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Municipal Agreements with Contract Insurance Agencies are Public Record

Westmoreland County Housing Authority (WCHA) appealed a 2001 order of the Commonwealth Court of Pennsylvania requiring them to disclose a settlement agreement to the Tribune Review Publishing Company (Tribune) under the state's Right to Know Act (Act). The WCHA claimed the settlement was a private document between its insurer and another party. The court ruled the document was "public" and subject to inspection because public funds were involved.

Former WCHA employee Mary McCollough filed a federal civil rights complaint in 1999 against the WCHA and its director, Leonard Paletta, alleging gender discrimination. The Housing and Redevelopment Insurance Exchange (HARIE) represented the WCHA in the matter with full and unilaterally endorsed authority. McCollough and HARIE settled in 2000 for an undisclosed amount of money. The Tribune filed this action when the WCHA refused to disclose the settlement agreement. The court ordered disclosure and the WCHA appealed, claiming they were not a party to the agreement. They argued that, even if the settlement was a public document, its disclosure was exempt within the prejudice of reputation/personal security clause of the Act. They further argued that they did not pay the proceeds and were not secondarily liable in the event of a breech, and that HARIE was not an agency by law.

The Second Division held that the settlement agreement obligated the WCHA to disburse public funds even if through HARIE, and was a public record subject to inspection. The court held that HARIE was a licensed reciprocal insurance company that had full authority to act on behalf of the WCHA, and that Paletta was both a member and officer of HARIE's Board of Directors. It was determined that under section 1(2) of the Act's exemption clause, the phrase "personal security" did not mean "private security," and that the record was subject to public inspection when the complaint was filed.

The court's decision was subsequently affirmed by Pennsylvania's Supreme Court on Oct. 1, 2003. See: Tribune Review Publishing Company v. Westmoreland County Housing Authority, 795 A.2d 1094 (Pa. Commw. 2002), aff'd, 833 A.2d 112 (Pa. 2003).

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Related legal case

Tribune Review Publishing Company v. Westmoreland County Housing Authority