As its members work through several issues tied to a lawsuit filed by six people wrongfully convicted of a 1985 Beatrice murder, the Gage County Board of Supervisors on Wednesday signed contracts with three law firms to provide ongoing legal services.
One of them, Lincoln-based Woods & Aitken, offers legal services, including for Chapter 9 bankruptcy, which is reserved for government entities, among its other practices.
The county appears to be preparing itself for several scenarios -- including bankruptcy -- as the 8th Circuit Court of Appeals considers a motion to stay execution of an estimated $30 million federal judgment and attorneys’ fees awarded to the so-called Beatrice 6 in July.
Gage County was hit with the judgment at the end of a seven-year legal battle after the six sued the county, Deputy Sheriff Burdette Searcey and Reserve Deputy Wayne Price for violating their civil rights in a cold-case investigation of the rape and beating death of 68-year-old Helen Wilson.
Joseph White, Ada JoAnn Taylor, James Dean, Thomas Winslow, Kathleen Gonzalez and Debra Shelden spent a combined 75 years in prison before they were exonerated by the state after DNA evidence showed a seventh person committed the crime.
On Wednesday, Gage County asked the 8th Circuit to delay execution of the judgment, saying it far exceeds the $18.4 million the county spent on governmental operations last year.
U.S. District Court Judge Richard G. Kopf denied a similar request from the county last month.
The judgment is far beyond the available tax levy the county could set under state law, private-practice attorney Jennifer Tomka wrote on behalf of the county Wednesday.
The county’s current and former insurance carriers have denied coverage in the case, and Nebraska Attorney General Doug Peterson said last week there was no remedy available to the county through a loan program offered by the State Treasurer.
Staying execution of the judgment, Tomka wrote, would maintain the county’s status quo while the court considers the case, particularly after two companies -- Travelers Insurance Co. and Nationwide insurance -- told the county they could not provide the bond guaranteeing payment should the 8th Circuit side on behalf of the six.
“The county has provided evidence that it is unable to obtain a supersedeas bond and that execution of the judgment will likely cause it to become insolvent,” she wrote.
Furthermore, Tomka said, the county “has diligently looked, and continues to diligently look, for avenues to satisfy any judgment that survives appeal."
“Nonetheless, given the county’s current financial status and the lack of immediately available mechanisms for raising funds, allowing immediate execution of the judgment creates serious risk that the county will be forced to enter bankruptcy before the county even has an opportunity to pursue its rights on appeal,” she wrote.
Applying for Chapter 9 bankruptcy “would cause serious harm to the taxpayers of Gage County, as well as the county’s other creditors,” and would not be reversible if the 8th Circuit rules in the county’s favor, Tomka added.
County Attorney Roger Harris said the appeal process is the county's priority at this point, but it is looking at other options, too.
"Those options require our attorneys to have specialties and expertise our legal team doesn't have at this juncture," he said. "You can't wait until the last minute to do these things, so we are taking some steps to protect the rights of the taxpayers."
The county also asked attorneys Melanie Whittamore-Mantzios and Elizabeth Ryan Cano, who practice with Wolfe, Snowden, Hurd, Luers & AHL, to continue working as part of its team of private-practice attorneys.
And the County Board asked Keating O’Gara Law Firm of Lincoln to continue providing legal counsel related to the county’s insurance history dating back to 1989.
Attorneys Joel Bacon and Joel Nelson said in September their investigation shows it’s likely the county had liability insurance -- either from the Nebraska Intergovernmental Risk Management Association or Employers Mutual Casualty Cos. -- during three critical periods in the cold-case investigation, as well as when the six were exonerated.
On advice from the insurance attorneys, Gage County asked both to reconsider the denials of coverage they gave the county in 2009. The risk-sharing pool and the private insurer responded to the county’s request, but the responses have not been made public.
The county could ask a Nebraska district court judge to interpret the insurance policy and issue a declaratory judgment, although Tomka noted in her motion to the 8th Circuit that any coverage would be capped well below the judgment amount.
Chairman Myron Dorn said Bacon and Nelson “completed the original scope of the study,” and the county plans to look more at options pertaining to its liability insurance coverage dating back to the investigation and prosecution of the six.
“We’re slowly working through different stages and starting to discuss the options out there and explore everything we can,” Dorn said.