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Rebuttal to Collinville’s David Jerome’s comment on Cheryl Brombolich’s alleged prohibited interest in contract

COLLINSVILLE, IL. (ECWd) –

This is a public rebuttal of a public comment made by David Jerome, a Collinsville Alderman, and also an attorney. He commented on Facebook about the article entitled “Collinsville Alderwoman Cheryl Brombolich settled a lawsuit in contradiction with the law, receives $200,000   We anticipate updating as the situation warrants.

Before we get started, it would benefit your understanding of the issues if you would read Meade v. City of Rockford at least once (here). It points to several issues that must be understood, and that applies to litigation settlement agreements with an Illinois Municipality:

27, 29, 41-42, 43 – A settlement is a contract that must be approved by the municipal board

14 – Expenditures or appropriations of municipal funds must be voted and approved by the municipal board

24 – Municipalities cannot delegate their responsibilities to approve these expenditures of public funds

28, 37, 41-42 – This is true even if the settlement never mentions it is subject to the municipal board’s approval

Ignorance of the requirements for settlements with municipalities is not a defense: “…those who enter into agreements with municipalities are charged with knowledge of the statutory requirements that govern such agreements. D.C. Consulting Engineers, 143 Ill. App. 3d at 63…

The Statutory language of the Public Officer Prohibited Activities Act “was “purposefully broad and inclusive.”  It not only forbids an official from having a private interest in situations in which a binding contract exists but from also allowing himself to be placed in a situation where he may be called upon to vote in the making of a contract in which he has an interest. The evil exists because the official is able to influence the process of forming a contract.” People v. Savaiano, (1976) Illinois Supreme Court.

In responding to the comment, we broke it up into manageable portions, but all of it is there. We invite comments but ask they be kept civil. We stand by everything previously written (here).

Collinsville Alderman, and licensed attorney, David Jerome

From Barney Rodawald: This is what Attorney David Jerome posted (see his complete comment here):

DJ:  This article shows that a little knowledge of facts and law can be a dangerous this. This article misrepresents both the facts of this matter as well as the law….at least the author places a disclaimer that they are not attorneys.

ECWd:

The facts represented in the article are that 1) Cheryl Brombolich is an Alderman in the city of Collinsville, and, 2) she filed a lawsuit against the city prior to becoming elected as an alderman, and, 3) she improperly settled (while being an alderman) the lawsuit she had against the city and did so while receiving financial reward.

The laws cited in the article was that 1) the Public Officer Prohibited Activities Act prohibits direct or indirect interests in contracts of municipal officers, and, 2) that caselaw supports the fact that a settlement is a contract and that an elected official of a public board cannot settle a lawsuit against the public body they are a member of when it involves financial reward – even if that financial transaction goes to the member’s attorney, and, 3) that a court cannot “order” a party to settle, and, 4) an insurance company cannot “dictate’ settlement terms to a public entity, and, 5) that this settlement must be voted on by the city council.

DJ:  Well, I am an attorney and I can tell you that the Act described in the Article as well as the Madigan case cited by Dorman are both irrelevant to the issues involving Cheryl Brombolich.

ECWd:

You might be an attorney, but from reading this entire comment it appears you lack knowledge of the municipal code and standard conflict of interest issues in local Illinois governments. Both the cited Public Officer Prohibited Activities Act and the caselaw cited in the article and the article linked to for further reference are relevant to this situation with Brombolich.

DJ:  Brombolich’s cause of action was a wrongful termination action from when she was the City Deputy and had nothing to do with her position on the City Council.

ECWd:

The “cause of action” of this lawsuit is immaterial to the issue of her improperly settling the suit against the city for financial gain. The fact that it was a settlement had everything to do with her position on the City Council.

DJ:  Further, she was not a participant and was removed from all closed session meetings involving this litigation.

ECWd:

She filed the lawsuit, how can she be considered anything but a participant – without her as a participant to the lawsuit, there is no lawsuit. To be found in violation of the Public Officer Prohibited Activities Act and the Illinois Municipal Code, there is no requirement to be a active participant, no requirement to be removed from all closed session meetings involving this litigation (which is another issue – the council lacks authority to remove her from closed session meetings involving this issue) – in other words, even if she was on vacation on the other side of the world, the conflict still exists.

