TRAVERSE CITY — Traverse Area District Library officials settled a lawsuit with fired librarian Margaret Kelly for $5,000, but they would not discuss whether Kelly received additional money from the library’s insurance company.
Kelly, 65, worked for the library for 16 years before library Director Metta Lansdale fired her in January 2011. Lansdale had taken over as library director in 2009 and Kelly alleged she targeted older employees. Several retired and one wrote a scathing letter to the board about changes that came about under Lansdale.
Kelly filed suit in January 2012 and alleged civil rights violations because of age discrimination, defamation, and intentional infliction of emotional distress. Library board member Thomas Kachadurian also was named in the suit.
“We came to an agreement that makes everybody happy and that’s it,” said Kachadurian, now library board president. “I have nothing else to say about it.”
Settlement documents obtained by the Record-Eagle through the state Freedom of Information Act stipulate that no party to the agreement will discuss anything related to the lawsuit, or disparage, malign, or make any further legal claim against any signer of the agreement.
“The parties have resolved the matter and are moving forward” is the only statement library officials said they were authorized to make.
The contract specifies the $5,000 represents costs incurred by Kelly’s attorney.
Under another section of the lawsuit, wording states that Allied World, a Bermuda-based insurance and reinsurance company, retains the right to set off any remaining payments due Kelly “under the terms of this Agreement or any other agreement” should she breach the settlement.
Lansdale declined to comment when asked if the library’s insurance carriers supplied any additional compensation to Kelly.
Lansdale said in a response to a second FOIA request the lawsuit cost the library $10,000, the amount of its insurance deductible. Any other costs beyond the $10,000, including additional attorney fees, were paid by the insurance company.
Kelly’s attorney, Jay Zelenock, declined to comment.
An additional payment made to Kelly by the insurance company without the board’s knowledge or documentation would be unusual, said Robin Luce-Herrmann, general counsel for the Michigan Press Association.
“It’s also fair to say over the years we have seen a number instances where public bodies entered into settlement agreements and tried to keep them confidential,” Herrmann said. “The $5,000 seems really low for a case that has gone this far, but obviously we don’t know everything that is going on.”
The settlement and gag order also cover Terry Phipps and Anna Vidal, though neither worked at the library or were parties to the lawsuit. Phipps was Kelly’s boyfriend and Vidal worked at the Royal Oak Public Library when Lansdale was director there. Neither received compensation under the settlement that both signed in November 2012.