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Late this spring, Romaneck's attorneys had put two case settlement offers on the table with the City of Phoenix:
One was a $1.5 million cash payment. Under that arrangement, National Union would kick in its $500,000 (plus pay the fees submitted by Jones, Skelton and Hochuli--more than $140,000, according to the city's risk-management office).
The other $1 million would have to come from Transport, the next carrier in line.
In the other, the city would pay Romaneck $500,000 through its primary insurance carrier--which already had indicated it backed the deal--and stipulate to a $5.5 million judgment--but not collectible only from the city's insurance companies.
Under the latter arrangement, it would be up to Romaneck's attorneys to collect the money from the excess carriers--no small task, as Lori Romaneck has learned. Arizona courts allow such deals if they're not deemed unreasonable, collusive or done in bad faith.
By the end of May, it seemed in the best interests of Romaneck and the City of Phoenix to settle before trial. That's because a court hearing scheduled for the first week of June was a potential land mine for both sides.
For the first time, the city's attorneys were going to argue that the Romaneck case was barred because Arizona law allows most government employees "qualified immunity" from such lawsuits.
"Unless a public employee acting within the scope of his employment intended to cause injury or was grossly negligent, neither a public entity nor a public employee is liable for . . . the failure to make an arrest or the failure to retain an arrested person in custody."
"Wanton negligence is highly potent . . ." according to an Arizona case on the issue. "It is flagrant and evinces a lawless and destructive spirit."
The city's attorneys argued in court papers that what happened in 1966-67 was anything but wanton: "Reasonable police/fire officials could disagree on whether sufficient evidence existed in 1967 to charge Keidel with the arson of his home and the homicide of his two children."
Romaneck's attorneys first responded that the immunity statute was unconstitutional. That was a long shot, in that lower-court judges usually are loath to create new case law based solely on constitutional issues.
Their more persuasive argument was substantive, framed by their definition of gross negligence:
"[Detective] Moore terminated the [fire] investigation in 24 hours because they had not yet positively disproved the arsonist's proffered explanation of how the fire could have started innocently--even though that explanation violates fundamental scientific knowledge, and even though [fire captain] Bivin has stated that he told Moore to pursue prosecution!"
They added, ". . . The city already believed Gene Keidel killed his wife and buried her in the backyard. . . . All they had to do was ask Lori. DiAnne Keidel's body would have been recovered and the murder conviction which occurred in 1995 would have occurred in 1967."
If Judge Cates bought the city's argument, the lawsuit would have been history. But if he didn't, and it proceeded to trial, the city's financial exposure--especially in light of the astounding Mallet verdict--may have been mammoth.
What transpired during this spring's settlement negotiations will be sorted out in the latest lawsuit in the Romaneck case--this one filed June 29 by Transport Insurance against Romaneck and the City of Phoenix.
Says Shane Swindle, an attorney for Transport, "This is a very unique case from a legal perspective, and a unique set of facts. Nothing out there really answers the question if the city and the plaintiff [Romaneck] can do the kind of deal they did in this case, and bind the excess carrier [Transport]."
Counters the City of Phoenix's Phil Haggerty: "We told Transport about a possible settlement, and not at the last minute. That's all you have to do. You've got insurance on your automobile, you don't have to investigate the accident, do legal research, then turn to your carrier and say, 'Gee, I think you're liable.' They are complaining that they didn't get proper notice to make a decision about the direction they wanted to go. We say they did."
The last chapter in Lori Romaneck's legal saga has yet to be written, and she seems fine with that.
"I didn't have a clue what I was getting into when I walked into that police station, just that it was a big deal," she says. "It never came into my mind that it would come to all this. I just wanted to take care of my mom."
She continues to spend her days cleaning homes--she owns a small service--feeding her horses, and meeting when she can with other burn and trauma victims.
Romaneck says she sleeps with a handgun and a fire extinguisher by her bed.
Contact Paul Rubin at his online address: firstname.lastname@example.org