Peninsula Airport Commission reaches $300,000 settlement with former executive director in defamation case

April 11-- Apr. 11--The Peninsula Airport Commission's insurance firm has agreed to pay $300,000 to settle a defamation lawsuit by the past head of the Newport News/Williamsburg International Airport.

The agreement with former executive director Ken Spirito came during a court-ordered settlement conference on Tuesday, airport executive director Mike Giardino said.

The deal -- to be voted on by airport commissioners Thursday -- came a week before a jury trial was expected to begin in U.S. District Court in Newport News. The deal came six days after U.S. District Judge Henry Coke Morgan Jr. issued a key ruling in which he tossed part of Spirito's case but allowed much of it to proceed to trial.

Giardino said the six-member Peninsula Airport Commission will meet Thursday morning to vote on the agreement. "This ... settlement agreement shall be subject to the adoption of a public resolution of the (airport commission) approving the transaction," said a memorandum outlining the settlement terms.

Under the deal, Spirito agrees to give up "any and all claims" against the airport, while the airport also gives up all future claims -- "known and unknown" -- against its former executive. The $300,000 must be paid within five days.

In his lawsuit, Spirito had contended that airport employees and a commission member had defamed his character over his shredding of documents at the airport in early 2017. At the time of the shredding, the state's Department of Transportation was conducting an investigation into the airport.

Spirito said the documents he was shredding had nothing to do with the state's investigation -- and that texts between employees gave a false implication of impropriety. He said he was simply shredding "old, duplicate airline presentations" on one occasion, and that another allegation of shredding was simply made up.

Tuesday's settlement conference -- with U.S. Magistrate Judge Robert J. Krask presiding -- led to a deal between Spirito, the airport's insurance carrier, Chubb Insurance, and lawyers from both sides. Giardino and airport lawyers also attended.

"It wasn't the call of the (airport commission) -- it was the insurer's call," Giardino said of the deal. "We have insurance for a reason, and this is how it went. ... People do risk assessments, and that's what insurance companies do."

As for the airport, Giardino said, "More of our concern is that we're past this and moving forward."

Even though the money for the settlement is coming from insurance, Giardino said attorneys agreed that it made sense -- for the sake of public transparency -- that commissioners vote on the deal.

"Instead of just saying, 'The insurance company took care of it,' and it goes in the file, the consensus was that it would be a good act to publicly endorse it," he said.

Spirito's attorney, David L. Littel of Virginia Beach, declined an immediate comment, saying he would speak about the suit Thursday.

Spirito -- who led the airport for seven years before being fired in May 2017 -- could not immediately be reached.

The former executive initially filed a defamation lawsuit against the airport commission and the employees in Williamsburg/James City County Circuit Court in early 2018. But a Williamsburg judge tossed the case, saying in part that the defendants did not act with "reckless disregard" for the truth, a crucial part of defaming a public official.

Spirito's lawyer took the case to federal court, contending that the implication that he was doing something wrong destroyed his aviation career and "shattered" his reputation.

Named as defendants were the Peninsula Airport Commission, the Daily Press, airport accounting specialist Lisa M. Ortiz, airport finance and administration director E. Renee Ford, former airport supervising janitor Wilmer K. Thomas Jr., Newport News City Councilwoman -- and airport commissioner -- Sharon P. Scott.

Morgan tossed the case against the Daily Press earlier this year, granting a motion from the newspaper's lawyers that the paper accurately reported on the findings of a state audit report. The judge dismissed all of the individual defendants on March 19, leaving the Peninsula Airport Commission as the only defendant until the settlement.

Peter Dujardin, 757-247-4749, pdujardin@dailypress.com

UPDATES:

This story was updated from its earlier version with additional details.

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