Budget cuts are meant to save money, but staffing reductions in Ocean Shores may cost the city in a lawsuit. Misplaced paperwork led to a default judgment against the city totaling $750,000.
The city has already filed to have that judgment vacated, but it won’t know until a Nov. 5 hearing whether it will have the chance to argue the case or if it’s on the hook for the total judgment.
Judith M. Shaw has sued the city before over drainage on her property on Anchor Avenue, claiming road work by the city has caused flooding and damage to the home and property. The first lawsuit was dismissed, and the notice of a newly filed suit was delivered to City Clerk Diane Foss on Sept. 13. According to court filings, Foss contacted the city attorney and was told to forward the complaint to the city’s insurer, Washington Cities Insurance Authority.
“I inadvertently and mistakenly failed to do that,” Foss wrote in a statement to the court. “It was a purely unintentional oversight.”
She cited personal stress, including the premature birth of a grandchild and the strain of budget cuts on her office as contributing to the error.
“I, along with the other city employees, are trying to handle an ever-increasing work load with fewer people. Unfortunately, despite our best efforts, we made a mistake,” Foss wrote.
Attorney John E. Justice, who is representing the city in the lawsuit, declined to comment before the November hearing. He represented the city in the previous suit from Shaw.
Because the paperwork was misplaced, no response was filed and no one showed up to defend the city against the lawsuit, so Judge David Edwards entered a default judgment. In addition to the $750,000 for damages, the judgment includes $5,635 in attorney’s fees and $301 in court costs. The judgment has a 12 percent annual interest rate, so if the judgment stands, the fees could add up for the cash-strapped city.
The judgment was entered on Oct. 2, and notice was given to the court that the city was represented by Justice on Oct. 10. According to the city’s filings, it didn’t find out the case had gone to court until it was informed of the default judgment on Oct. 5.
One of Justice’s arguments in his filing to vacate the judgment is that because he represented the city in the previous suit, Shaw’s lawyer had no reason to think he would not be continuing to represent the city and should have served him with notice of the new suit, not just the city offices. He also cites a variety of cases that establish mistakes and “excusable neglect” as good cause to vacate a default judgment. Justice argues that Foss essentially made an honest mistake.
“The city is significantly shorthanded and the city clerk in particular was overwhelmed during this time period due to both the strains of work and a personal situation,” Justice wrote in his court filing.
Justice’s filing also argues the city has a good case against the claims made by Shaw, including a statement from a contractor who had done work for her previously citing poor drainage under the house as the cause of the property’s flooding, not any drainage the city changed.