Lakeway MUD chief was defamed by board member, jury decides
A Travis County jury awarded $91,000 in damages to the head of the Lakeway Municipal Utility District, finding that a district board member maliciously spread a pair of false statements that defamed him.
The jury found that board member Kay Andrews did not act in good faith or within the scope of her authority when she stated that General Manager Richard Eason “gives himself raises” and that he was taking kickbacks from an irrigation auditor, according to court documents.
“I feel vindicated,” Eason said of the jury’s verdict, issued June 25. “The statements make people question my integrity. … This was always about restoring my reputation.”
The jury did not agree that Andrews made two other false statements about Eason.
“It’s significant that the jury rejected two of those claims,” Andrews’ lawyer, Joanna Salinas, said. Andrews declined to comment.
The jury awarded Eason $20,000 for loss of reputation and $70,000 for mental anguish, as well as $1,000 in punitive damages.
Salinas said both a homeowners insurance carrier and the Texas Municipal League Intergovernmental Risk Pool are currently determining whether and how much of the jury award is covered by their policies.
Board President Karl Ans- bach said he anticipates that the district will pay a $2,500 deductible with the Texas Municipal League policy.
A judge has yet to enter a judgment on the case.
Eason submitted a resignation letter June 18 that was conditioned on a severance agreement, Ansbach said. The agreement includes a monetary amount to be decided by the board, he said.
Eason’s contract allows him to resign his position with 30 days’ notice, but with no severance compensation. Ansbach said the resignation letter is under review by a lawyer hired by the district.
Aside from the $2,500 deductible and possible severance, the district will pay legal fees, Ansbach said. “I do not antici- pate that our customers will experience any rate increases associated with these issues,” he said in a news release.
Ansbach said Eason has accepted employment with a government entity in the Cayman Islands.
The district, which has 21 employees, owns and operates one water plant, two booster pump stations, three water towers, 70 miles of water lines, 39 miles of wastewater collection lines with 21 pumping stations, two wastewater recycling plants and a water recycling system, according to Eason.
Eason has served as the district’s general manager for 17 years, and the district recently won an award for budget and financial transparency from the Texas comptroller’s office.
Andrews has been a board member since May 2004 and currently serves as the board’s secretary/treasurer. Her term expires May 2012, the district’s website says.
The lawsuit said the board did not authorize Andrews to make the statements and requested that Andrews stop defaming Eason. In addition, the suit said the board found that Andrews violated her duties and responsibilities as a board member.
Former board President Tom Rogers said previously that the board took those actions. He called Andrews’ statements “unsupported.”