County to Join Lawsuit; Seeks to Settle Another

Huntsville, TN (2018-09-17) The Scott County Commission has voted to join a list of counties in a class action lawsuit seeking to recover unpaid and underpaid funds from the federal government. In addition, the body voted to allow the County Attorney to attempt to settle an ongoing claim.

At its regular monthly meeting Monday night, the Commission voted to accept an invitation to join 24 other counties in Tennessee in a class-action lawsuit seeking to recover funds due under the Payment In Lieu of Taxes (PILT) federal program. The PILT program allocates funds to counties under a formula created in Washington, D.C., as the name suggests, instead of paying county levied property taxes. The as-yet unfiled lawsuit would focus on the years 2015, 2016 and 2017, years in which the county believes the program underpaid the formula or made no payments at all, amounting to $144,645.

The lawsuit would seek only to recover the money believed to be owed. “We are not seeking damages, but if they do owe this, we have to file this [lawsuit] in order to recover,” County Attorney John Beaty explained. Scott County would not be responsible for any fees or costs, and any attorney fees would be paid from the recovered amount. “The attorney’s fees would be [up to} 34 percent of the award,” said County Mayor Jeff Tibbals. The Commission voted 12-0, with Commissioners Sam Lyles and Kenny Chadwell absent, to join the suit.

Additionally, the body voted to give Beaty authority to seek to settle a lawsuit associated with the bankruptcy proceedings of Pioneer Health, the former owner/operator of the Scott County Hospital (formerly Pioneer Community Hospital of Scott). The county was named in an action brought by a storage firm for over $40,000 in fees to store a number of patient and financial records for the last 5 years.

As a result, the county was forced to engage a Mississippi law firm that was certified to practice in bankruptcy court. “Legal fees are running at about $20,000 per month, and they keep going on and on,” Beaty stated. Beaty said a settlement offer had been made, in which the county would be responsible for half the cost of destroying boxes of financial records, which would cost approximately $2,700. “I strongly recommend resolving this now,” Beaty concluded. The vote was again 12-0, with Lyles and Chadwell absent.