Pension board agrees to let councilman pursue double pension suit

Oct. 27--Scranton's nonuniform pension board agreed to let a city councilman and former clerical worker sue insurance companies to try to recoup about $3 million in double pension benefits improperly paid to certain retirees.

The board said Wednesday it would assign its right to file a lawsuit to Councilman Patrick Rogan and Angela Sulla. In exchange, Rogan and Sulla will withdraw a 2017 lawsuit against the board.

The case stems from a 2002 retirement incentive that doubled the pensions of 35 retirees. The board learned in 2014 that the incentive was never properly approved.

The board halted the excess payments in March 2017 -- a decision that recently was upheld by a county judge. It opted not to seek to recoup money already paid to retirees, however.

In their lawsuit, Rogan and Sulla alleged the board was negligent in handling the 2002 incentive. It sought to recoup excess payments from the board, with the belief the payout would be covered by its errors and omissions insurance policy. Any money recovered would be deposited into the pension fund.

Larry Durkin, attorney for the pension board, sought to dismiss the lawsuit, arguing Rogan and Sulla did not have legal standing to bring the case.

Durkin said Thursday that he believes the board had a strong argument to dismiss the case. It agreed to settle the matter to avoid the cost of litigation.

The settlement frees Rogan and Sulla to file a lawsuit against insurance companies that provided coverage to the board between 2005 and 2017.

"This is a step in the right direction and gives us the opportunity to move forward to try to recoup funds that are due the pension fund," Rogan said Thursday.

It's unclear whether the lawsuit against the insurers will be successful.

In court papers, Durkin said two insurance companies already advised the board that exclusions within the policies would prevent it from recovering damages.

Michael Mey, attorney for Rogan and Sulla, disagrees.

"I believe there is coverage under the policies, otherwise I wouldn't be wasting everyone's time and effort," he said.

Mey said he is working on a stipulation to dismiss the lawsuit against the board. Once that's finalized he will pursue a separate action against the insurance companies.

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