City Hall in Ocean City
What started four years ago with a small garden trailer parked illegally on an Ocean City side street has now cost the city’s insurer more than $200,000 in legal fees.
An ongoing lawsuit hinges on two fairly sensational accounts of what ensued after an Ocean City police officer started to write a ticket for the trailer in May 2010. But as the case moves slowly through the court system, the bills continue to mount.
“Monica Raab vs. the City of Ocean City and Officer Jesse Scott Ruch” offers an example of the staggering costs municipalities face in defending against lawsuits.
The city’s insurer has made 10 payments totaling $187,319.74 to one law firm (Barker, Scott, Gelfand and James of Linwood) to defend the city and another three payments totaling $14,417.87 to a different firm (Reynolds and Horn of Marlton) to defend the police officer as an individual, according to invoices provided by the Atlantic County Municipal Joint Insurance Fund (JIF).
The city has offered settlements to end a number other high-profile lawsuits ($50,000 and $75,000 in age-discrimination suits against the Ocean City Beach Patrol, $13,131 in a suit related to use of a K-9 dog, $83,000 apiece to three men in a racial discrimination suit, for instance), and some members of the public have accused City Council of agreeing to pay out without putting up a fight.
But the Raab case illustrates what potentially can happen when two parties cannot agree on a settlement.
At more than $200,000 and with no end in sight, the only guaranteed winners in this litigation will be the lawyers.
The Raab Case
West Atlantic Boulevard resident Monica Raab claims in a complaint filed in 2011 that she was injured by an Ocean City patrolman, Jesse Scott Ruch, who was trying to handcuff her for no reasonable cause following a confrontation over her brother-in-law's garden trailer.
Raab is married to a family physician with an Ocean City practice, Gary Raab, who is part of the Raab Family LLC, which owns some of the most valuable properties on the Ocean City Boardwalk.
Her suit claims
violation of her constitutional rights during an encounter that she claims left her with permanent injuries.
(Read the complete text of her complaint.)
Police reports offer a very different account from Ruch and other officers. The records suggest Raab was uncooperative, hysterical and a danger to her own safety — all because her brother-in-law's trailer was going to be towed.
(Read the complete text of the police reports.)
In the case, the pre-trial discovery (depositions and other fact-finding related to the chaotic scene) is complete.
Michael Barker, defending they city on behalf of the Atlantic County JIF, is seeking summary judgment to have eight of the 11 claims in the suit dismissed. The plaintiff has failed, for instance, to offer evidence that the Ocean City Police Department does not properly train its officers, Barker suggests in his motion. Two other claims already have been dismissed.
Barker said that unless two parties can agree to a settlement, "the defense has no option but to continue to defend the case."
He said lawyers on both sides are generally skilled at making reasonable cost-benefit assessments for their clients, but they don't always heed advice.
"Sometimes they want to be heard in court," Barker said.
The Potential Cost
If the Raab case continues to a trial, the city's insurer would be responsible for the continued cost of a legal defense (adding to the $201,737.61 already spent). The city also would risk an award of damages to the plaintiff — and potentially have to pay all the legal fees for the plaintiff.
"In certain types of litigation, plaintiff's attorneys collect all of their legal fees if they can convince a jury of as little as $1 in damages," said Paul J. Miola, executive director to the Atlantic County JIF. "That leads to outrageous situations where a jury awards the plaintiff $10,000 in damages and the attorney receives $250,000 in legal fees. This is on top of the legal fees the JIF has spent on defense."
"The potential cost of defense can very easily outweigh the costs of settlement in many cases," Miola said. "Our legal system gives everyone their 'day in court' and cases with only marginal value can take years to defend when a plaintiff has their head in the clouds as to the value of their claim."
Barker said if a summary judgment can reduce the number of claims at issue that can only serve to reduce the cost of the case.
The Impact on Taxpayers
Ocean City taxpayers do not pay dollar-for-dollar what the JIF spends in legal fees and lawsuit settlements and damages. Instead, they pay premiums that increase or decrease based on patterns of risk.
"In actuality, lawsuits have a limited effect on Ocean City taxpayers, since we look at the total picture when evaluating member assessments from year to year," Miola said. "That includes property, automobile, and workers compensation claims in addition to lawsuits. In fact, lawsuits comprise less than 20 percent of the dollars we set aside for funding total claims in the Joint Insurance Fund."
"Municipal government undertakes a myriad of activities including 24/7 police and fire protection, trash collection, recycling, road repair, beach and boardwalk maintenance, and municipal governance," Miola said. "With these types of activities, lawsuits are inevitable."
"While not every lawsuit is frivolous, many lawsuits have very slim factual basis to support them. Our system of justice, however, affords all citizens the right to file lawsuits and, in many cases, have their day in court which is not only costly and time-consuming, but often magnifies what the town is alleged to have done wrong as opposed to what the bigger picture may say. For example, tens of thousands of people traverse the boardwalk during the summer. Ocean City has a crew who perform regular inspections and repairs, yet, when someone trips and falls they often file a lawsuit.'
Ocean City will budget $1.6 million for workman's compensation in 2014 but only $796,872 for general liability (a budget item that includes but is not limited to lawsuit assessments). That's up from $644,222 in 2013, $520,111 in 2012 and $449,824 in 2011.
"In summary, Ocean City taxpayers are not severely affected by the lawsuits filed against the city," Miola said. "Frivolous lawsuits, or lawsuits with little merit, cannot be avoided as raw emotion and an effort to 'save face' or seek to downgrade charges will always prompt lawsuits against municipal government. Attorney advertising and efforts to cast blame on others so as not to accept responsibility for one's own actions will continue to plague our legal system and put pressure on municipal time and in some cases, their budgets."
