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2:26 PM Fri, Sept. 21st

CAFMA staff, board members stacking up legal fees

Nicolas Cornelius serves as the attorney for the Central Arizona Fire and Medical Authority, Central Yavapai Fire District (CYFD) and Chino Valley Fire District boards. Sitting next to him is CYFD Board Chairwoman Darlene Packard during CYFD’s July 23 board meeting. (Max Efrein/Courier)

Nicolas Cornelius serves as the attorney for the Central Arizona Fire and Medical Authority, Central Yavapai Fire District (CYFD) and Chino Valley Fire District boards. Sitting next to him is CYFD Board Chairwoman Darlene Packard during CYFD’s July 23 board meeting. (Max Efrein/Courier)

About 18 months of internal strife among Central Yavapai Fire District (CYFD) board members and its staff has led a couple key players to hire private attorneys in order to protect their reputations. Some of the costs for those attorneys are being covered with taxpayer dollars.

At the forefront of the conflict is CYFD board member ViciLee Jacobs and Central Arizona Fire and Medical Authority (CAFMA) Fire Chief Scott Freitag.

On March 14, Freitag lodged a written complaint against Jacobs claiming she had made “unsubstantiated accusations” against him and his command staff, some of which he warned were potentially defamatory.

Though the accusations were deemed unfounded (https://www.dcourier.com/news/2017/nov/06/fire-board-accusations-against-chief-unfounded/), Jacobs and a small group of her supporters, which include CYFD board member Tom Steele and several members of the Citizens Tax Committee of Yavapai County, did not relent. They continued to question Freitag’s integrity and eventually began targeting CYFD Board Chairwoman Darlene Packard and attorney Nicolas Cornelius, who serves as an independent contractor for the CAFMA, CYFD and Chino Valley Fire District boards.

As matters escalated and “biased” news stories from some local media about the controversy began cropping up, Freitag felt it necessary to hire an attorney to provide him with advice on how to protect himself from defamation.

“It’s unusual to have the level of discontent with two board members (Jacobs and Steele) who are hell-bent on accusing me of criminal activity, which impacts my future ability to obtain positions as well as my professional reputation,” Freitag said.

In tandem with hiring an attorney, Freitag requested that the CAFMA board include an indemnification clause in his contract so that the agency would cover whatever legal costs are incurred from seeking outside legal counsel regarding matters related to his job.

“I said, ‘Look, I don’t think I should have to pay for my legal dissents against these board members who are accusing me of criminal activity in the course of doing my job as the fire chief,’” Freitag said. “Now, obviously, if I were to have actually done any of the stuff that they have accused me of, then the board’s not responsible for my legal fees.”

The board agreed to include the clause in his contract, with the first sentence reading as so: “The Agency shall defend, hold harmless, and indemnify the Chief against any tort, professional liability claim or demand or other legal action, including attorneys’ fees incurred for the defense of same, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of his duties as Chief.”

The clause makes it so the chief is eligible to be reimbursed for “reasonable attorney’s fees and associated legal expenses up to $8,500 annually.” If that amount is exceeded in a given year, then the additional expenses may be brought to CAFMA’s attorney for review, and then be voted on by the board’s directors for approval.

Having exceeded the $8,500 amount earlier this year, Freitag has gone to the board three times with requests to be reimbursed for various sums. All three requests were approved, bringing the total amount of legal expenses covered by CAFMA – a public entity funded by taxpayer dollars – on behalf of Freitag to $16,325.

“A large portion of that cost came up front with a retainer fee,” Freitag said.

Therefore, whatever that retainer fee amount was will be deducted from the value of any work performed by the attorney when Freitag is no longer in need of the attorney’s counsel.

Currently, there are no outstanding accusations by Jacobs and Steele against Freitag that haven’t already been addressed and considered closed matters. However, if more arise, Freitag said he may have to up the ante.

“We’ve tried to just say ‘Knock it off,’ because that’s the least expensive way for us to move forward,” Freitag said. “If it doesn’t stop, there may have to be legal action that forces them to stop.”

ATTORNEY GETS INDEMIFICATION COVERAGE

During each fire board’s most recent meeting on July 23, the majority of directors on each board voted to approve that their attorney, Nicolas Cornelius, have an indemnification clause included in his contract as well.

This was done mostly in response to a recent bar complaint made against him to the State Bar of Arizona by Jacobs and Steele.

“They have essentially raised the same allegations they previously made that I have conflicts of interest, that I’m dealing improperly with the board and that it’s not proper for me to represent these different outfits,” Cornelius said. “I’m working through that process and am incurring fees for outside counsel to assist me with responding to that.”

Though he doesn’t intend to bill the agency for the costs he’s already paid out, he said he likely would rely on the indemnification clause if he had to hire an attorney to further protect himself.

“I’ve never had an indemnification clause in any of my contracts before,” Cornelius said. “It’s just not something I thought I ever needed.”

BOARD MEMBER’S COSTS

In early 2018, CYFD Chairwoman Darlene Packard also believed her reputation was being threatened because of accusations brought up by Jacobs’ husband, Larry, and former CYFD board member Robert Page.

Larry had taken it upon himself to present two affidavits signed by Page to the CYFD board during its call to the public.

The affidavits expressed concern regarding the signing of two CAFMA checks amounting to $300,000 — both of which were legally signed and processed.

Packard’s name was mentioned in one of the affidavits in such a way that she found to be potentially defamatory, so she hired a lawyer with her own money to look into the matter.

Under threat of a defamation lawsuit, Page, through his attorney Christopher Jensen, made clear that he did not intend to put Packard in a bad light.

“Robert V. Page has no reason to believe that Darlene Packard was involved in the improper check writing procedure as to either the $50,000 check or the $250,000 check, and any interpretation of either of Robert V. Page’s two Affidavits as relating to the actions or inactions of Darlene Packard is incorrect,” Jensen wrote in a formal correspondence to Packard’s attorney on April 17, 2018. Jensen made this correspondence public by sending it to The Daily Courier on that date.

In all, Packard has spent $6,000 on such efforts. However, since she is a volunteer public official and not employed by CAFMA, she cannot claim indemnification through the agency.

While it hasn’t been discussed much by CAFMA’s board members and staff, such a policy could change if deemed appropriate.

“At some stage, when these things get cleared up, it may be the case that the board considers whether or not directors should be indemnified if they incur expenses,” Cornelius said. “We’re kind of in new territory here. It’s not something I have seen at other agencies.”

JACOBS AND STEELE

When contacted regarding this story, Jacobs declined to comment and Steele refused to comment.

However, in a previous conversation about this topic, Steele said Freitag, Cornelius and Packard have brought these legal costs upon themselves.

“They’re running up the charges as far as I’m concerned,” Steele said.

“Don’t look at us as being the bad guys. We’re trying to protect the taxpayers. That’s who we work for.”

Follow Max Efrein on Twitter @mefrein, email him at mefrein@prescottaz.com or call him at 928-445-3333 ext. 1105.