Knightstown Banner publisher Eric Cox may file a lawsuit to force open a secret court settlement concerning the town of Knightstown and a lawsuit filed by former dispatcher GiGi Steinwachs.


Hoosier State Press Association

Knightstown, Ind. (February 5, 2004) — Knightstown Banner publisher Eric Cox may file a lawsuit to force open a secret court settlement concerning the town.

In late 2003, Knightstown’s insurance company settled a lawsuit filed by former dispatcher GiGi Steinwachs. She claimed town officials harassed her, violated her civil rights, threw a chair at her in one incident and locked her in a room.

When she was fired in May 2002, supervisors contended she used town police department computers to make defamatory statements about the sex lives of some police officers, including allegations of infidelity.

A provision of the settlement was details would be kept confidential. Knightstown did reveal it paid $5,000 to Steinwachs’ attorneys as part of the settlement. Any other monetary settlement was paid by the insurance company, Governmental Exchange/Bliss McKnight of Illinois.

According to Cox and editor Jeff Eakins, the insurance policy specifies the insurance company will defend the town and has the power to settle a case. If the town objects, then the insurance company would step aside, and the town would be on its own in defending the lawsuit.

According to Indianapolis Star reporter Bill McCleery, Steinwachs and town officials said the insurance company insisted on the secrecy provision.

Cox and Eakins believe the public should know the details of any court decision involving a public agency.

“We think the people have the right to know the kinds of decisions being made by the insurance company on behalf of the town,” Eakins told McCleery. “We think it’s a pretty important public policy issue.”

Cox filed a complaint with Public Access Counselor Michael Hurst against the town for refusing to disclose the settlement. Eakins, who has a law degree, added research on how insurance companies had been defined as an agent of a public body in another state, which became the basis to prevent a confidential settlement.

Hurst’s opinion was the insurance company was not a public agency subject to the Access to Public Records Act.

HSPA general counsel Steve Key said the Knightstown situation is not an isolated one. Insurance company policy puts public agencies in the position of accepting the insurance company as the decision-makers in lawsuits or declining to be insured at an affordable premium.

Insurance companies desire secrecy because they fear settlement amounts being made public might encourage other individuals to bring lawsuits against government agencies the companies serve, Key said.

The public, though, is robbed of information to help it determine whether there are problems to address within a government body or show that the public agency moved decisively to handle the situation sparking the lawsuit, he said.

During the 2003 legislative session, Rep. Bob Kuzman (D-Merrillville) introduced a bill to restrict a court’s ability to allow confidential settlements. HSPA sought an amendment to Rep. Kuzman’s H.B. 1147 to make it clear lawsuits involving public agencies would not be allowed to keep settlements secret.

HB 1147 was assigned to the House Committee on Judiciary, chaired by Rep. Linda Lawson (D-Hammond). Following testimony on the bill, Rep. Lawson appointed a subcommittee to work on the bill. The bill, which placed the state’s plaintiff attorneys against the state’s defense attorneys, did not emerge from the subcommittee.

Kuzman decided not to introduce the bill in the 2004 General Assembly, but has left the door open for 2005.