ANDERSON — A city councilman has filed a lawsuit against the city, claiming nearly $75,000 in fees associated with his brokering an insurance contract with the city is being withheld for political reasons.
Art M. Pepelea Jr., R-District 5, filed the lawsuit Wednesday in Madison Superior Court 1, nearly four months after he sent a notice of tort claim to city officials saying a lawsuit was a possibility if the city didn’t settle the claim. A notice of tort claim is a declaration to a government agency that a civil lawsuit is being filed against it.
Anthem Insurance is also named as a defendant in the lawsuit, which claims Pepelea is owed $74,806.80 for a lost commission tied to a city employee health insurance contract.
“No one in this administration has had the courage or backbone to call me and tell me why this was done,” Pepelea said Thursday. “This is politics at its truest form.”
According to the lawsuit:
Pepelea, also an insurance agent, acted as a broker for Anthem when the city entered into a contract with the firm in 2007 to direct the city’s self-funded health benefits plan for 2008.
Each year, the city opens up the process for insurers to submit bids to administer the plan. Anthem had been doing the job since 2005, but Pepelea didn’t seek a broker’s commission on any contract until the one signed in 2007 covering 2008.
When Pepelea campaigned for a city council seat in 2003, he pledged to lower insurance costs and made the promise not to accept a brokerage fee. When he campaigned for re-election in 2007, he didn’t make the same campaign promise, he said, citing other insurance brokers doing business with the city that were earning fees.
“They’re paying everyone else; why shouldn’t I get paid?” Pepelea said. “I’m a professional. Why shouldn’t I get paid? It’s what I do for a living.”
In November 2007, the city council again approved a contract with Anthem for 2008, and then-City Controller Morris Long and then-Deputy Mayor Rob Sparks signed off on the deal. In that contract, a nearly $75,000 brokerage commission was included, and the city council and city administrators were aware of the charge. Pepelea didn’t vote on the contract.
The same day the contract was to start on Jan. 1, newly sworn-in Anderson Mayor Kris Ockomon sent a letter to Anthem officials to stop Pepelea’s commission and to ask for a new broker.
“The City of Anderson unilaterally requested a modification of an in-place contract to single out and harm Pepelea,” Pepelea’s attorney, Mark Dudley, writes in the complaint. “Pepelea is a Republican. Mayor Ockomon is a Democrat.”
Ockomon declined comment Thursday, referring questions to City Attorney Tim Lanane. Lanane said withholding the brokerage fees wasn’t politically motivated.
“That’s not true,” he said. “All of a sudden, in the last days of the previous administration, he seeks (brokerage) fees.”
Lanane said city officials were still reviewing the suit, but said the city expected Anthem to pay Pepelea’s fees, and thought that should have been reflected in the contract with the insurance company.
“It’s been confusing,” Lanane said. “The bottom line is, it was going to come from the city’s coffers.”
Along with the $75,000, Pepelea is also seeking attorney fees and other costs.
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What’s next? A trial date has not yet been set in Anderson City Councilman Art Pepelea’s lawsuit against the city. Pepelea is seeking nearly $75,000 in disputed insurance brokerage fees.
Local News
11:53 p.m.: Councilman Pepelea suing city
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