Clerk civil case to last about six more months

Published 12:36 pm Tuesday, March 17, 2015

It could be another six months before all legal processes are exhausted and a judgment entered against jailed ex-circuit clerk Shelly Ashley-Palmertree in the two-year civil case involving more than $1 million in questionable financial activity, Warren County’s attorney in the case said Monday.

In January, Palmertree dropped the original complaint in the case she filed March 20, 2013 in Hinds County Chancery Court against Warren County and State Auditor Stacey Pickering. At the heart of the case is whether she owes excessive salary and subcontractor payments to her father and predecessor in office, Larry Ashley. The county and state later countersued, then engaged CNA Surety, the parent firm of Western Surety Company, which had bonded Palmertree for most of her time in office. The case covers activity from 2006 to 2012, with claims against her totaling $1.04 million.

Friday, the worldwide public surety bond provider filed two conclusions for Chancellor Dewayne Thomas — that either the company should be held liable for none of the stated debts due to not being notified until 2013 about active investigations into her office or that they be liable only for a $50,791 chunk of money listed in state audits for FY 2006, when state auditors first made clear they were actively trying to recover money from the clerk.

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The filing met a deadline Thomas set in January, and the county has until March 30 to respond to the company. After that, attorney Marcie Southerland said, it’s a game of comparisons with other cases as to when Thomas will issue a final judgment.

“There’s really one issue that he has to decide — and it’s whether Western Surety is liable,” Southerland told county supervisors Monday. “But, there will be a judgment that will be done in favor of the county and state.”

Southerland said lawyers for the Attorney General’s Office, who have prosecuted the civil case on behalf of the Office of the State Auditor, estimate a six-month time until a judgment is entered and agreed upon. That estimate, she said, is based on the case against former Southaven Mayor Greg Davis, sentenced last summer on felony convictions of embezzlement and fraud, though the two cases involved different sets of facts.

Supervisors hoped her lawyers’ dismissal of her original case and her going to jail on the criminal charges end up being a strong enough message for the chancery bench.

“Does her admission of guilt help this decision?” District 2 Supervisor William Banks asked Southerland.

“It helps,” she said, adding lawyers for the state in the civil case have “not found a law that would let Western Surety out of this.”

Palmertree is serving a five-year prison sentence in the Central Mississippi Satellite Facility for women in Flowood for embezzling $12,000 from her office’s civil and criminal accounts in 2012. She faces more criminal charges that allege she embezzled $100,000 from her office’s restitution fund in 2013 and early ’14. She was removed from office last May by county supervisors after OSA investigators turned up evidence she had declared residence in Canton in 2013.

Trial on the added charges is set for April 6 in Warren County Circuit Court. Southerland, who is working only the civil case for the county, said the hope is that funds from a short-lived second bond, from Raleigh, N.C.-based Surety One, that Palmertree secured in the summer of 2013 after Western Surety dropped her will kick in to repay funds at issue in the criminal case.

“Hopefully, it can be a bond used toward criminal restitution,” Southerland said.

Court-ordered mediation talks in the civil case after the first three-day run of testimony in December 2013 broke down a month later, reportedly due to the bonding company’s hesitance to cover any of the debts. Three more days of testimony in April 2014 included an expert accounting witness for the clerk and current and former investigators with the auditor’s office before Thomas continued the case to this past January. Palmertree then withdrew her complaint on the second day of proceedings.