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An attorney who has sued the Southeastern Economic Development Corp. over the termination agreement given its ousted president, Carolyn Y, Smith, has offered to drop the lawsuit if the agreement is voided and the agency pays nominal legal fees to his client.
Smith was fired by SEDC’s board of directors in July after it was revealed that she authorized hundreds of thousands of dollars in hidden bonuses for herself and her staff. When she was terminated, then-SEDC board Chairman Artie M. “Chip” Owen announced that the board had voted in closed session to pay Smith a $100,350 severance payment.
The lawsuit, brought by local attorney Cory J. Briggs, claims that severance payment violates the state’s open-meetings law, known as the Brown Act, because a public body is not permitted to discuss or vote on compensation for employee dismissal in a closed meeting.
A letter sent today by Briggs offers to drop the lawsuit on behalf of his client, community activist Ian Trowbridge, if the termination agreement is fully rescinded and the agency reimburses $1,000 in legal fees to Trowbridge.
The letter reads:
Your client will spend a substantial amount of taxpayer money — many times more than the $1,000.00 reimbursement that my client is seeking — defending a lawsuit the merits of which your client’s own documents prove. Moreover, when my client prevails at trial, your client will end up having to pay a five- or six-figure judgment for attorney fees and court costs.
The letter, which is addressed to SEDC Corporate Counsel Regina Petty, gets a bit more snarky, making references to recent statements by Petty and to an audit released last week that states that SEDC’s actions rose to the level of fraud:
I’m sure that I need not remind someone with your unsurpassed degree of competence that Section 202 of Ms. Smith’s employment agreement with SEDC expressly authorizes it to terminate her employment immediately in the event of fraud. The findings in the performance audit released last week confirm Ms. Smith’s rampant acts of fraud.
SEDC’s board and committees of the board have discussed Briggs’ lawsuit several times recently.
Meanwhile, the board has undergone a significant overhaul. Five members of the board who had been stalwart Smith allies have been replaced. The four existing board members have been more critical of the agency and its staff.
But, late last month, before the board could be fully reformed, SEDC’s old board had one last chance to consider Briggs’ lawsuit and Smith’s termination agreement.
In the run-up to that Aug. 27 meeting, the mayor, a City Council member and the city attorney all wrote memos to SEDC’s board warning them not to take action on matters that could affect the incoming board.
The board ignored those warnings. Petty informed the board members that they would be breaching their fiduciary duty if they didn’t consider the lawsuit against Smith immediately, and the lame duck board discussed the lawsuit in closed session. It voted unanimously to keep Smith’s termination agreement intact.
Briggs letter also makes reference to those and other events:
Of course, I imagine that there may be some members of SEDC’s board of directors who have been duped into believing that SEDC must defend the Termination/Release Agreement in this lawsuit in order to avoid yet another lawsuit by Ms. Smith for breach of contract. At the same time, I know that a lawyer like you, who also claims to have more integrity than any other lawyer in the country, would never fail to point out to duped directors that Ms. Smith — if she dared to sue after having already absconded with a quarter-million dollars — would have the burden of proving that she was not terminated for fraud. The mountain of evidence of fraudulent conduct that is already in the public domain would probably dissuade her from suing and virtually assures that she would lose if she were to sue.
Briggs’ letter gives SEDC until Sept. 25 to respond. SEDC’s board meets on Sept. 24.