Morristown’s council on Tuesday unanimously approved a $1.15 million settlement with Police Officer Keith Hudson, who last year won a court case alleging he was demoted for reporting concerns about Chief Pete Demnitz’s freelance jobs.
The town will drop its appeal and pay $600,000, with the rest coming from the Garden State Municipal Joint Insurance Fund, according to Mayor Tim Dougherty.
“We are pleased to reach an agreeable settlement with Patrolman Hudson that will cost taxpayers far less than originally anticipated,” Dougherty, who is vacationing, said in a statement.
A civil jury ruled unanimously for Hudson last May, awarding the 13-year police veteran $1.5 million in punitive damages, plus $199,000 for past and future lost earnings caused by his demotion from the detective bureau, and $10,000 for emotional distress.
Superior Court Judge Louis Sceusi reduced the punitive damages to just over $1 million, and the town filed an appeal attempting to overturn the verdict.
Hudson’s victorious lawyers, meanwhile, sought near $637,000 in legal fees from the town. Legal fees are included in the settlement, according to town Administrator Jillian Barrick.
“This covers everything,” Barrick said. The administrator said Hudson settled for about half of the initial jury award, which she pegged at $2.06 million.
The terms disclosed by the town do not include restoring Hudson to the detective division. Hudson could not be reached for comment on Tuesday night.
Demnitz, who has served on the police force for more than 35 years, was placed on paid administrative leave in December, for undisclosed reasons.
Town Public Safety Director Michael Corcoran Jr. declined to say how or when the chief’s situation may be resolved.
“It’s still a personnel matter,” Corcoran said after the council meeting.
The jury believed Hudson’s contention that Demnitz busted him from the detective division in 2015 as retaliation for his contacting the Morris County Prosecutor’s Office with concerns about the chief working security jobs on town time. The prosecutor did not charge the chief with any wrongdoing. Town officials subsequently revamped policies to curb the chief’s freelancing.
Demnitz, who has been keeping a low profile, appeared before the council earlier this month to argue that such restrictions are unfair.
Council President Toshiba Foster said the settlement made more sense than pursuing an expensive and risky appeal.
“We could have wound up paying much more. If we can save the town some taxpayer money, I’m glad we were able to settle,” Foster said.
Councilman Robert Iannaccone, who is a lawyer, agreed.
“I think the town did a good job of handling the appeal and minimizing the cost to the town,” he said.
Corcoran’s position was created last fall to oversee police, fire and emergency management operations. In his statement, the mayor said Corcoran has taken steps to “improve departmental oversight and handling of personnel” to “prevent similar instances from occurring in the future.”
Those steps include starting a process to obtain accreditation for the police to ensure “best practices, policies, and greater accountability,” the mayor said.
“We trust that Director Corcoran will make the right decisions to resolve this situation and enhance accountability,” the mayor said.
Captain Darnell Richardson is serving as acting chief.