Serving Gogebic, Iron and Ontonagon Counties
Serving Gogebic, Iron and Ontonagon Counties
By RICHARD JENKINS
Bessemer — The litigation filed by several local governmental entities seeking to force their insurance companies to cover the tax money lost in former township treasurer Jyl Olson-DeRosso's embezzlement will continue after a judge ruled there wasn't enough evidence for a summary disposition last week in Gogebic County Circuit Court.
Ontonagon County District Judge Janis Burgess, who is hearing the case, ruled against granting the plaintiffs' request for summary disposition as she found there were enough issues that needed to be resolved in the case for it to proceed.
“I think the first question in the case is subject to dispute, and that is (are these bonds regulated under a certain state law)? If they are, then we move onto a legal interpretation; but if they are not, then what are they and what were the intentions of the parties when these bonds were obtained? And intent is a question of fact that has not been presented to the court for review today,” Burgess said. “So I believe the defendants are correct in stating summary disposition under (the applicable law) is premature.”
She noted the facts may still come out in favor of the plaintiffs, but this would be determined at a later date.
The case features five plaintiffs — listed in court documents as Gogebic County, Gogebic County Treasurer Lisa Hewitt, Ironwood Township, the Ironwood Area Schools and the Gogebic-Ontonagon Intermediate School District — seeking over $1.4 million in damages from The Michigan Township Participating Plan and U.S. Specialty Insurance Company.
The plaintiffs argue the defendants provided seven bonds between the 2013 and 2016 to secure DeRosso’s collection and payment of tax money and the performance of her duties, which she failed to do by embezzling funds.
Olson-DeRosso pleaded guilty or no contest to all 10 counts she was charged with in March 2018. The charges against her stem from 2011 to November 2016, when Olson-DeRosso lost her re-election bid to current treasurer Maria Graser.
Prior to Burgess' ruling, lawyers from both sides addressed the court regarding their respective positions on the motions.
Thomas Keranen, with the Detroit-based law firm Clark Hill, and Ironwood Township attorney Mark McDonald argued any language in the bonds excluding them from covering the embezzlement situation wasn't applicable as it conflicted with state law the plaintiffs said applies in the case.
“If we have a statutory bond, and the bond itself is at variance with the statute, the statute establishes the minimums the bond is required to have or provide,” Keranen said. “The statutory requirements are the floor, not the ceiling, for the bond.”
Although the sides appear to dispute whether the bonds in question were statutory bonds, Keranen argued they clearly were as they were tax bonds and required by law.
Further he said the relevant state laws required protection that the treasurer faithfully perform her duties, and embezzling funds was clearly a failure of those duties.
Clinton Cameron, who represents the defendants, countered that the plaintiffs are asking the court to ignore the language of the bonds and rewrite the documents in their favor.
“What we have is some bonds that have been issued to a township, covering the township for certain things,” Cameron said. He said there are two types of bonds, and argued the township had other bonds to protect themselves if Olson-DeRosso failed to faithfully perform her duties, but that the bonds in question were written to protect against a different scenario than the embezzlement.
He said it was too early in the litigation process to determine whether the law cited by the plaintiffs actually applied in the case. He also said local officials had opportunities to review the language and if there were issues they could have been raised at the time the bonds were taken out.
Whether this happened and what various parties believed regarding the coverage provided by the bonds were part of the discovery process in the case, Cameron told the court, which hadn't even started yet — meaning a summary ruling was premature in his view.
“(Motions for summary disposition) generally come at the end of a case. In this case, we have the plaintiffs seeking to stop this case before it begins,” Cameron said.
Along with ruling on the motion, Burgess set a scheduling conference for Tuesday to determine how the case will proceed and encouraged both sides to consider mediation or other method of resolving the case without requiring a trial.
