The Lake Wales City Commission on Tuesday night unanimously approved a settlement in the sum of $103,000 with one of the seven plaintiffs in the Lake Belle flooding case.
According to the mediated settlement agreement, “the parties have reached a full and complete settlement as to all of the issues associated with the case filed by Marcia Vanderveen, formerly known as Marcia Mudd, and her late husband, Keith Mudd.” A mediation conference was held on Sept. 27.
The agreement goes on to state “the parties understand and agree this settlement is exclusive to the claims brought by Marcia Mudd and Keith Mudd, now deceased, in this action and does not settle any claims of the other plaintiffs in this cause who now have their claims in separate individual cases.”
The agreement also says the City of Lake Wales agrees to pay the mediator’s costs totaling $2,800.
The commissioners didn’t discuss the settlement during the regular meeting. They held a “shade” meeting, which is closed to the public, before Tuesday’s meeting to discuss it.
“This particular case is significant from a settlement standpoint because it has been characterized and the court has found that it is a partial taking,” said Chuck Galloway, who is the city’s attorney. “Because of that, there are significant issues that affect the city and potential damages against the city.
“The first is that pre-judgment interest accrues from the beginning of the action,” Galloway said. “So even if you have a small settlement amount, the interest on it commencing from the 2006 filing of the action can be significant over time.
“The other thing is because it is a takings case the city becomes responsible for the attorneys’ fees and costs for both sides,” he said. “It is a difficult area of the law. It has potential for huge damages and so my recommendation and that of our trial counsel and city manager was that this body approve this settlement and they have done so.”
In explaining what a “taking” is, Galloway said the litigation came about after the hurricanes in 2004 and the tremendous rainy season in 2005. Lake Belle, which is south of the city, rose a cumulative approximately 14 feet.
The allegation of the plaintiff was all of that rise in water was caused by the city, Galloway said.
“The court found, based upon the testimony of the city’s expert, that 13 feet of that were attributable to an act of God and the last foot was attributable to the City of Lake Wales.”