Lovell council approves lawsuit settlement fund agreement

The Lovell Town Council voted at a special meeting Tuesday to proceed with an agreement with Flatirons Bank of Boulder, Colo., to set up an arrangement for the town to be a vehicle for settlement funds in lawsuit cases.  

The possible arrangement with the bank first came up at the August 8 council meeting, during which three individuals approached the town regarding a proposal to use the town as a vehicle for the establishment of a company to work with qualified settlement funds (QSF), which are used by trial lawyers following a settlement or judgement to protect large sums of money when the FDIC only insures accounts to $250,000.

According to a definition from Synergy Settlement Services, “a QSF is a trust established to receive settlement proceeds from a defendant or group of defendants. Its primary purpose is to allocate the monies deposited into it amongst various claimants and disburse the funds based upon agreement of the parties or court order, if required. Upon disbursing all of the monies the QSF ceases to exist.”

Speaking for the trio in August was Jakob Norman of the firm Trial Lawyers for Justice from Bozeman, formerly of Casper, and accompanying him were Kyle Heckman of Flatirons Bank from Boulder and Nick Coccimiglio of Justice for Life, from Alpine, Wyo.

Norman explained at the time that he found out about Lovell through a friendship with Lovell native Steve Allred, who he knows through service in the Wyoming National Guard. He said he was interested in establishing a relationship with the town to operate a QSF company, which must be approved by a governmental entity.

He said once a settlement or judgement in a lawsuit is reached, the person awarded the funds must have a temporary place to hold the funds, and a QSF is a vehicle to do so. The town would be the pass-through vehicle for the money in an administrative role but would not actually handle the funds or be liable in any way. The town would, however, receive a filing fee as the government agency of record.

“We don’t touch the funds,” Mayor Tom Newman emphasized in August, noting that the town would, in essence, act as an auditor to make sure funds come in and go out through the QSF. The filing fees could be substantial over time, he said.

Since that meeting, the town legal counsel has been reviewing the arrangement, and town administrator Jed Nebel said at last week’s town council meeting that town attorneys Alexa Rolin and Scott Kolpitcke have reviewed the agreement and “can see nothing to run away from” while noting that the indemnification language for the town is strong.

Nebel noted some minor changes the attorneys had already recommended for the agreement, and the council voted to proceed with the agreement pending the acceptance of the changes, with the council to vote on final approval at a special meeting, which was held Tuesday.

Tuesday, the council voted unanimously to proceed with the agreement, technically a 468B Fund Service Agreement. Nebel has had a series of exchanges with town attorney Rolin regarding the agreement and reviewed the last recommendations with the council at Tuesday’s special meeting.

One of the items recommended is changing the timing of the required approval of each settlement fund from one day to three days. Another is adding town clerk/treasurer Colleen Tippetts, joining Nebel, as an employee with the authority to approve each QSF transaction. A third is that the fees to be paid to the town are done so by check, rather than wire transfer.

The attorney also requested that legal counsel review each transaction before approval, and Nebel and the council agreed that the attorney or her firm could review the first few transactions, and once the system is well established, review may not be necessary in the future. Nebel and Mayor Newman pointed out that it’s up to the council whether the transactions are reviewed by legal counsel, noting that the transactions tend to be “boiler plate.”

The attorney also recommended that the town be listed as an additional insured entity by the bank, which Nebel said is essentially a matter of clarification with Flatirons Bank.

In deciding whether to move forward, Newman said he’s comfortable with the way the agreement works, noting, “All we’re doing is certifying that an account gets set up and the settlement is paid out.” He also said the town also can pull out of the agreement if necessary.

“We will need to do our due diligence on every one (transaction),” Nebel pointed out.

“There are some unknowns, but I’m at the point where I think we should try it,” Newman added. “We need to give them an answer. We’re at the point where we need to decide to do it or not do it.”

With that, the council voted to approve the 468B Fund Service Agreement with Flatirons Bank. The Town of Lovell will receive $25 for each 468B fund submitted by the bank and an additional $75 for each 468B fund that is funded from the proceeds of a claim.

