Supervisors might ditch bond company

Published 11:08 am Wednesday, April 30, 2014

Circuit Clerk Shelly Ashley Palmertree.

Warren County supervisors might seek another company to insure themselves, in light of their sour view of Western Surety following what they see as an all-out attempt by the company to protect its own interests in the tangled legal web involving the circuit clerk’s office. 

“I think we need to find a different vendor — immediately,” Board President Bill Lauderdale said as supervisors met informally Monday.

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Western Surety, a unit of CNA Surety, based in Canada, is a fidelity and surety bonding firm with accounts worldwide. When State Auditor Stacey Pickering and Warren County countersued Circuit Clerk Shelly Ashley-Palmertree in 2013 over $671,751.75 in excessive salary and questionable payments from 2006 to 2011, the company was named a defendant in the civil action.

Typically, local public officials are bonded by an entity chosen by the local insurance agency of their choice. Western Surety invariably is the choice due to market dominance.

If supervisors single out a company as their bonder of choice, it won’t necessarily bind other elected offices such as sheriff, assessor, and others to that company. However, the board hopes stances taken by CNA in the most recent round of testimony in the drawn-out civil case influence others in the public sector to make a similar switch.

District 5 Supervisor Richard George, who spent hours on the witness stand in Hinds County Chancery Court April 14 answering questions from CNA’s attorney, Ron Yarborough, indicated the stalwart insurer’s tactics have essentially made them an extra line of defense for the embattled clerk.

“That guy worked every way he could to get some sort of acknowledgement from us that we had not done our part in everything,” George said. “And, you sit and think about it, we paid you to cover this person to protect us. And she’s the one that’s accused of all this wrongdoing. How did we end up being at fault? We ended up being on trial.”

In August 2013, CNA refunded to the county $759.64 in premiums to cancel a $100,000 surety on Palmertree due to her legal problems. In between, the clerk posted a new bond, from United States Fire Insurance Company.

During the civil trial, which Hinds Chancellor Dewayne Thomas continued to October, CNA has sought to limit its exposure to any ruling that would prompt the company to take on any of Palmertree’s debts.

By statute, the state auditor must call on a public official’s bond when wrongdoing is suspected. In the Palmertree situation, that didn’t happen until 2013, when Pickering’s office did so after it answered her civil lawsuit. Issues with accounting practices in the circuit clerk’s office had been noted on official county audits dating back a decade.

In a separate criminal case, Palmertree is accused of inappropriately transferring funds from her office’s criminal and civil accounts to her personal account on two separate occasions in 2012. The amounts total $12,000. Attorney General Jim Hood is prosecuting the case. A trial date has not been set.