Former City of Sunnyside Finance Director Bud Schatz has officially laid the foundation to seek damages for his dismissal by City Manager Bob Stockwell earlier this year.
Schatz formally filed a lawsuit against the city, which also names Stockwell and his wife, Susan, in Yakima County Superior Court at the beginning of July.
Schatz was fired in March after more than 20 years guiding the City of Sunnyside's finances. Schatz was dismissed for allegedly providing Stockwell with false figures in regards to privatization of the wastewater treatment plant.
The incident that eventually led to Schatz's firing stems from the City Council exploring the idea of privatizing water and wastewater services. Schatz was fired after it was discovered the city would only save $23,810 annually instead of $289,851 by privatizing wastewater services. Schatz was blamed for the misrepresented figures that were presented to Council.
"It is my opinion that the Schatz lawsuit is without merit," said Stockwell. "The complaint is based upon erroneous conclusions apparently being drawn by Schatz and his attorney."
Schatz is represented by the Wenatchee law firm of Ogden, Murphy and Wallace.
Stockwell said the city purchases liability insurance to protect against lawsuits and damages. Stockwell couldn't elaborate on the lawsuit as the city's insurance company will be dealing with the issue.
"They dictate what can and cannot be said," said Stockwell. "So while it would be interesting for the citizens to hear both sides of the issue we are not able to present any detailed responses to the complaint filed by Schatz."
Stockwell did say the city attempted to deal fairly with Schatz in terminating his employment.
"We will respond to the lawsuit aggressively and in the best interest of the citizens we serve," said Stockwell. "I find it particularly disturbing that Mr. Schatz has seen fit to draw my wife and our personal assets into this lawsuit. All of my actions were in my role as the city manager of Sunnyside and in furtherance of doing what is best for the city. To seek damages against me personally and to include my wife is malicious and vindictive."
Schatz had no comment on the case, referring any matters to his attorney, Brian Walker.
"It is still early," said Walker of the case.
Walker said the city and Stockwell have 20 days to respond to Schatz's claim. After that, both sides will go through a period of discovery.
"It is hard to tell how long discovery will take," said Walker.
After the discovery period, the parties involved can reach a settlement or the case could head to trial.
Walker said it is conceivable that the city could settle and Stockwell might not since the case involves two separate parties. Walker said it is very common to have a lawsuit such as this naming two separate parties.
Right now, the damages Schatz is seeking haven't been totaled yet. Walker said there will be a point in the case where Schatz will have to reveal how much he is seeking.
Walker wouldn't comment on whether he feels optimistic about the merits of the case, but did offer this.
"We wouldn't be involved if we didn't think Mr. Schatz had a strong case," said Walker.
The lawsuit details that Schatz names Stockwell and his wife as defendants because he believes the city manager was not only acting in an official capacity as an employee for the city of Sunnyside, but was benefiting himself and his family as well through his actions.
Schatz's lawsuit alleges the city didn't follow the official guidelines for terminating his employment.
The lawsuit alleges the city manager placed himself in charge of evaluating the pros and cons of the proposed privatization of the water and wastewater facilities, which included analyzing the financial impact of such a move. The lawsuit further alleges it was Stockwell who miscalculated the proposed savings.
The lawsuit also alleges Stockwell never asked Schatz to review the city manager's financial figures concerning the privatization of water and sewer services. The lawsuit contends Schatz didn't learn of Stockwell's supposed miscalculation until around Feb. 28, a few days prior to a special Saturday Council meeting, where the miscalculation was revealed.
The lawsuit further alleges Schatz notified Stockwell of the miscalculations on March 2. The following day, March 3, Stockwell terminated Schatz's employment, the lawsuit states. The lawsuit also details how on March 3, Stockwell advised Schatz he was an at-will employee and the city manager could terminate him for any reason.
The lawsuit also states Schatz was not provided with a pre-disciplinary hearing or notice that he was entitled to under the city's administrative procedures. The lawsuit also alleges that for a number of days after Schatz's termination, Stockwell attempted to pressure the former finance director into signing a severance and release agreement.
The lawsuit also states how at the special Saturday meeting of the City Council, where the mistaken cost figures were revealed, Stockwell publicly blamed Schatz for the mistaken figures.
The lawsuit also claims the city changed its stance on why Schatz was terminated.
In his lawsuit, Schatz further contends..."in an effort to sanitize its failure to provide Schatz with the advance notice and pre-disciplinary hearing Schatz was entitled, on March 29, 2005, the city and Stockwell scheduled Schatz for an alleged pre-disciplinary hearing to occur on April 7, 2005."
Filed with the lawsuit was a copy of the severance agreement Stockwell supposedly offered Schatz upon termination.
The alleged agreement, which the former finance director said he never signed, states that Schatz resigned his position with the city. As part of the compensation package in the agreement provided by Schatz, the city offered him a set amount of hours of vacation, sick and executive leave. The agreement also offered Schatz four months of his salary if he agreed to train the interim finance director.