Lubbock’s City Council could decide Thursday how to settle a dispute over who should pay the costs of legal wrangling with a former health insurance broker.
The council will consider a $500,000 settlement payment from Travelers Lloyds of Texas Insurance Co. for defense costs tied to four city officials and the city of Lubbock.
Lubbock City Attorney Sam Medina, who submitted the plan for council approval, said Travelers had not signed off on the deal.
Marcie Schout, an attorney for the insurer, declined to comment Monday, citing pending litigation.
Medina said the insurer’s position had not changed but that both sides were talking.
“We’ve come up with a theory that’s never been tried before, and we think it’s a pretty good theory,” Medina said.
If approved, the money would go to defense costs in a suit and countersuit filed between the employees and companies that handled health insurance for the city included in an umbrella company known collectively at the time as The Parker Group.
The city has alleged the group of companies improperly collected fees and other costs from the city.
The insurance companies countersued, accusing City Manager Lee Ann Dumbauld, Assistant City Manager Scott Snider, Lubbock Risk Management director Leisa Hutchison and former Mayor David Miller of making defamatory statements about the group.
The complicated battle split into arbitration and a civil suit set for a trial in Dallas in November.
City insurers have maintained all along they owe the city nothing for its defense costs in the case. The proposed settlement would not make any finding on whether or not that was true, Medina said.
He would not comment Monday on what portion of the total legal bills the proposed settlement might represent.
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