DJ:  Therefore, she did not profit from her position on the Council nor was she in conflict as the cause of action PRE-DATED her being elected.

ECWd:

Yes, she did profit from her position on the Council and she was in a conflicted position – the date of the cause of action is irrelevant, it is the date of the settlement that is the relevant date.

DJ:  Further, she did not influence or participate in the discussions regarding its outcome.

ECWd:

There is no need to prove any influence or participation, she influenced by holding an elected seat on the City Council. That is the influence and that is the participation. Peabody v. Sanitary District: “irrespective of whether state or municipal funds are used to procure the contract…” and “irrelevant whether an interested officer takes part in the letting of the contract or votes thereon” and “the question is not what the interested officer did, but what he might be called upon to do, which determines the application of the statute” and “neither favorable treatment nor affirmative participation is necessary to proscribe municipal officers from being interested in contracts with the city”

DJ:  The Madigan decision involved a trustee who actively participated in the negotiation of the settlement agreement…that was NOT the case here.

ECWd:

Participating in negotiations is not a prerequisite for conflicts of interest or prohibited interests in a contract.

DJ:  Second, the author concludes that the insurance company cannot dictate the terms of settlement.

ECWd:

A public body does not have the authority to give their statutory duties to anyone. Their duty is to the public, not to the insurance company.

DJ:  That is legally and factually inaccurate. I have represented insurance companies as well as injured individuals and I can tell you that the insurance company retains EXCLUSIVE power to resolve cases in spite of or in contradiction of a policyholder’s request.

DJ:  Anyone who has been in a car accident and has been sued knows that they simply become witnesses to the events and the insurance carrier decides when and how much to pay.

ECWd:

That might be the case for traffic accidents not involving a public body, however, that is not the case with a lawsuit against a public body involving a prohibited interest in the contract.

DJ:  In this case, the City Council did NOT vote and was not asked to vote on the payment of this settlement. This was done exclusively by the insurance company as it was their money.

ECWd:

The council was REQUIRED to vote on this settlement. Gifting their [the public’s] voting and financial transaction approval authority to an insurance company violates the Illinois Municipal Code. The settlement reflects that the city and the alderman signed it. Funds paid by insurance companies “on behalf of” a public body are considered funds of the public body.

DJ:  Whether you agree or disagree with the outcome is not for us to decide as the insurance company chose to settle to avoid the possible exposure stemming from a jury trial.

ECWd:

The insurance company lacked the authority to settle (in the manner you suggest they settled), and even if it did have that authority (which they don’t), the council was REQUIRED to vote on this settlement. Leaving it up to the insurance companies invites the “evil” to dine at the public trough.

DJ:  If the City were self-insured and the settlement proceeds came directly from taxpayer monies, then we may have had some level of say in the outcome. However, that was not the case and the insurance company chose to settle and pay out of its own pocket without asking but simply telling us of the outcome.

ECWd:

The council was REQUIRED to vote on this settlement – AND, the city paid at least $10,000 out of the city treasury for the deductible, plus all insurance premium payments. Additionally, monies paid by insurance companies “on behalf of” public bodies are considered monies paid by those public bodies.

DJ:  Any statements to the contrary are simply false!

ECWd:

That statement you just made was false!

DJ:  I hope this helps to clarify this issue as this Council has done everything in its power to maintain an open dialogue on this and every issue so that you can see that what we are doing is what we see to be in the best interests of moving this City forward.

ECWd:

Your comments confuse people and get them to thinking nothing was wrong with this settlement, when the fact is, everything was wrong with this settlement. It was never approved by the council, and the recipient of the financial reward was sitting as a councilman while allegedly violating the laws concerning financial interest in contracts.

==============================

  1. http://illinoiscourts.gov/Opinions/AppellateCourt/2015/2ndDistrict/2140645.pdf

Other information:

Section 3.1-40-40 of the Illinois Municipal Code requires that all expenditures obtain the concurrence of the majority of all members then holding office. Votes must be in yeas and nays and recorded. [Meade v. Rockford, 2015 IL App (2d)14065]

Prosser’s Rule states that any abstention is a vote for the majority, except that on an “affirmative vote” requirement, abstentions are considered a “No” vote

Joseph Bertrand’s Rule states that Prosser’s Rule does not apply to the member of the governing body having a financial interest in the matter (conflict of interest).

