Most of the City of Detroit lawsuits allege motor vehicle or pedestrian collisions and include the Department of Transportation. (Shutterstock photo)

When the City of Detroit is sued for allegations of wrongdoing, the City Council has the power to approve or deny the use of public money to pay settlements. Usually, Council follows the advice of the City’s legal department, but last week, it chose otherwise. 

Detroit City Council voted 5-3 last week to deny a payment previously agreed upon between the City’s corporation counsel and a plaintiff’s lawyer. The council’s split decision on whether to settle or push for a trial could be a gamble with taxpayer dollars in certain council members’ push not to back down on frivolous lawsuits. Of the nine settlements discussed during the meeting, just one payment was denied by council. The discussed settlement payouts ranged from $7,000 to $120,000, including one undisclosed amount. 

Though the contents of the settlements remain confidential, Detroit has seen an increase in lawsuits this past year. Most of the lawsuits include the Department of Transportation and the Detroit Police Department, and allege motor vehicle or pedestrian collisions and violations of civil or constitutional rights.

Should the City be found not at fault during trial, no payment is required. However, City officials told BridgeDetroit the cost of losing during trial could be anything from “zero to $30 million.”

However, some council members say some cases do not merit a settlement and wanted to pursue a trial.

As a City fiduciary, Councilman Roy McCalister believes the body is obliged to “act responsibly when considering lawsuits seeking damages from municipal coffers.”

“I find it distressing to see so many lawsuits leveled at the City, which are often of varying degrees of merit. I know the hard work Corporation Counsel (Lawrence) Garcia and his team at the Law Department puts in to (sic) limit the financial impact of these lawsuits,” McCalister said in an e-mail to BridgeDetroit.

McCalister also said he and his colleagues work hard to consider every case and usually follow the Law Department’s advice. But this week, he disagreed.

“On rare occasions we come to a different conclusion regarding the necessity of the City to settle and vote, as we did Tuesday, not to approve a settlement,” the councilman wrote.

In fiscal year 2019-20, there were 485 cases brought against the City with 336 resulting in no-fault agreements and 104 in settlements totaling $2.7 million. The city owed $46.9 million in indemnity reserves and made $1.9 in indemnity payments to parties that sued the City for losses or damages. There are 45 cases that remain open. Of the 485 cases, 313 involved the Department of Transportation and 75 cases involved the Police Department.

In the current fiscal year — which runs July 1, 2020, to June 30, 2021 — the City has received 776 new cases and settled 37 as of Wednesday. Those settlements have cost the city about $330,000. About $93,000 were indemnity payments. Of those cases, 523 involved the Department of Transportation, and 118 involved the Police Department. Over 500 cases were found at no fault of the City.

President Pro Tem Mary Sheffied’s office is also concerned about the number of lawsuits and has asked, during the budget cycle, for the law office to look into the matter, said her chief of staff, Brian White. The office also requested training for police and DDOT to help reduce the City’s exposure and the loss of general fund dollars. 

Garcia, the City’s corporation counsel, said new legislation may have influenced the growing number of vehicular-related cases against the City.

Michigan’s Legislature approved and Gov. Gretchen Whitmer signed bipartisan amendments to the state’s insurance code in Public Act 21 and 22, in 2019. The amendments allow injured parties in auto collisions to sue for benefits.

“The recent glut of lawsuits against the City may reflect an attempt to assert claims before the new system takes effect,” a City spokesperson said in an e-mail to BridgeDetroit on Wednesday.

Garcia said he tries to reduce indemnities through conversations and work with department heads.

“It is a constant striving,” Garcia said.

Olivia Lewis is a reporter for BridgeDetroit. She was formerly a reporter for the Battle Creek Enquirer and the Indianapolis Star. She has also worked in philanthropy for the Kresge Foundation, the Council...

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