Carthage, Dagnan reach $275,000 settlement in wrongful termination suit
CARTHAGE, Mo. — A wrongful termination lawsuit filed by the former city manager of Carthage against the city last year was settled Tuesday at a cost of $275,000 to the city's insurance carrier.
The city announced in a statement posted on its website after a closed meeting of the council Tuesday that the lawsuit had been settled and the city's portion of the cost was its $1,000 deductible.
The city released the settlement and its terms Wednesday after a Missouri Sunshine Law request was filed by The Joplin Globe.
The settlement said the city, through its liability insurance carrier, Midwest Public Risk, would pay Greg Dagnan $275,000 with $136,948.53 going to Dagnan and $138,051.47 going to his attorney, Aaron Hadlow, from Aurora.
As part of the agreement, the city makes no admission of wrongdoing.
The settlement also says the city agrees to waive all claims against Dagnan 'including but not limited to recoupment of the severance monies paid by the defendant to the plaintiff at the time of the plaintiff's separation of employment with the city on or about June 3, 2024.'
At that time, Dan Rife, then the mayor, ordered the city to pay Dagnan three months' salary, or $27,427.20 in severance, the amount agreed to in a letter signed by the Rife and Dagnan at the time of his promotion to city administrator.
Dagnan spent 13 years as Carthage police chief before being appointed assistant city administrator in 2021 and then city administrator with the sudden retirement of longtime administrator Tom Short in 2022.
Dagnan on Wednesday told the Globe his attorney advised him not to comment. Hadlow did not return messages seeking comment Wednesday.
Putting it behind them
Carthage Mayor Bren Flanigan told the Globe in a telephone interview Wednesday that the settlement was a step toward putting the chaos of the past year in the rearview mirror.
He said the vote was unanimous to sign the agreement after discussions with the attorneys from Midwest Public Risk in Tuesday's closed session held prior to the regular City Council meeting.
'I think it was brought up several times last night by council members representing their ward, they had been told we need to get beyond this," Flanigan said. "There was passionate debate and good solid debate, and the council decided what they wanted to do, and the result was they told me sign the agreement.'
The City Council attempted to fire Dagnan at its April 9, 2024, regular meeting — the first meeting after the April 2, 2024, municipal elections brought in five new council members. Four of the new members were supported by a political action committee called Carthage Citizens United. That group formed in late 2023 in the wake of a dispute between the council and the board of directors of city-owned Carthage Water & Electric in June 2023 over documentation of salaries of utility workers.
Rife initially resisted the council's efforts to fire Dagnan and retained him as city administrator until the end of May 2024, following the advice of an attorney representing Rife in the effort to impeach him.
Dagnan filed his lawsuit claiming unlawful retaliation and wrongful termination May 17, 2024, naming the nine council members at the time of his filing and Carthage Citizens United as defendants.
Flanigan noted that most of the charges brought up in Dagnan's suit had been denied by the court judge, including those against Carthage Citizens United.
'I think it was right at a year ago Dagnan named 11 defendants and was seeking 36 separate allegations of violations that those 11 defendants had committed,' Flanigan said. 'In the course of the last year, 35 of those 36 have been dismissed or gone to court and decided against Dagnan."
Flanigan said an attorney advised the City Council on Tuesday that dismissal of any remaining claim by Dagnan could take up to two years "and a lot of money, and the council I think wisely decided we're just going to get on with it. That's what they voted to do.'
Matthew Gist, the attorney hired by Midwest Public Risk to represent the city, told the Globe he couldn't comment on the case when contacted Wednesday.
2 letters
According to the statement released by the city on Tuesday, Midwest Public Risk told the council that it could have rejected the settlement offer but that if it did, the city could have been 'responsible for all further legal costs and any additional settlement amounts.'
Midwest Public Risk, a not-for-profit insurance pool, had sent the city two letters regarding Dagnan's lawsuit and the city's liability insurance costs since Dagnan filed his suit.
• In a letter dated Oct. 8, 2024, Midwest recommended that the city 'immediately adopt a formal policy of obtaining legal advice prior to making employment practice decisions, especially terminations by the council.'
The letter also said the city could be subject to sanctions, 'which may include a deductible increase or even termination of your membership in Midwest Public Risk. Our goal is to ensure that all members are adequately managing risks, as this benefits both the city and the broader membership.'
That letter cited the Dagnan lawsuit as a factor in its recommendations.
• In a letter dated March 24, 2025, Midwest Public Risk announced it was raising the city's employment practices liability deductible from $1,000 in the 2024-25 fiscal year to $50,000 in the 2025-26 period and raising the law enforcement liability deductible from $1,000 to $5,000 over the same period.
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