Other council business

The Lovell Town Council had a busy but productive meeting for the regular October council meeting last Tuesday at town hall.

Following a brief public hearing regarding a resolution passed later in the agenda, the council honored Lovell High School senior Ireeann Anderson for her service to the town. Anderson recently undertook a project to paint the caboose at Caboose Park at Seventh and Great Western in Lovell.

Anderson had noticed that the caboose was looking worn out and got a group together to paint the caboose.

Town administrator Nebel said he appreciated Anderson’s project, noting, “Probably three groups had contacted me in recent years about painting it, and no one ever committed or finished it.”

Mayor Tom Newman presented Anderson with a certificate of appreciation.

Rodeo club

Charis Bischoff addressed the council regarding the agreement between the town and the Lovell Rodeo Club, noting that the club has requested an agreement similar to the town’s agreement with the Foster Gulch Golf Course and stating that the club is working to obtain the necessary insurance.

Nebel said town attorney Rolin is reviewing the agreement, and the council can also work with the rodeo club during a work meeting.

Budget resolution

With no comments made during the earlier public hearing, the council passed Resolution 2023-2, which provides for the reallocation of budgeted funds within the general fund for the 2023-24 fiscal year. The reallocation fixes a typographical error in the electricity budget for the sewer fund, which read $1,600 and should have read $16,000.

The resolution increases the electricity budget by $14,400 to fix that error and adds $1,300 for building cleaning and maintenance in the police department budget, $5,000 for equipment maintenance in the streets department budget and $1,500 for equipment purchase in the administration department budget.

Engineer Willie Bridges of Pryor Mountain Engineering was in attendance October 10 as the council proceeds with Phase II of the Constitution Park project, with Pryor Mountain having been selected as the firm to plan and oversee the project. Nebel said that, after negotiating with Bridges, the firm will bill the town on an hourly basis with the final cost not to exceed the budgets amount for engineering, $39,000.

Nebel said the name of the project must remain “Constitution Park” due to already existing grant documents, even though the council returned the name of the park to Armory Park. He said bid documents should be ready by this winter for construction next spring and summer.

In other items October 10:

• Engineer Jeff Barron of Sheridan from WWC Engineering addressed the council to talk about his firm, which he said has a lot of experience in civil engineering including multiple projects with municipalities. He said WWC has offices in Sheridan, Casper and Laramie, plus three Montana communities and is “very interested in the Town of Lovell,” noting that he recently completed a capital improvement plan in Greybull and has worked with Nebel on handling American Rescue Plan Act funds.

• Mayor Newman appointed HK Click as deputy building inspector, and the council voted to approve the appointment.

• The council voted to approve an agreement with Consentus Technology for a server upgrade for the town’s government accounting software. The current system is out of date by the end of the month, not allowing for future Caselle software updates. The council voted to approve the upgrade with a five-year warranty for $14,899.

• Nebel said he is working to get MOUs in place for working with Big Horn County on dispatching services and expects the agreements to be in place by the November meeting to allow redundancy in case a dispatch center goes down. He said he would like to see a joint powers board be formed to regulate 911 funds that come in.

• The council voted to hire Kodiak Pest and Lawn take over pest control at the community center.

• Nebel reported a request from the Lovell Area Chamber of Commerce to support the Lovell Main Street Mingle on Saturday, Nov. 18, by purchasing cookies and hot chocolate for $200. The council agreed to once again support the Mingle.

• Nebel presented a letter from the Wyoming Department of Revenue informing the council that, due to an error in taxing a major company and the need to rebate the tax money, municipalities are being asked to turn back some money previously received. Lovell must return $29,823 over the next three months.

• The council agreed to have the town send a letter of agreement to Big Horn County for an amended plat for the Pryor View Subdivision. The council also voted to approve a minor subdivision at 892 Jersey, contingent upon approval by the town planning and zoning commission.