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Originally published: 2013-04-04 18:12:50
Last modified: 2013-04-04 18:12:50

New River settles small claims suits

The New River Service Authority has reached a settlement that will provide $25,000 to be split among 18 former employees of the defunct mental health agency, the board announced Thursday.

Members of the New River board, which includes the counties of Alleghany, Ashe, Avery, Watauga and Wilkes, met briefly Thursday in Boone to wrap up final matters for the organization. Representatives of Alleghany and Ashe counties were absent due to the wintery weather.

The 18 former employees opened small claims suits in Watauga County last year, requesting payment for unused vacation time and other expenses that were not provided when the organization collapsed, and most were successful.

The New River board appealed the rulings. The former employees later banded together to hire attorney Jak Reeves of West Jefferson, who negotiated with New River attorney Bruce Kaplan of Boone.

In exchange for the $25,000 payout, the employees have agreed to dismiss their cases, New River board Chairman Nathan Miller said Thursday. The New River board will not determine how the employees split the money, he said.

"We were able to work with these 18 former employees because their demands were reasonable and worked within the amount of money that New River Service Authority had," Miller said.

He contrasted the small claims cases with a federal lawsuit filed by another group of former New River employees, one he said requests an "absurd amount of money and makes all sorts of outrageous claims and sues individual board members."

A judge dismissed that lawsuit last week after determining that it did not identify any specific federal law the agency had allegedly violated.

The board said little about a followup letter Tuesday from the plaintiffs' attorney, Charles Oswald, which requested that the New River board provide written assurance within 10 days that the former employees would be paid the full amounts due. Miller said that the nominal amount of money left in New River's accounts would not cover what the plaintiffs had demanded.

"It's been a year and a half since things went south, and we are now sitting here lawsuit-free, which is kind of an amazing thing," Miller said.

The board also learned that attempts at an audit of the organization were unsuccessful.

The New River board allocated up to $35,000 last year for Charlotte-based firm CliftonLarsonAllen to conduct an audit. Miller said the firm was unable to perform the audit and had received confirmation from the state that an audit would not be necessary.

A portion of the $35,000 will be returned to the board, Miller said.

"I just think it's good news," said Avery County Commissioner Kenny Poteat.