HealthSmart VS City of Lubbock

Special City Council session on Saturday, possible Parker settlement

Posted: Oct 21, 2010 1:56 AM CDT

Updated: Oct 22, 2010 4:27 PM CDT

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By James Clark email

LUBBOCK, TX (KCBD) – In a rare Saturday special session, Lubbock City Council is scheduled to vote on a proposed settlement with businessman Ted Parker.  In order to meet Saturday, the City Council had to have posted public notice of the meeting no later than 1:30 PM on Wednesday.  KCBD NewsChannel 11 discovered the special meeting notice after hours. 

How Did This Start?

Parker was in charge of ICON/AAG which was the city’s health insurance administrator from 2004 through 2006.  In 2007 the city sued Parker’s company, and accused him of not allowing an audit, which he was contractually obligated to do. 

At the time, former Mayor David Miller said that AAG might owe Lubbock $200,000.  As time went on the claim got bigger until Miller said publicly that Parker owes the citizens of Lubbock $12 million, which Parker denies.  Parker also claims that the city wanted trade secrets as part of its audit, which he was not willing to disclose.

The Fight Moved To Dallas County

Parker filed a separate lawsuit in Dallas County against four city officials, including Miller, saying their statements were false.  Miller, City Manager Lee Ann Dumbauld, Assistant City Manager Scott Snider, and Risk Management Director Leisa Hutcheson counter-sued Parker in Dallas County at City of Lubbock expense.  

The city also sued Covenant Health System seeking records pertaining to Parker’s Company. Meanwhile, the city’s liability insurance company sued Lubbock in an effort to not pay any claims from the other Parker lawsuits.  The Covenant lawsuit is still pending and the city is in the process of settling out of court with the liability insurance company.

The FBI Raid & Other Strange Facts

Only adding intrigue to the all-out war-of-words and series of legal dramas, the FBI raided Lubbock City Hall in May of 2008, confiscating health insurance records.  To date, no charges have ever been filed. 

Parker dropped his Dallas County lawsuit in May.  But Miller, Dumbauld, Snider, and Hutcheson continued their counter-suit at City Of Lubbock expense even though, if successful, they would be legally entitled to any award instead of the city.  Only one Councilman, Paul R. Beane, voted no to this arrangement.

Some of the legal expenses paid by the city for Miller, Dumbauld, Snider and Hutcheson include items such as beer & oysters, steak dinners, and filet mignon.  Just on the Dallas County lawsuit alone, the city has spent $1.8 million in legal expenses.   

Details Not Yet Available

As for the settlement to be considered on Saturday, public records do not yet reflect details.  Look for a follow up Thursday on and KCBD NewsChannel 11 at 5 & 6.