Village of Lynwood sued over $1.2 million in late insurance payments

Feb. 17--A municipal self-insurance association has filed suit against Lynwood, claiming the south suburb is more than $1 million behind on its annual risk management service fees.

The Illinois Municipal League Risk Management Association, a cooperative that provides insurance coverage to municipalities that pay into it, sued Lynwood over its failure to pay a judgment entered in August over two-plus years worth of overdue annual contributions.

The suit, filed Feb. 5 in Sangamon County Circuit Court, demands Lynwood "take necessary steps" to promptly pay the $1.18 million judgment, costs and interest, including, if necessary, tapping into any available village surplus or issuing general obligation bonds.

The IML Risk Management Association claims in the suit that it provided Lynwood risk management coverage and services from 2014 to 2016, as outlined in their contract, but that the village "failed and refused to pay" for them.

The association invoiced Lynwood for $501,160 in 2014, $521,347 in 2015 and $575,802 in 2016 for worker's compensation, auto, portable equipment and property insurances, but only received a fraction of the money it was owed, according to the suit.

On Aug. 21, the court entered a judgment against Lynwood for the full amount of the delinquent contributions, but to date, the village has not paid it off, and in fact owes slightly more now due to accrued interest, the suit claims.

Carl Draper, an attorney for the village, said Lynwood had been making "substantial" payments of $10,000 to the association every month in an effort to pay off what it owes.

He said it was unlikely the village would be able to pay down its debts any faster even if the association's lawsuit demands were met.

"The village has worked very hard with the (Risk Management Association) and it's unfortunate that we're in this posture, but the village is paying this debt off as quickly as it can," Draper said.

Lynwood Mayor Eugene Williams did not immediately respond to a request for comment on the suit.

zkoeske@tribpub.com

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