BY GREGORY A. HALL
The Cincinnati Enquirer
LOUISVILLE -- Kenton County is planning to sue its former insurer over being denied coverage for an $850,000 settlement with two losing bidders on construction projects.
A claims supervisor for the county's former insurer, the Kentucky Association of Counties' All Lines Fund, said Wednesday that he doesn't recall what actions by county officials led to the denial of coverage.
The deposition by the administrator, Tom Rose, is part of an existing lawsuit in which the county is suing Corporex Cos. and Chairman Bill Butler, the builder of a new courthouse and parking garage. That suit seeks to recoup the $850,000 settlement paid to losing bidders, Wessels Construction and Development Corp. and Carroll Properties.
Wessels and Carroll claimed Corporex had an upper hand in winning the $35.6 million contracts. The county accuses Mr. Butler of manipulating the process in his company's favor.
Corporex denies any wrongdoing and believes the county wrongly entered into the settlement. Company officials believe the lawsuit against Corporex is being pursued by politicians who are trying to cover their own mistakes.
County Attorney Garry Edmondson said the new lawsuit will provide a second avenue to try to recover the $850,000 of taxpayers' money. Mr. Rose is claims supervisor for Willis Corroon in Louisville. The company administers insurance plans for self-insured groups. Kenton County was a member of the All Lines Fund, a Willis Corroon client, until August 1996.
When asked by attorneys on both sides of the case, Mr. Rose couldn't recall what actions by which officials constituted the intentional acts on which the denial was based.
"I think the (lawsuit) complaint spelled out the story of what happened here," he said.
He said he did not determine which county official or which regulations were violated. However, he said the Lexington law firm of Gess Mattingly & Atchison, which represents the KACo insurance fund, wrote a legal opinion on the county's claim.
That opinion was not released because of attorney-client privilege.
A March 25 letter from Mr. Rose denying coverage refers to the settlement agreement with the two losing bidders from February, in which the county admitted wrongdoing.
" . . . Kenton County . . . awarded a construction contract to Corporex Companies Inc. after the amounts of the competing bids of Wessels and Carroll had been divulged to representatives of Corporex Inc. in violation of the applicable statutes and regulations," the letter states. "These actions, if true, would constitute illegal and intentional acts on the part of Kenton County and would indicate that the Kenton County was not acting in good faith." Based on that, coverage was denied.
All Lines Fund attorney Robert Maclin II declined to elaborate. The disclosure apparently refers to then Judge-executive Clyde Middleton providing copies of competitors' bids to Mr. Butler on April 2, 1996, the night they were opened.
