Jan. 15—A three-year effort by a nonprofit municipal utility cooperative to force its liability insurance company to pay "staggering" legal defense costs topping
The five former CMEEC officials were indicted on charges of conspiracy and theft from a program receiving federal funds for their leadership roles in planning lavish trips to the
The dispute is ongoing but in late December the
CMEEC General Counsel
CMEEC attorneys now seek an emergency ruling by the court to force the insurance company to pay ongoing legal costs, including advancement of legal costs to come in the criminal proceedings.
Following a monthlong criminal trial in November and early December, a jury on
Former CMEEC CFO
Rankin and Sullivan face a second criminal indictment on theft charges for alleged CMEEC reimbursement to Sullivan for nearly
Since the 2018 indictments, the insurance company had denied the cooperative's repeated requests for payment for the legal defense costs. CMEEC filed a federal civil suit against the insurance company for the following demands:
— legal defense coverage
—CMEEC's costs, now totaling
— costs in a separate federal civil suit filed by Pryor against CMEEC after the indictment to seek legal costs under CMEEC's bylaws that indemnified cooperative officials in allegations of wrongdoing.
Pryor's civil case was put on hold after CMEEC agreed to advance legal costs, with a stipulation that it could challenge the agreement in the future.
That did not end the dispute. Two weeks into the criminal trial, with no payment made, CMEEC attorney
"Costs associated with the ongoing defense of the federal indictments are staggering and increasing daily," McCormack argued. He wrote that CMEEC should not be required "to shoulder the continued financial burden for the Defense Costs of the indictments, which it has been forced to do since
The company also argued that CMEEC was asking for payment before the trials were concluded, citing "criminal exclusion" of coverage if parties ultimately were found guilty. CMEEC attorney
No ruling has been filed on CMEEC's request for an emergency claim, but on
CMEEC responded two days later, calling it an "arbitrary" partial payment, repeating a call for advanced payments for the ongoing legal costs. CMEEC argued that the back-due payments, plus interest, would be part of a damages claim "to be calculated at trial."
A settlement conference is scheduled for
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