notebook - Southwest Florida Water Management District

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notebook - Southwest Florida Water Management District

Item 17.e.

Consent Agenda

October 30, 2012

General Counsel’s Report

Administrative, Enforcement, and Litigation Activities that Require Governing Board Approval

Settlement – Mudd v. City of Lake Wales and SWFWMD (Tenth Judicial Circuit) –

Polk County

This case concerns an inverse condemnation claim arising from the flooding of multiple

properties located in Polk County on a peninsula of land that projects into Lake Belle. The

flooding occurred primarily in 2005, a year in which Lake Belle experienced record water levels

due to rainfall well above the average annual amount for the area. Co-defendant, the City of

Lake Wales, owns and operates rapid infiltration basins (RIBS) near Lake Belle as part of its

reclaimed water system. The plaintiffs in this case contend that lateral seepage into Lake Belle

from high volumes of water pumped into the RIBS may have contributed to the flooding of the

plaintiffs’ properties.

In 2006, the District was named as a defendant in the lawsuit because it had entered into a

Cooperative Funding Agreement with the City whereby the District helped fund the design and

construction of the City’s reclaimed water project. The District filed a motion to dismiss, and in

2007 the motion to dismiss was granted. However, in 2008, the plaintiffs further amended their

complaint and the District was rejoined as a defendant.

A four-day bench trial was scheduled for October 8 through 11, 2012. On the morning of Friday,

October 5, the Office of General Counsel was advised by the District’s outside counsel that the

plaintiffs’ attorney proposed settling the case as to the District for $100,000. Since trial was set

to begin on Monday morning, October 8, the General Counsel consulted with the Executive

Director and the Board Chair to obtain approval for settlement pursuant to Board Policy 160-3,

which allows such approval “if the matter requires immediate action and cannot be delayed to

be represented at the next regularly scheduled Board meeting.” After further negotiations, the

parties agreed on the morning of trial to settle for $40,000, subject to Governing Board approval.

While the District had a strong defense to plaintiffs’ claims, the settlement brings certainty of

result, avoiding potentially significant liability plus plaintiffs’ attorney’s fees, while also avoiding

the costs of a four-day trial.

Staff Recommendation:

Approve the settlement agreement whereby the District will pay the plaintiffs $40,000 in

exchange for being dismissed from the lawsuit.

Presenter:

Joseph J. Ward, Senior Assistant General Counsel

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