Finances factor into settling lawsuits
In the face of recent lawsuits against the school, Utah State University spokesperson Amanda DeRito explained where university settlements come from.
According to a settlement obtained by a Utah public records request, Patrick Maddox, a former USU football player, signed an agreement on July 12 with USU that said he would receive $150,000 by dismissing a lawsuit against the university and its head football coach Blake Anderson.
This settlement comes almost a year after the university signed another settlement agreement on Sep. 15, 2022 with Kaytriauna Flint, a former USU student. According to her settlement, also obtained by a Utah public records request, in exchange for Flint’s dismissal of her lawsuit against the university, she would receive a $500,000 payout.
With such high payouts, these settlement agreements might have some people wondering what standards determine the amount of money the university pays in settlement agreements and where the money comes from.
In email correspondence with The Statesman, Amanda DeRito, USU’s associate vice president of strategic communications, said the university does not follow a set standard or rubric for deciding whether to settle or what a settlement value should be. She said each case is separately evaluated, taking into account a number of factors.
“Litigation presents a great deal of uncertainty,” DeRito wrote. “There are many direct and indirect costs for those involved, including requiring employees to divert their time and energy to responding to discovery requests and preparing for and participating in interviews and depositions instead of carrying out their normal operations.”
She said because of these costs involved, parties often compromise on a financial resolution.
“In doing so, the parties are not changing their position as to why they ended up in litigation; that is, they are not admitting fault or withdrawing their complaint. They are simply agreeing to resolve the matter and move forward,” DeRito wrote.
When a case is settled and an amount of money is agreed on, DeRito said settlements are paid through the State of Utah’s risk pool.
“The state risk pool is essentially Utah’s insurance pool,” DeRito wrote. “As a state entity, USU is covered by it.”
According to the Utah Division of Risk Management, all public institutions of higher educations, all state agencies, all public school districts and many public charter schools are insured through the state risk management fund.
Utah State Legislature Code Chapter 63A-4 says the state fund covers “property, liability, fidelity and other risks as determined by the risk manager in consultation with the executive director.”
Chapter 63A-4 states one way the risk management fund receives money is through appropriation by the legislature. Another is through any insured loss or loss expenses paid by insurance or reinsurance companies. These credits are deposited with the state treasurer.
More information on the Risk Management Fund can be found at le.utah.gov.
“USU is always mindful that we are a steward of public funds and takes great care to prevent and resolve cases,” DeRito wrote.