Luzerne County Government

July 9, 2010

Philly law firm wants $205,000 from county

The money is legal fees from a 2003 suit against the county controller.

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
Jennifer Learn-Andes on Facebook   |   @TLJenLearnAndes on Twitter

A Philadelphia law firm has asked the Luzerne County Retirement Board to consider paying $205,695 in legal fees stemming from a 2003 defamation suit against former county controller Steve Flood.

The Schnader, Harrison, Segal & Lewis firm said in a June 25 letter to the board that the fees are owed for the firm’s representation of Flood in a libel suit filed by former county pension fund money manager ASCO Financial Group Inc. and its president Donald Williamson over statements made by Flood on a November 2002 radio program.

The board had initially voted to pay for Flood’s defense but reversed the decision shortly after Flood was defeated in the November 2005 election, the letter says. The firm continued representing Flood through Feb. 2, 2008, incurring $205,695 in legal fees, the letter said.

The Schnader firm submitted its invoices to Flood, but he did not pay them and told the firm that he would continue pursuing his claim that the county should be covering the expense, the letter said.

Flood suffered a debilitating stroke in March 2007.

In January, the Schnader firm filed a notice of intent to sue against Flood’s guardian, Heather Paulhamus, to prevent the statute of limitations from expiring on its claim for unpaid fees and costs, the letter said.

Before filing a complaint against Flood’s guardian, the Schnader firm wanted to determine whether board members want to reconsider the decision not to pay the bills, the letter said.

If the board continues to refuse to pay, the firm will “have no choice” but to file a complaint against Flood, the letter says. Paulhamus may then seek to enjoin the county in the legal action in order to obtain payment from the county, the letter says.

The firm is willing to meet with the board in executive session to discuss the issues and a “mutually acceptable resolution of our fees,” the letter says.

The county controller, commissioners and treasurer sit on the board that oversees the employee pension fund. Board members say the matter will be discussed at their next meeting, which is scheduled at 2 p.m. on Aug. 2.

The libel case is still pending in court. Depositions had been scheduled in recent weeks but were cancelled and not rescheduled.

The suit alleges that Flood made false and defamatory statements about Williamson and ASCO during a Nov. 13, 2002, interview on a talk radio show hosted by Kevin Lynn on WILK radio.

ASCO Financial and Williamson were among several county retirement fund money managers fired by Flood and other retirement board members in September 2002 as part of the fund’s reorganization.

Flood had maintained that his comments were justified and that the county should provide representation because he was speaking as retirement board secretary on the radio show.

The Schnader firm also represented the board in a 2003 racketeering suit filed against past county officials and pension fund managers. A federal judge dismissed that suit in November 2007.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.

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