Section 3.1-55-10 of the Municipal Code prohibits direct or indirect interests in contracts. This section mirrors the Public Officer Prohibited Activities Act.

The only ways to eliminate the conflict are 1) resign from office, or, 2) remove the conflict (take it off the table – it does not get to exist)

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Categories: feature

9 replies »

  1. I have read the attached article but remain steadfast in my position on this issue. However, after reading this article, I now understand the author’s misunderstanding on this issue. Settlements come in two forms. The first form of settlement is when the municipality is self-insured and pays from its own funds for the resolution of the case. In such instances, the Council would have been required to vote on the payment of any such expenditures. The second form of settlement is when the municipality has paid premiums to an insurance company to handle any such lawsuits. In such instances, the insurance company’s contractual terms allow the insurance company to decide if and when it will settle. In such instances there is no vote required of the Council because the proceeds that are being paid outcome exclusively from the insurance company.

    There is no taxpayer money being paid in such instances with the exception of the $5000 deductible that would need to be paid regardless of the outcome. Interestingly, this same situation is present in the Scott Williams case and the deductible paid out will be identical. Most importantly, I will reiterate that the settlement proceeds are being paid by an insurance company and not by taxpayer dollars.

    I realize that some who review the situation may have thought otherwise as most people are unaware as to whether their city is self-insured or simply paying premiums on the policy. That is why I am providing this extensive response to this issue to confirm that the City of Collinsville paid premiums to an insurance company and therefore the decision on whether to settle or try a case remained exclusively with the insurance carrier by way of its contractual terms. Additionally, I can confirm that there was no vote required for the payment of the settlement as the determination was made exclusively by an insurance company that assessed its level of risk and chose to settle versus going to trial.

    Further, I stand by my prior legal analysis regardless of the cases cited by the author of this article. I realize that I have only spent the last 24 years representing or bringing claims against insurance companies. As any attorney knows, continuing legal education is crucial to an attorney remaining current on the law and not becoming complacent with the ever shifting status of the law. I attend multiple continuing legal education seminars every year to do my best to stay up on the law and I am always willing to hear counter or new legal ideas or theories. Having said that, it remains my position that there was nothing illegal that was done by the Brombolich or the insurance company regarding the completion of this settlement.

    Additionally, I believe that my position is bolstered by the fact that this settlement underwent scrutiny by three different attorneys as well as the judge who approved the settlement. I am familiar with Cheryl Brombolich’s attorney, Jack Daughtery, by his reputation in the legal community. He is known as a knowledgeable and aggressive attorney who does a very good job and representing his clients’ interests. I truly believe that if this settlement were a criminal act, he would certainly have not recommended its settlement. Further, the insurance company was represented by a firm from Chicago as well as an in-house legal counsel. If either one of these attorneys had seen an opportunity to dismiss this matter due to its felonious nature, I can assure you that they would have certainly filed the appropriate motions to have it dismissed. Insurance companies are not in the business of settling claims when there exists a basis for full denial.

    Finally, it should be noted that no settlement can be completed without the approval of the court. In the present case, the settlement terms that were negotiated between the insurance company and Brombolich’s attorney had to be approved by the Circuit Court Judge. If this had been an illegal action by either of the parties in creating such a settlement, it certainly would not have been approved by the Court. Regardless, if the author truly believed that this act was felonious in nature, he certainly could have alerted the State’s Attorney or even the Attorney General for the State of Illinois to investigate such activities. To my knowledge, no such investigation has been opened.

    As a result, the authors misunderstanding of the insurance policy has led to his citing and arguing for conflicts that normally exist when the settlement proceeds come from public monies. However, the allegations of conflicts of interest are negated when the final determination regarding the settlement terms were dictated by the insurance company.

