Providence one step closer to closing lawsuit

by Matt Hughes

J-E News Editor

Officials with the city of Providence hope to soon bring closure to an issue that has plagued the city for close to ten years, and add another $600,000 back into the city’s bank account.

In October of 1997 the Ohio Casualty  Insurance Company (OCC) issued a surety bond to the City of Providence, in which it agreed to indemnify Providence up to the sum of $300,000 for losses caused by various acts and omissions attributable to then city clerk Sara Stevens.

“Providence subsequently terminated Stevens’ employment in May, 2004, upon discovering that Stevens had embezzled city funds in excess of $300,000 over a period of several years,” Appeals Judge Joy A. Moore wrote in a 2012 decision. 

“It took a couple of years to get the first $300,000,” said Providence Mayor Eddie Gooch. He added that at that point OCC felt that it’s obligation to the city was complete. City officials disagreed.

“The city felt that the bond insurance company owed us two more years,” Gooch explained. “They tried to say that it was a one year thing.”

“Based upon the previously mentioned bond, Providence then filed an action in Webster Circuit Court against OCC to recover an amount in excess of $300,000,” Judge Moore continued.

Circuit Judge Rene Williams found in favor of the city of Providence, ruling that OCC owed Providence $300,000 for each year covering the period of 2001, 2002 and 2003.

OCC appealed the decision to the Kentucky Court of Appeals, which is when the case appeared before Judge Moore and two other  judges.

That courts decision stated that the circuit court’s ruling was in line with state law, however there was one slight problem.

“There was something in the wording that they didn’t like,” said Mayor Gooch.

“CR 54.02 required the circuit court’s order to recite not only that it was final, but that there was ‘no just reason for delay’,” Moore wrote. “Here, the circuit court’s order simply recites that it is “a final and appealable order,” but omits that there was “no just reason for delay”; its subsequent order overruling OCC’s CR 52.02 motion for additional findings did not cure this omission; and, as a consequence, the circuit court’s order, which is the subject of this appeal, is merely interlocutory and unripe for review.”

The appeals court then ruled that it was OCC’s responsibility to make sure the circuit court’s judgement was in the proper form and dismissed the appeal.

Last month the appeal finally found it’s way back to the appeals court, which heard from both sides.

“We don’t know how soon there will be a ruling,” said Gooch. “It could be a soon as 45 days.”

Gooch said he was confident that the appeals court would rule in their favor, but that still might not end the case. If the Kentucky Court of Appeals rules in the favor of the city of Providence, OCC will then have the option to either pay the remaining $600,000, or take their appeal to the Kentucky Supreme Court.

“That appeal could take another three or four years,” Gooch said.