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County faces heavy lawsuit costs with limited insurance

LOCKPORT – A year ago, a judge hit Niagara County with a $7.25 million damage verdict for a construction worker whose leg was crushed by a pile of 300-pound replacement windows at Niagara County Community College.

The county also is expected to soon face a wrongful death lawsuit stemming from a fatal accident involving a sheriff’s deputy.

If the county loses or settles that case – and insiders say the facts may make it hard to defend – it could be another high-priced damage award against the county.

But the county insures itself for damage awards. It has no catastrophic liability insurance, meaning that if things don’t go well for the county in court, its financial position might take a big hit.

It’s too late for the county to obtain catastrophic insurance for these cases – “It will never be retroactive,” Risk and Insurance Director Jennifer R. Pitarresi said – but should the county make the investment in case of future claims?

“That’s something that’s a business decision that’s been looked at from time to time, and it never made financial sense,” Pitarresi said.

When the county settles any lawsuit before trial, any payment of more than $25,000 requires the approval of the County Legislature. So would an investment in a catastrophic coverage policy.

“After speaking with the county attorney, there’s a reasonable chance that enough insurance is in place relative to the large judgment,” said Randy R. Bradt, R-North Tonawanda, majority leader of the Legislature. “Being a good-size county with an annual budget of $350 million, this is a perfect time to review this issue to ensure the taxpayers are protected. This issue needs to be addressed immediately.”

Pitarresi said,”We’ll be looking at it again.” But she said the last time the county considered buying catastrophic liability insurance, the premium would have been more than $900,000 a year, and the policy would have carried a $500,000 deductible.

“It didn’t make sense to the policymakers to do this,” Pitarresi said. “The premium would have exceeded the amount of any claims we had at the time … If we pay the premium every year and we have no claims, we can’t get that money back. It’s just like the health care plan. We are large enough to self-fund and manage our own risk.”

The county also hires its own attorneys for liability cases – usually the Buffalo firm of Gibson, McAskill & Crosby – and negotiates its own settlements. With a catastrophic coverage policy, the insurance company would choose the lawyers and make the settlements, although the Legislature still would have to approve the deals.

County fights verdict

County Attorney Claude A. Joerg said in the NCCC case, the county is suing the construction company’s insurer, hoping to force it to cover most of the damage award.

The county also is appealing the verdict itself, after State Supreme Court Justice Ralph A. Boniello III said in a Feb. 23 ruling that he saw no reason to change the damage tab he imposed in January 2015, after a nonjury trial, in favor of the construction worker, Michael Lombardo, now 54, of Somerset.

Lombardo, working for TGR Enterprises of West Seneca, was hurt May 27, 2008. He was standing up in a flatbed truck on which four of the heavy windows were riding, unsecured, as they were hauled from a staging area to the NCCC Student Center for installation.

At least four of the windows shifted and landed on his lower right leg, breaking both bones in the leg and twisting his foot, which had to be surgically repositioned.

A metal rod was installed in the leg, and Boniello wrote in his original decision that Lombardo’s doctor had prescribed a course of painkillers that cost $120,000 a year.

In this case, the county was done in by New York’s Labor Law, which makes the property owner liable for injuries to construction workers on his property.

“Those protections are expansive because construction work is dangerous,” said Thomas H. Burton, Lombardo’s attorney. “The accident that severely injured Mr. Lombardo is a classic example of that, and we believe the judge got it right. As a result, a failure to settle the claim has now resulted in a very large exposure to the county.”

The county argued unsuccessfully before Boniello that the roadway on which the accident occurred wasn’t part of the job site, and that the fall of the windows, which measured 4 by 8 feet or 4 by 12 feet, was Lombardo’s own fault.

Boniello, who had Joerg’s current job as county attorney before going on the bench, didn’t buy it. He said the driveway was part of the job site because NCCC decided where the staging area would be.

The county has about $2 million in insurance money ready to pay Lombardo, but the county is suing Liberty Mutual Insurance and some of its subsidiaries in U.S. District Court for refusing to pay another $5 million.

Burton said interest on the damages to Lombardo is supposed to be 9 percent per year, although Joerg said that’s not automatic in a lawsuit against a municipality. Boniello didn’t mention an interest rate in his rulings, but if it is 9 percent, it means the amount owed Lombardo has already topped $7.9 million and will rise by $652,500 a year until the case is settled.

“If the $5 million in coverage comes in, which I hope it will, Mr. Burton will find a way to settle the case,” Joerg predicted.

Boniello is going to allow the county to have a hearing before him on the question of trying to reduce the damage tab by finding “offsets,” which are exceptions to the damage assessments. Boniello tallied Lombardo’s damages as $3.25 million for expected future medical expenses, $2 million for future pain and suffering, $1 million for past pain and suffering, $700,000 for future economic loss and $300,000 for past economic loss.

“The county is self-funded for general liability,” Pitarresi said. “We deal with those issues as they come up and we have to pay them.”

She said the liability fund contains about $3 million right now. “The county has done very well being self-funded and controlling claims,” Pitarresi contended.

But that was before Lombardo’s leg was crushed. And if a smashed leg is worth $7.25 million, what’s a life worth?

The Bissell case

The life in question is that of Glenn T. Annalora, 61, of Ridge Road, Newfane, who was killed Oct. 17 when his sport utility vehicle was T-boned at Ridge and Plank roads in Cambria by the Sheriff’s Office patrol car of Deputy James H. Bissell III. Annalora’s vehicle was on Ridge Road, where traffic does not have to stop at that intersection.

After an investigation, Bissell, who had been on the job for about a month, was charged with reckless driving, imprudent speed, running a stop sign and failure to yield. Bissell, who has pleaded not guilty, resigned from the Sheriff’s Office two months after the wreck.

Annalora’s widow, Mary A. Annalora, 58, who also was injured in the crash, promptly filed a notice of claim against the county.

Her attorney, Terrence M. Connors, told The Buffalo News in January, “Our investigation has revealed that his driving that evening was reckless, and it looks like the District Attorney’s Office agrees with us.”

He added that the charges against Bissell “are enormously helpful to the civil litigation, because he was obviously at fault.”

Residents who live near the intersection where the crash occurred said they didn’t hear any police sirens before impact.

Given the allegations – a deputy speeding and passing a stop sign while seemingly not on the way to any particular call – the questions may turn out to be how much the county pays Mary Annalora, and where it will find the money.