Insiders see suit as bargaining chip in settlement talks
The El Dorado Hills Community Services District is under attack. As the latest CSD board recall wobbles off the launch pad like a nuke aimed at El Dorado Hills, former General Manager John Skeel, whose firing has fueled two recall efforts and a lot of community angst, launched his own tactical strike last week, filing a civil suit in El Dorado County Superior Court.
The lawsuit portrays Skeel’s five months on the job and the six that followed as a litany of frustration, betrayal and grief — the only bright spots being the steadfast backing of CSD staff that saw him a victim of retaliation and an unexpected groundswell of support from a community that was just getting to know him.
The lawsuit alleges breach of contract, fraud, negligence, legal malpractice, infliction of emotional distress and related charges against the district, its lawyers and its Human Resources manager.
The district and its Gold River law firm, Thurbon and McHaney LP, are named as defendants. Seven individuals are also named: Directors Guy Gertsch, Noelle Mattock, Tony Rogozinski and Wayne Lowery, Human Resources Manager Tracey Lynn Lowry, district legal counsel Bob Thurbon and Lindsay Moore.
Director Billy Vandegrift got a pass for voting against Skeel’s termination.
The CSD is a long-standing member of the Special District Risk Management Association, which provides insurance-like coverage against such lawsuits. SDRMA Risk Manager Dennis Timoney confirmed that the association has hired attorney James Ward of Evans, Wieckowski & Ward LLP to represent the El Dorado Hills CSD, Lowry and the four board members. Thurbon and Moore are responsible for their own representation and and subsequent judgements against them.
CSD Interim General Manager Rich Rodriguez deferred comment on the lawsuit to Timoney, who Village Life reached by phone, and Ward, who did not return calls before deadline.
The lawsuit, or “complaint,” was filed on April 20, and was not unanticipated. Skeel’s legal team of Ellen Arabian-Lee and David Daniels of Roseville law firm Gurnee & Daniels LLP filed a “tort claim” on Feb. 26 that summarized their arguments and triggered thus-far unsuccessful settlement talks. Arabian-Lee would not discuss specific settlement offers.
Observers following the case could see the complaint as a bargaining chip, and expect the talks to resume now that Skeel’s attorneys have shown their hand.
The complaint flushes out the tort claim’s broad allegations, lashing out at Lowry and Mattock for allegedly reneging on promised health care for Skeel and his family when they arrived in January 2011 and for stonewalling his efforts thereafter.
The two attorneys are accused of breaching Skeel’s confidentiality after he sought their advice on a draft reorganization plan that would have outsourced Lowry’s HR position and eliminated Sandi Kukkola’s assistant general manager position, bumping her into a vacant director spot.
The complaint further alleges that attorney Thurbon hatched a whistleblower status to protect Lowry, then accused Skeel of retaliation in a fallacious set of charges, which eventually collapsed under public interrogation by Skeel’s attorneys then reappeared in a bloated remediation plan that ultimately proved impossible, by intent, ensuring that Skeel would not succeed.
The board failed to act in good faith from the start, according to the complaint, overstating Skeel’s actual role in the district management hierarchy and failing to mention the crushingly bad staff morale he would inherit — the result of threats and retaliation from Lowry, who enjoyed a close personal relationship and the full support of Mattock.
The board allegedly failed to deliver key milestones in the employment contract, including goals and performance evaluations, and later “concocted … untrue, contrived and malicious” charges against Skeel to justify his termination while protecting Lowry, then reneged on a public promise to work through differences with their GM, according to the complaint.
The complaint’s narrative of Skeel’s five-month tenure as GM and his fight for reinstatement over the six months that followed is presented in greater detail in “Details of Skeel lawsuit” at villagelife.com.
The complaint’s dozen “causes of action” ask for actual damages from the CSD “in excess of $400,000” for the remaining two years of Skeel’s contract, plus “punitive and exemplary” damages “commensurate with each defendant’s wrongful acts,” which must be proven by a jury.
The complaint’s final “cause of action” alleges that district officials failed to issue Skeel his final paycheck when they fired him on Dec. 8, 2011, thus violating state labor codes which now entitle him to an additional 30 days of pay plus attorney’s fees to prosecute the claim.
The complaint also seeks:
• Compensatory damages, including wages lost, future wages and benefits.
• General damages for mental and emotional distress.
• Interest on wages lost
• Attorney’s fees
• Punitive and exemplary damages against individual defendants
Local Human Resources Attorney Jake Flesher handles similar cases, and pointed out that all seven defendants are named in their capacity with their employer, and also as individuals, which potentially exposes them to punitive damage claims, but only if Skeel’s attorneys meet “criminal levels of proof” that the individual defendants acted outside their scope of their duty to violate Skeel’s rights with “malice, fraud or oppression,” he said.
Timoney confirmed that public agencies like the CSD are protected by law from punitive damage claims, but any of the seven individual defendants found by a jury to have acted “outside the scope of their duty and intentionally violate some rights of Mr. Skeel” would enjoy no such protection.
Any resulting damage claims are, by law, are not covered by the SDRMA, he continued.
“Punitive damages are meant to punish,” Timoney said. “If you had insurance it wouldn’t be punitive.”
Fraud is deemed an intentional act by an individual, and is not covered on similar grounds, he added.
Government code allows the individual to request the district to cover damage claims, according to Timoney, who explained, “The board would have to approve any such indemnification.”
But Timoney, who’s seen a lot of these cases, doesn’t think this one will ever get that far.
“Just because a suit gets filed doesn’t mean negotiations aren’t still ongoing,” he said. “It’s in the best interests of the board, Mr. Skeel and the residents of El Dorado Hills that this thing get resolved before it goes to trial.”
Flesher agrees. “This complaint is all about getting the best settlement for Skeel,” he said. “There’s little question in my mind that Skeel’s attorneys are seeking seven figures here.”