is used to settle legal cases, we ought to be aware of what is happening and make sure everything comes before us," Faatz said.

"If anything, the watchful eyes of council will keep the downward pressure on to settle legal disputes for as little as possible," she added.

Most payouts involve cops

Denver has spent roughly $18 million to settle pending or threatened lawsuits in the past five years, city records show.

The city shelled out most of that money - about $14.4 million - to settle legal disputes between 2000 and 2002.

The bulk of payouts since 2000 came in cases involving the police, but virtually every city department has been hit.

The city has spent tens of thousands to settle claims involving auto accidents, slip and falls, excessive force, use of force, police pursuits, false arrest and employee disputes.

The city earmarked $2 million in 2005 to cover settlement and claim expenses, about $1 million less than the amount budgeted in the previous year.

Leftover money rolls into the following year's budget to cover fees needed to defend pending lawsuits, city officials said.

Some of the top payouts in recent years:

• $3.5 million to the mother of a college student killed in a crash with a squad car.

• $2.4 million to three police officers forced to retire because of injuries.

• $1.2 million to a boy paralyzed after he was shot by a police officer as he fled a home he had broken into.

• $1.5 million to settle a Department of Justice employment claim.

Mayor John Hickenlooper's administration took steps two years ago to clamp down on legal costs after several City Council members criticized the amount spent to settle a handful of high-profile lawsuits, calling the trend alarming.

In response, City Attorney Cole Finegan reorganized his office and assigned many cases once sent to outside law firms to his assistant city attorneys instead.

The changes came at a time when the city estimated it had spent $6.5 million over 10 years on outside legal costs largely to defend high-profile excessive force cases involving police.

"At the end of the day . . . we told our folks we have the best legal team in town and we are going to push them," Lucero said.

The steps taken to cut costs reaped immediate dividends.

In 2003, the city witnessed a sharp dip in the amount paid out on settlements. That year it spent $1.7 million, representing about a 66 percent drop over what was spent in 2002 and a 56 percent decline compared to what was shelled out in 2001.

Legal costs spiked last year

But the downward trend didn't last long.

Last year, the city's legal cost spiked again when Denver spent $3.9 million to settle more than three dozen legal disputes.

The big hit in 2004: Denver agreed to pay $1.3 million to bring closure to the police shooting death of Paul Childs.

The mentally disabled teen was shot by officer James Turney at his home in northeast Park Hill when he failed to drop a knife.

"The gorilla was the Childs' case," said City Councilman Michael Hancock, who has pushed the city to rein in legal costs.

Hancock said he is "blown away" by the strides Hickenlooper's administration has made in cutting legal costs.

The city spent a $527,000 in outside legal fees in 2004, shaving costs by $900,000 over the previous year.

So far this year, Denver has paid $200,000 to private attorneys hired to defend cases Denver out-sourced to avoid any appearances of conflict of interest, Lucero said.

Still, some city officials want more accountability, contending some of the city's legal costs are hidden and not as transparent as they should be.

Not every council member agrees.

The City Council's Finance Committee recently squashed a measure, spearheaded by Faatz, that would have required council approval on all settlements and claim payouts totaling $5,000 or more.

Several council members don't want to second-guess the City Attorney's office.

"I'd like to see if this is a real issue or if we just have a couple of wild employee settlements," Councilwoman Peggy Lehmann said. "I, for one, trust the city's managers to make sound decisions.

"If they're not performing well in this area, then it's mostly the mayor's problem."

Payouts by city

A snapshot of money the city of Denver has paid in the past two years to settle claims:

2005 claims to date

Slip and fall $110,000

Fire department auto accident $40,000

Fire department auto accident $39,435

Zoning error $42,500

Excessive force $50,000

Excessive force $15,000

False arrest and excessive force $9,000

Fallen tree limb $15,000

Public works auto accident $27,674

Slip and fall $30,000

Police auto accident $32,200

2004

Excessive force claim $1.3 million

Jail death $210,000

Health care contract dispute $650,000

Police pursuit $95,000

Excessive force $75,000

Public works auto accident $110,000

Police pursuit $80,000

Employment dispute $65,000

Slip and fall $32,500

Slip and fall $25,000

Employment dispute $65,000

Employment dispute $50,000

Use of force $45,644

Use of force $30,000

Public works auto accident $40,000