Gordon Rees Scully Mansukhani Partner Hiawatha Northington II prevailed on a summary judgment motion on behalf of a former government employee in an action by the State of Mississippi to recover money paid to him as a part of a settlement agreement of a potential claim against his employer, a municipal utility commission.
In this matter, the plaintiff, the State Auditor of Mississippi, claimed that the settlement agreement between the employee and his municipal employer was illegal, alleging that the payment of the settlement amounted to “illegal compensation” in violation of the Mississippi Constitution and the Mississippi Code. As a result, the State sued the employee and a surety for the board of the municipal employer, seeking the return of the money paid in settlement. The surety paid the State, then filed a cross-claim against the employee for the return of the settlement funds, characterizing the settlement as a “severance” prohibited by Mississippi law.
In filing his motion for summary judgment, Northington argued that neither the State nor the surety could point to any constitutional, statutory, or case law that would preclude the defendant employee from entering into a valid settlement agreement of a potential claim against the municipal entity which employed him. Northington further noted that the agreement resulted from negotiations between the parties, both of which were represented by counsel, and the board of the municipal employer duly voted on and approved the payment, resulting in a completed, arms-length transaction.
After oral argument, the trial court granted the employee’s motion for summary judgment in a written opinion, finding not only that the relationship between the employer and the employee was contractual but also that the settlement between the parties was of a legal, bona fide claim that was in no way precluded by the Mississippi Constitution or other provisions of the Mississippi Code. The surety chose not to appeal, ending the litigation.