Masters settlement spares taxpayers, angers defendants

By Dan MacArthur
North Forty News

Taxpayers should not be affected by the $4.1 million Larimer County is paying to the man imprisoned 10 years for a grisly murder he later was cleared of.

The settlement approved unanimously by the county commissioners resolves Timothy Masters' federal lawsuit alleging that prosecutors violated his civil rights by conspiring to convict him for the murder of Peggy Hettrick.

Her mutilated body was discovered in 1987 in a field bordering South College Avenue. The body was within sight of the mobile home where the then 15-year-old Masters lived with his father. Masters from the outset was considered a prime suspect but was not arrested for the crime until 1998. He was convicted the following year and sentenced to life in prison.

Masters was released following a 2008 appeal. An outside judge dismissed the verdict and prison sentence after new genetic-testing technology implicated another suspect. No one else was ever charged and Hettrick's murder remains unsolved.

Masters' attorneys subsequently sued all associated with his case for wrongful prosecution, conviction and imprisonment. Defendants included the 8th Judicial District, the former and current district attorney and former prosecutors Jolene Blair and Terence Gilmore – now district court judges. Masters also sued the city of Fort Collins, the police chief and police detectives.

The $4.1 million settlement makes no admission of guilt. It applies only to the defendants associated with the county. The settlement does not affect Masters' separate lawsuit against Fort Collins, which is still pending.

The county's insurance carrier will foot $3 million of the settlement cost. The remaining $1.1 million will come from the county's self-insurance fund reserved for workers' compensation and liability clams. Those funds are accumulated over time from assessments paid by various county departments.

Budget manager Bob Keister said there currently is $5.5 million set aside for those purposes. Barring any exceptional claims, he said, the county should be able to gradually replenish the self-insurance fund without any reductions in county services.

The commissioners repeatedly characterized the settlement as an onerous necessity to avoid much greater damage should the county proceed to trial and lose. Then, they maintained, the court could mandate a tax increase to pay a potentially greater judgment.

"I think all of us are frustrated by this decision," said Commissioner Steve Johnson.

"The right thing to do is to protect the citizens of Larimer County," he continued. "I'm not willing to gamble and risk that tax increase."

"This is a pragmatic business decision for the county," said county manager Frank Lancaster. He noted that the county also negotiated the settlement on behalf of the judicial district and its personnel. Although technically within the purview of the state, the county is responsible for funding the court system.

The county's intervention evoked a severe rebuke from attorneys representing Gilmore and Blair, who, they said, always objected to any settlement. District attorney Larry Abrahamson and former district attorney Stu VanMevern also protested the settlement. Abrahamson was not in office at the time of the Masters case but was included as a defendant because of his current position.

The counsel for Blair and Gilmore said the former prosecutors never got a chance to present their side of the story because of ethical prohibitions on discussing active cases.

"We had just begun to fight and would have prevailed in this case," insisted Kevin Kuhn, the Denver attorney representing Blair.

"Everything she did in this case was driven by one goal – to fairly prosecute Tim Masters," Kuhn said. "She did not violate Mr. Masters' constitutional rights."

"We believe very strongly if the evidence had come out, Mr. Gilmore would prevail also," concurred his attorney, Josh Marks.

In a prepared statement, the commissioners also agreed that the county would triumph and praised the district attorney's office for handling the Masters prosecution with "the utmost professionalism and competence."

But they maintained the settlement was prudent "to protect the financial interests of the county and eliminate any remotely possible risks, such as a judgment in excess of available insurance and available reserves and the need to impose a special mill levy on property owners/taxpayers to pay the excess."

The amount of the settlement was determined with the assistance of a third-party mediator. County attorney George Hass said it would be apportioned between Masters and his attorneys as directed by Masters.

In addition to its $1.1 million share of the settlement, the county also spent $400,000 from reserves to fund legal expenses.

Despite approving the settlement, the commissioners said they did so knowing that an independent prosecutor found that Blair and Gilmore "complied with all applicable standards."