Knox pension lawsuit: Law director can't block settlement, judge says

Knox County's law director has no power to press on with a costly lawsuit against the county pension board against the wishes of the county's mayor and commission, a judge ruled Friday.

"The law director is required to abide by the client's desires," Chancellor John Weaver wrote. "The client ... acting through its mayor and commission, have instructed the county law director to discontinue this action. Accordingly ... the Knox County law director no longer has the authority to continue."

Law Director Richard "Bud" Armstrong said he won't fight the decision.

"We'll follow the judge's order," he said. "Evidently, the county doesn't want to know if the pension plan is being administered properly, and we'll follow the wishes of the client."

Knox County Mayor Glenn Jacobs called the decision a victory for taxpayers.

"There are better ways of resolving this issue without resorting to an expensive and divisive lawsuit," the mayor said. "The chancellor's ruling defines a path of resolution for this lawsuit and sets a precedent for how Knox County proceeds with litigation in the future. I'm glad to have this in place now and am excited to move forward."

A costly case

So far the case has cost taxpayers nearly $300 per hour for lawyers, records show.

The lawsuit pits the county Law Department against the county pension board and a handful of Knox County Sheriff's Office deputies — seven retired and one active — approved to receive benefits under the county's Uniformed Officers Pension Plan. The Law Department seeks to reverse a longstanding pension board process and require the board to calculate pensions on base salary and not total compensation (such as including vacation pay) in accordance with changes to the county charter — and translating to reduced pension benefits.

A proposed settlement would amend the plan to allow including up to 43 days of vacation pay in figuring pensions.

The mayor, the pension board and Sheriff Tom Spangler have given the settlement their blessing, as has the county commission by a vote of 7-1 last week.

Lawyers representing Armstrong argued neither mayor nor commission had the power to tell the law director - who's elected independently of either - to drop the case.

"Only the law director has the authority to settle this lawsuit," attorney Melissa Carrasco wrote on behalf of the county.

The judge shot that argument down. There's no dispute the law director oversees the county's legal affairs, according to the ruling, but he also has to follow the wishes of mayor and commission as his clients.

No client? No case, Weaver wrote.

The ruling doesn't approve the proposed settlement to the lawsuit, which remains under consideration.