Township, Costello settle lawsuit

WEST MILFORD — The township council has accepted a $110,000 settlement offer from former police Chief Paul Costello Wednesday night, settling a lawsuit that has dragged on for over a year where the former chief claimed he was owed over $241,000 by the township for accrued sick, vacation and compensatory time off. This settlement is in addition to the $91,000 payment made to Costello in April, 2011, bringing the total amount paid to Costello to just over $200,000.
The $91,122.24 paid in April, 2011, included 280 unused vacation hours for 2009 and 2010 totaling $25,541.84; 280 unused vacation hours for the years prior to 2009 totaling $24,261.20; and 480 hours of compensatory time totaling $41,419.20.
Costello contended he was owed an additional $150,214.76, beyond that $90,000, which included vacation, comp and sick time along with a 3 percent pay raise for 2010. A settlement was previously proposed but the council took no action on a resolution back in May, 2011.
Costello resigned from the West Milford Police Department on July 31, 2010 after 35 years on the force. He left without any notice to the township because of pending legislation at the state level that would have cost him most of the accrued compensation coming to him.
The township contended that because Costello left his position without a 14-day notice as required by his contract, he was not entitled to termination compensation.
Costello’s attorney, Damian Shammas of Morristown, said the township denied Costello what his accrued sick leave because of his failure to provide a 14-day notice before retiring. He said there was nothing in Costello’s employment agreement specifying that. The township disagreed.
Costello filed an amended complaint alleging that Mayor Bettina Bieri interfered with his employment agreement. That complaint was dismissed in its entirety by the Federal District Court. Bieri said she did not always agree with Costello when he was chief, but dismissed the suit’s claim that this is a personal matter.
In a statement Thursday, Bieri said she is pleased the matter is over but thought the township had a strong case.
“Although I am pleased the matter has come to a conclusion, I disagree with the council’s approval of this settlement,” Bieri said. “In 2010, Mr. Costello requested that I approve his separation compensation of nearly $250,000. I refused. Although the township did realize a savings by paying him about $40,0000 less then he had originally demanded, I believe the township had a stronger case and would have ultimately prevailed, likely reaping additional savings plus reimbursement of attorney fees.
“I also believe that passing the resolution without any public notification and without placing it on an agenda unnecessarily defied transparency and is a great injustice to the public, especially for a highly publicized and controversial matter of litigation.”
A phone call to Shammas, Costello’s attorney, was not returned as of press time.
Wednesday night, the council authorized its labor counsel, David Corrigan, to sign the settlement agreement on behalf of the township, ending this long chapter in the township's history.