The Board of Commissioners swallowed hard tonight and authorized a $120,000 payment to a Carteret County woman to satisfy a five-year-old court order that the town had mistakenly ignored.
This wasn’t easy for any of us, but we really had no choice but to reach in to our reserve fund and make the payment. This won’t affect the current year’s budget or your taxes.
The payment to Miranda Glover stems from the town’s purchase in 2009 of property at 106 Church Street, popularly known as “the cigar shop,” from the estate of Hepsey Bishop. Many might remember that this was a turbulent time in town history that saw wholesale changes in town staff, including the manager. That figures into what happened.
The interest-free promissory note required a down payment on the cigar shop property with a final payment of $190,000 due to the Bishop estate in 2015.
The staff at the time, though, was unaware that a Carteret County court had ordered the town two years earlier to make the payment to that county’s Clerk of Court office to satisfy a $100,000 judgment against Scott Padrick, Bishop’s grandson and her executor.
“The new town manager and the new town finance director had no knowledge of the court order. Neither did the new town attorney,” explained Michael Parrish, the current Swansboro town attorney. “So, the town paid the $190,000 to the estate. That money was then distributed to Scott Padrick.”
Town staff in 2013 put the court order in a “legal folder” in the town’s vault, Parrish explained. Unfortunately, a copy was not placed in the town’s active file relating to the cigar shop property, he said. The current finance director, unaware of the court order directing payment to the clerk’s office, made the payment in 2015 as stipulated by the purchase agreement.
I should note here that Padrick knew that the payment should have been made to the court, but he apparently pocketed our check.
The town learned of the error in November when Glover’s attorney contacted Parrish’s law firm, Ward and Smith of New Bern, asking about the payment to the clerk’s office. The $100,000 judgment had by then ballooned to more than $150,000 after interest had accrued at about $1,000 a month.
The commissioners met several times in closed session to discuss our options
“We believed that the order was enforceable against the town, and that failure to honor the town’s obligations would not only be legally futile, but also embarrassing,” Parrish said tonight.
We directed him to work with Glover’s attorney for several months trying to locate Padrick to get our money back. When that failed, we negotiated with the Glover family to purchase the judgment at a discounted $120,000.
Doing so allows us to enforce the judgment against Padrick to try and recover the town’s money. We intend to do all that the law will allow.
The judgment against Padrick resulted after his dog bit Glover, then a minor, in 2007 in Carteret County. Four years later, a Carteret court issued a $100,000 judgment against Padrick to pay Glover’s medical bills and pain and suffering. After Padrick failed to pay the judgment, the court ordered the town to direct the real-estate payment to the clerk’s office, which would have forwarded the money owed to Glover and given Padrick what remained.
Not making the payment would have exposed the town to a lawsuit and more legal fees and accrued interest.
I’m with Mayor John Davis on this. “On behalf of the Town of Swansboro, I apologize that we allowed such an error to occur,” he said tonight. “We believe this was an error of omission and was due to not having adequate transition processes for leadership changes.”
Though the circumstances are extremely rare, current staff assured the commissioners that this can’t happen again because of their improved bookkeeping and filing systems.
It better not. While I like hanging out at the cigar shop, I didn’t want to pay for it twice.
Thanks to the Glover family. They were willing to work with us and settle the claim at a discount.