WEST WILDWOOD – A Superior Court judge has ruled that taxpayers of this tiny borough are on the hook for a $1 million-plus judgment in a suit filed by Police Chief Jacquelyn Ferentz.

Normally, a judgment of that magnitude would be covered by insurance, but in this case, the insurer argued that the municipality failed to cooperate in the defense against the suit.

Superior Court Judge James Pickering has agreed.

In an April 25 decision, Pickering essentially ruled that West Wildwood tied the hands of the attorneys defending against Ferentz’s whistleblower suit in a resolution that kept it from using anything from extensive disciplinary hearings under the prior administration.

That left one option available; to contend that the former mayor “did all the terrible things he did to Ferentz as a political retaliation” which would not be protected under the whistleblower laws, rather than because she filed critical reports with the Cape May County Prosecutor or with the state Attorney General’s office. The attorney could not challenge or cross-examine Ferentz, either.

“Council for WWW [West Wildwood] did the best he could with this defense, but there is not an attorney living, dying or dead who could win with that defense,” reads part of Pickering’s decision.

On July 21, 2017, a jury awarded Ferentz $1.165 million in damages in an action under the Conscientious Employee Protection Act, better known as whistleblower protection. In October, the court added attorney fees, costs and other charges bringing the tab to just under $1.77 million.

With the recent decision, that cost will fall to the taxpayers of West Wildwood, a significant burden in a borough with about 600 residents. Ferentz and her attorney, Michelle Douglass, have already agreed to a payment schedule with the borough, but local taxpayers will still feel the pinch. In anticipation of Pickering’s decision, the borough earlier this year began furloughing workers each Friday and increased the local tax rate in preparation for funding the payments.

West Wildwood is part of the Atlantic County Joint Insurance Fund (JIF), a group of towns and cities that have joined together for a more affordable insurance option. The JIF, in turn, looks to the Municipal Excess Liability Fund (MEL) to handle very large costs, like million-dollar whistleblower awards.

For about a year, David Grubb, the executive director of the MEL, has declined to comment on the matter, citing the ongoing lawsuit. Contacted May 11, Grubb continued that streak, again declining to comment.

“I think the decision says it all,” he said.

At the Joint Insurance Fund, questions about the decision were forwarded to attorney David DeWeese, who also declined to comment, saying Pickering’s decision covers the matter thoroughly.

The matter goes back about a decade to former West Wildwood Mayor Herbert Frederick. In 2008, Ferentz filed suit against the borough. As mayor, Frederick had accused Ferentz of several infractions and later dismissed her from the department, citing the findings of an extensive disciplinary hearing. Ferentz, in turn, accused the then-mayor of improperly interfering with the operations of the police department while she was acting chief.

Things changed when Chris Fox was elected mayor in 2012. Ferentz was returned to the police department, awarded back pay, given a raise and formally promoted to police chief. Fox, who lives with Ferentz, abstained from the vote to reinstate Ferentz, according to published reports from the time.

In his decision, Pickering describes Fox and Ferentz as “close personal friends and political allies.”

Borough officials have indicated that if Ferentz were not rehired and given back pay, the jury award may have been even higher. But according to Pickering’s decision, included in those resolutions was an agreement that nothing in the extensive disciplinary hearing could be used against Ferentz in a civil suit.

In essence, the borough’s defense was limited to admitting Ferentz was wronged but disputing the motivation for that wrongdoing. It was precluded from arguing that as mayor, Frederick could have reasonably believed that Ferentz acted wrongly.

According to a memo sent by the JIF to elected officials in participating communities, including those in Cape May County, West Wildwood’s attorney contacted the MEL and let them know the new Board of Commissioners were considering dismissing the disciplinary charges and appointing Ferentz as police chief. The MEL responded that this could significantly impact its ability to defend the whistleblower suit and could jeopardize West Wildwood’s coverage.

The memo cites JIF bylaws that indicate that members are required to participate in the defense of lawsuits.

“Unfortunately, in May, June, and October of 2012, West Wildwood ignored the NJ MEL’s warning and the warning of their own solicitor, and they adopted a series of resolutions dismissing the disciplinary charges, appointing Ferentz as the chief of police, and entering into a negotiated settlement agreement and release with Ferentz without ever providing any of these documents to the NJ MEL and the ACM JIF for their review and approval,” reads the memo from JIF.

The memo continues that the resolution directly impacted the defense of the whistleblower suit.

West Wildwood administrator Christopher Ridings stated in an emailed request for an interview that the borough would have no comment on the decision.

From: Cape May County Herald

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