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Cromwell to appeal $5M award to mental health agency for 'discriminatory' actions

The Middletown Press - 7/5/2022

Jul. 4—CROMWELL — Following a more than $5 million federal judgment against the town last fall for "overt discriminatory practices" related to its purchase of a home intended to serve as a community-based residence for six men with mental health disabilities.

Because of these issues, the single-family house on Reiman Drive eventually closed.

"In response to the purchase, city officials in Cromwell staged a battle against Gilead and their clients through a series of overtly discriminatory actions making it clear that individuals with disabilities were not welcome, according to the Connecticut Fair Housing Center.

The nonprofit agency provides housing, clinical support and skills to help people who experience mental health conditions.

The jury awarded $5 million in punitive and $181,000 in compensatory damages for practices that led to the closure in October. Other plaintiffs named in the suit are Rainbow Housing Corp. and the Connecticut Fair Housing Center.

Municipal leaders are urging the public to weigh in on where they think the money should come from: the general fund or bonding for the money.

City leaders intend to appeal the decision, but they need to secure the funding to proceed, according to Councilor James Demetriades. Town leaders approved the full amount to be transferred into a restricted fund balance June 22 to satisfy the appeal bond requirement for the suit in the meantime, he added.

The account will gain interest in the meantime, Town Manager Anthony Salvatore said.

"It is in the town's best interest to prosecute the appeal vigorously," the resolution reads.

"If the money is not secured, then there would be no appeal," and Cromwell would have to pay the full amount, Demetriades explained.

"The jury's verdict sent a clear message to towns throughout the state of Connecticut that exclusion of group homes for people with disabilities violates federal law and will not be tolerated," Gilead's counsel, Relman Colfax, said in a statement.

The award is a significant one, Demetriades said. "It's a lot of money to transfer out of the general fund," he added, however, "we have a high and healthy fund balance so we're able to do that."

"Ideally, if the appeal is successful, it would mitigate the damages," Demetriades added. "Another danger we have is, if we're unable to get a $5 million bond, we would be unable to pursue the appeal ... which is the "best way to protect the taxpayers of the town."

Demetriades and Salvatore declined to talk further on details of the the appeal, citing ongoing litigation.

"We knew in October '21 that this case was lost. It was announced there would be an appeal back then," which was immediately filed, the town manager said.

"The judge wanted assurances that the money was safeguarded in the event there was a ruling against us and the money was accessible," he added.

Councilman Al Waters said the money would be placed in an escrow account in the meantime.

If citizens were to gather 200 or more signatures on a petition, the issue could go to a referendum vote, Waters said.

"In my opinion, the best place to put the $5 million at this time is the restricted fund balance while the case is under appeal," the town manager said.

Relman Law attorney Tara Ramchandani said her clients are waiting to see what the town does.

"A bond, or setting aside of funds, to pay the $5.18 million judgment is essential to ensuring that plaintiffs will receive their damages without further delay once they prevail on the appeal," she said.

It is unlikely an insurer would contribute to a punitive damages award, Ramchandani added.

"Judge (Victor) Bolden's post-trial ruling confirmed the soundness of the jury's verdict, and plaintiffs are confident the Second Circuit will uphold the jury's finding of $5.18 million in compensatory and punitive damages," she explained.


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