Lawsuit, a bankruptcy asset, purchased by school, dismissed

Buying a lawsuit, then dismissing it, does not give the claimant a win, Marshall Ney, attorney, told School Board members in a special meeting Wednesday, Jan. 8. After listening to Ney’s case and explanation, board members unanimously agreed to authorize superintendent Rick Neal to authorize Ney to buy the lawsuit filed by former teacher Teresa Nida.

Nida was terminated, had a termination hearing Jan. 14, 2019, and appealed the termination. She also filed an Equal Employment Opportunity Commission.

She also filed a lawsuit against the School District and against superintendent Rick Neal claiming her civil rights were violated. She also filed bankruptcy.

Ney said the bankruptcy trustee asked whether the school district wanted to buy the suit which has been determined to be an asset of the bankruptcy estate.

“It was the EEOC’s determination that there was not discrimination by the district,” Ney told the board. “Defending the lawsuit and the EEOC charge are all the same claim by Mrs. Nida.”

“This isn’t really a settlement, although the result would be the same,” Ney said.

Ney explained that the school district’s insurance carrier requested the settlement to reduce the cost to the district. The insurance has a $10,000 deductible, about $7,000 of which has been spent on this case already, Ney explained. He said there would only be $2,800 out of pocket by the district.

“The insurance carrier has a strong desire to pay… so the cost to the district to participate and approve the purchase of the lawsuit is difference in what has already been spent and the deductible — $2,800,” Ney explained. “The insurance company would fund the rest and none of the money would fund Mrs. Nida. It would go into bankruptcy estate to satisfy creditors.”

Ney said Nida claimed to have disabilities, but had not informed the district of those disabilities.

“She says she was discriminated against and has disability for which the school did not accommodate her,” Ney said, but said Nida concedes the district did not know about her condition. “Under the law, the burden rests on the employee, not employer.”

“I believe there is zero merit to her lawsuit,” Ney said. “The insurance company who provides your coverage, while they typically gives me latitude … they don’t like litigation and they don’t like legal fees. They view it as a nuisance. They’re prepared to go forward and pay, to take control of it if the district will pay the remaining.”

“You have an opportunity to take control of this and remove the distraction. That’s the reason we’re here today,” Ney said, also telling board members the superintendent had the authority to approve the payment, but he recommended setting the matter before the entire board.

“What kind of verdict does it give the case?” asked board member Sandy Button, who is also the city’s court clerk.

“As owner of her claims, we would dismiss it.

“It is not a win for her. She will get nothing, her creditors will get it,” Ney answered.

Board member Jenny Wood asked whether Nida could outbid the district and was told she already said she couldn’t buy it.

Board member Mindy Cawthon asked how this route was less expensive and Ney explained that to continue the lawsuit, regardless of the eventual outcome, would be costly in legal fees.

Ney said Nida’s attorneys “will appear and will aggressively fight against this happening. They have filed objections against us buying it.”

On Thursday, Jan. 9, Ney appeared before the judge. Nida’s attorney, George Rozell, did not. The case was dismissed.