    In showing the errors in this assertion, I would like to present a similar type of case to show how this would play out. Let’s assume that HYPOTHETICALLY Brombolich, while City Deputy, was rear-ended by a truck from the Collinsville street department that was due to the negligence of the street department driver. She sustained bodily injury as well as damage to her vehicle. She later would become a member of the City Council prior to the settling this motor vehicle accident claim. Further, assume that the insurance company was a separate insurance company and the City was not self-insured. Under the author’s scenario, Brombolich would be required to drop this suit even though it was from an accident that had occurred well before she became a member of the City Council.

    We know that this is simply not the current state of the law. There exists no conflict since the cause of action and injuries occurred well before she took the position as a member of the City Council. Further, there exists no conflict with the insurance company settling any such claims without the consent of the Council since they are a separate insurance company who contractually is allowed to settle or deny claims regardless of the opinion of the City Council. In such a scenario, it would NOT be illegal for her to settle a motor vehicle accident against the insurance company for negligent action that occurred well before her becoming a member of City Council.

    The current settlement that is being discussed by the author involves a wrongful discharge that occurred well before she became a member of the City Council. To require her to drop a lawsuit against the City for events that have occurred prior to her becoming a member of City Council is no different than the motor vehicle accident discussed above. As such, I stand by my position that there was nothing illegal or felonious as the author describes. Further, the insurance company DID retain exclusive authority to settle this matter without requiring any form of vote from the City Council.

    I hope that this helps to clear up this issue. As a member of the City Council for the City of Collinsville, I am very proud of the way that our Council has held itself to a high ethical standard. I am also very proud of the fact that we have televised every one of our meetings and done our very best to be transparent in all of our decisions. We will continue to proceed forward in this same manner and we will continue to move the City of Collinsville forward in a positive direction.

      • How is paying insurance premiums and a deductible not taxpayer funds? Are the Aldermen digging into their own pockets to pay the premiums? Not likely. She didn’t need to drop her case as it started prior to her election to the city council. The law just says it needed to be approved by the town’s governng body.

        Insurance covers a pool of insureds and the risk is spread out among those in the pool. Your premiums reflect the “risk” the pool poses to the insurance company and belive me, the insurance company will mitigate that risk if too many claims are paid for that pool by increasing premiums. It’s not “free” money and any claims paid out effects everyone in that particular pool.

        And let’s just leave this out there…why would a municipality give anyone including an insurance company carte blanche to settle a case without approval or vote of its governing body? #transparency

        • As far as the dropping the case you talked about, I believe the only proper things would be: 1) Drop the case, 2) Resign, 3) Let it continue to trial and let the Judge issue a determination. But a settlement, especially one with a financial windfall, cannot be tolerated.

          • OK, I’ll agree it should have come to its natural end at trial, no settlement. But let’s leave another one out there shall we???

            If you have a lawsuit against a municipality for wrongful termination, why would you run for an elected office on the City Council? #revengeismine #iwillshowthem

  2. It’s still amazing how many attorneys whose specialty is supposed to be “Municipal Law” get it wrong almost every time. Who is vetting these law practices? This is some of the most contorted advice ever. ECW, have you found any conflicts of interest between this lawyer and any elected officials or “influencers” in Collinsville?

  3. WOW and double WOW. With DJ’s statements totally debunked….how on earth does someone like DJ ever become an attorney or…is this the true state of justice in Collinsville? I’m shaking in my boots at this attorney’s level of ignorance, bull headedness and determination to remain stupid in the face of the first article’s thrashing and the facts. Why did he even open his mouth and choose to go another round? Can he not read, or is it a comprehension issue?

    It’s totally appalling how many county board, city boards and public officials…and even lawyers….such as DJ….that will absolutely will not read the statues…even when their twisted opinion is horribly exposed as nothing more that a self serving, ego inflating, gassing.

    Does DJ suddenly wish to surrender his law license for the good of the State? Probably not, although there is an argument that could be certainly made… Does DJ wish to resign his board position and take his flawed legal opinions elsewhere…probably no….. not that much integrity.

    DJ is not only a telling embarrassment to the legal professionals there in Collinsville…..he’s doing double duty; as the poster child of the perfect pompous ass.

  4. I am beginning to think that if attorneys just babble and babble they might give the impression they know what they are talking about but in fact have no basis for many statements.

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