Insurance to cover most of the district's lawsuit costs

When the Red Wing School District settled the civil lawsuit brought against it last month, it agreed to pay former student Quera Pruitt $90,000. However, none of that money will come from school district funds.

Instead, the entire settlement — as well as the fees for the district’s attorney, Morgan Godfrey — will be covered by the district’s insurance company, the Netherlands Insurance Co., Supt. Karsten Anderson said.

Bob Lowe, director of management services for the Minnesota School Boards Association, said an insurance company footing the entire bill for a lawsuit isn’t unheard-of.

“It’s not terribly uncommon, (but) it certainly isn’t what happens in every case,” he said, noting that the MSBA does not formally track or record data about lawsuits brought against school districts.

Last month, Godfrey declined to comment on whether the Netherlands Insurance Co. had any say in the settlement. However, speaking generally, Lowe said insurance companies are often part of the settlement discussion.

“In my experience, most often insurance agents and administrations sit down and discuss the final settlements and what can be paid and whom,” Lowe said.

With the insurance company covering the settlement and attorney fees, the district’s only cost would have been its annual $1,000 insurance deductible. However, district Finance Director Brad Johnson said that had already been met when a district vehicle was damaged earlier in the year.

Still, the district will be responsible for the fees for two additional lawyers who were brought in over the course of the proceedings. The district will pay attorney liability insurance expert Jenneane Jansen, of Jansen and Palmer, $1,460 for her services. They will also owe Tim Palmatier, who is the district’s general attorney, between $1,000 and $2,000 for his services during the lawsuit.

Pruitt originally filed the lawsuit in federal court July 2011, stating that her civil rights were violated when about 60 students came to school during homecoming week in 2009 dressed in stereotypical black or gangster clothing. Pruitt said in her original complaint that the district knew that students typically dress this way on the Wednesday of the Wingers’ homecoming week, but did nothing to stop it.

The Red Wing School Board voted in favor of settling the suit out of court July 11. U.S. District Court Judge David Doty accepted the settlement July 31.

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