Spokane’s risk management strategy under fire

The City of Spokane may sever its contract with its risk management firm following allegations that the firm pressured police and a city employee to hide potentially incriminating details surrounding a 2010 collision that paralyzed a pedestrian. According to documents obtained by lawyers representing the paralyzed woman, the city’s contracted insurance adjusters were able to influence the removal of certain details from the official press release about the crash, and reportedly sought to influence the police investigation. The adjusters, in fact, were able to interview crash witnesses before the investigating officer, who was later advised that “if you guys want a raise” he should work with the risk managers to save the city some money, the documents show. “To me, it looks like … risk management runs things in a way the public is not aware,” said Breean Beggs, who is one of three attorneys representing Patricia Searl, 70, who was paralyzed when hit by the city vehicle when crossing the street. “It’s troubling when they are interviewing witnesses before police can, and really troubling that they are trying to influence a police investigation by implying that he will get a raise if he handles it a certain way.” City Administrator Theresa Sanders agreed. Sanders said Monday that Chief Financial Officer Gavin Cooley has been asked to investigate its contract with the risk-manager, Alternative Service Concepts, which has an office in City Hall, “to determine whether we will do business with this vendor at all.” “I do not think it’s appropriate,” Sanders said of the behavior described in the documents. “Understanding that risk management’s role is to protect the city’s assets, they should always do so in a legal, professional and appropriate way.” The incident that led to the current legal fight occurred just before dark on Oct. 25, 2010. Searl was walking very slowly with the aid of a cane following a recent injury when she tried to cross at the busy intersection of Buckeye Avenue and Northwest Boulevard. According to witnesses, three of the four Northwest Boulevard lanes of traffic stopped at the intersection, which doesn’t have a traffic signal, to let Searl cross. But city engineering services employee Daniel J. Hirst, 65, told investigators he didn’t see Searl until it was too late and hit her in the intersection with a city-owned Ford pickup, knocking Searl about 19 feet from the point of impact. Searl suffered internal injuries and a severed spine that paralyzed her below the waist, Beggs said. Spokane Police Cpl. David Adams was assigned to investigate the case. He determined through witness statements that Searl was in the un-painted, but legal, intersection and had the right of way. In his detailed 19-page report, Adams determined that the driver, Hirst, should be cited for failing to yield to a pedestrian. Adams also included detailed notes of the actions and comments of the contracted risk managers, which Searl’s lawyers had to fight to obtain. After failing to reach a suitable out-of-court settlement, Beggs, and attorneys Kathy and Michael Paukert sued the city on Searl’s behalf. It was during depositions in preparation for that lawsuit that the lawyers learned from Adams, the police investigator, of the detailed notes he’d taken during his conversations with the risk managers. But one page was missing. In that single page of notes, which Adams produced from his own files during a break in the deposition, he noted how Dennis Paradis, a sub-contractor for the risk management company, had contacted crash witnesses before officers. Adams also wrote that he was concerned about “bias in civil investigation/witness contamination.” “We’re after the truth, not trying to” defend the City of Spokane, he wrote. Adams also quoted Debra Eubanks, the risk manager’s claims supervisor, as saying, “We don’t want (Searl) to get an attorney,” and Paradis as saying “If you guys want a raise …” Kathy Paukert, one of Searl’s attorneys, praised the police officer’s handling of the case. Adams “has been so honorable and has been a hero in this case,” Paukert said. “From the very beginning, he has done nothing but his job and has been completely honest.” Paukert, however, said she was concerned that the city would allow conversations between Adams and risk management officials before the investigation was complete. In one series of emails on Oct. 26, 2010, Eubanks wrote Adams, the police investigator, about information being released by city spokeswoman Marlene Feist. “Our risk manager … had to tell Marlene NOT to release any statement on this because the media was not aware that it was a City vehicle,” Eubanks wrote Adams the morning after the collision. “Can you pass that on to your department to make sure that message gets through and there is no media/public release? Thank you!” According to the emails, Feist did issue a news release but complied with a request to make the wording more ambiguous, including a change to indicate that Searl was struck “near the intersection” rather than in the intersection. Sanders, the city administrator, defended Feist’s agreement to let risk managers dictate what should be public information. “She does not, as a matter of practice, take guidance from anyone outside of the city,” Sanders said of Feist. “But, she developed the information based on the best available facts to her.” As for the city’s legal position on the lawsuit, Sanders left that to the attorneys. The city, and its insurance carrier American International Group Inc., have hired high-profile Seattle attorney Michael Patterson to assist other city attorneys in defending the Searl suit. Patterson could not be reached Tuesday for comment. But in their Nov. 17 court filing, attorneys representing the city essentially blamed Searl for her own injuries for “failing to keep a proper lookout for on-coming traffic … and other negligent or intentional conduct. “Any injuries and damages, if any, were caused by plaintiff’s own fault,” court records state.