Insurer Seeks $1.3 Million From County In Mercer Case

The $45 million settlement in Milwaukee County's longstanding pension lawsuit may not have closed the books on that chapter in county history after all.

Now, an insurance company is seeking $1.3 million from the county, claiming the May settlement in the Mercer case deprived it of the chance to recover its litigation costs in separate pension cases.

Travelers Casualty and Surety Co., of Hartford, Conn., made the claim in a letter to the county dated July 21 and obtained by the Journal Sentinel this week.

Travelers paid the costs of defending the county Pension Board in a series of cases in which sheriff's deputies and county workers who retired before 2001 claimed they were unfairly denied the generous pension improvements of 2001 that went to other county retirees. It is the costs of those cases that Travelers now wants to county to pay.

Travelers says the county violated its contract with the insurance firm by the terms of its settlement with Mercer, the county's former pension actuary. The settlement released Mercer from "any and all claims" arising from its actuarial work for the county.

County Executive Scott Walker and the County Board approved the $45 million Mercer settlement May 19. About $30 million went to the county pension fund and the rest to lawyers and other Mercer litigation costs.

The county failed to get Travelers' consent to the settlement, the claim states.

"In fact, the (county) Employee Retirement System entered into the settlement without Travelers' knowledge," according to the claim.

That left the county pension system liable for Travelers' costs in the earlier cases, according to the insurance firm's claim, which is a precursor to a lawsuit.

John Pollock, a local attorney for Travelers, referred questions on the claim to Travelers' corporate offices. Travelers' spokeswoman Jennifer Wislocki had no comment.

The county had claimed that mistakes by Mercer led the county to approve the backdrop lump sum benefit and other pension improvements. In agreeing to the settlement, Mercer did not admit to any wrongdoing.

County Corporation Counsel William Domina said the Travelers claim was under review.

"The Pension Board sees no merit in paying fees that were incurred well before our litigation with Mercer," Domina said.