ZURIK: New Orleans’ refusal to pay judgments leaves victims suffering

NEW ORLEANS (WVUE) - Angela Stewart remembers rushing to the scene of a crash back in 2003. A speeding police car, driving without its siren on, hit her 7-year-old brother Lance as he was walking near Charity Hospital.

“He flipped up in the air, out of his shoes, landed on the pavement, and he was in a coma (for) over a month and a half,” said Stewart.

She says her brother had to learn the basics all over again: How to walk, how to talk, the names of common items, and that he was left with brain damage.

Now 26 years old, Lance works a part-time job at a local Walmart, as part of a program to help people with disabilities.

“Lance is not the same,” Stewart said. “We really didn’t worry about the money. I just wanted my brother back, just wanted to have some type of normalcy.”

But the medical bills piled up. The Stewarts eventually filed a lawsuit against the City of New Orleans. In 2006, a judge awarded them $4 million. But 16 years later, they’re still waiting for the city to pay its debt.

“It was like, ‘Yeah, we’ll give you a judgment. Good luck getting it,’” Stewart said.

The Stewarts aren’t alone. In nearly 500 separate cases, the City of New Orleans owes more than $36 million in unpaid judgments. Four of those judgments date back to 1996.

The reason is an obscure provision in the Louisiana constitution that essentially allows state government entities to be sued and lose, but not pay the judgments.

The constitution says the funds can’t be seized and can only be paid out if the government appropriates the money. In other words, if the City of New Orleans doesn’t budget the funds for judgments, no judge can force the city to pay.

As a result, while Lance Stewart might be a millionaire on paper, for several years after the accident, he and his family were left homeless.

His attorney, Bob Manard says the decision not to pay the family also hurt Lance’s recovery. Without the money, they couldn’t afford to provide Lance with proper medical care.

“This boy -- he was a 7-year-old boy to a single mother living in the projects -- when his life was basically destroyed. And even though he had this big judgment against the city, they were living under a bridge for a few years. So, not only was he not getting care, but he was homeless,” said Manard. “Everybody knows how difficult it is to get doctors to take any case on Medicaid, much less a sophisticated brain damage case that requires a lot of expensive testing and things like this. But he couldn’t get that.”

In 2018, New Orleans paid the Stewarts and others just 10 percent of what they are owed. For Lance Stewart, that barely covered the medical bills.

“What’s ironic about it is that if you owed the city money, and you said, ‘Well, look, I’ll pay you, but can you wait 15 years, and then I’ll pay you 10 cents on the dollar?’ I mean, they’d laugh you out of court,” said Stewart.

The cases the city owes money for are wide-ranging. New Orleans also has refused to pay a contractually obligated amount to a company that helped the city recoup millions of dollars.

George White’s company Municipal Administrative Services, Inc. audits utilities. From 1996-98, he audited the former phone company Bell South and its agreement with the City of New Orleans. After the audit, the city sued Bell South based on the work and got about $33 million dollars.

In return for the savings, the city refused to pay White a dime for his work. White says the city owes him about $1.3 million. In 2005, a judge ruled the city owed Municipal Administrative Services, Inc. the money, but White still sits on a long list of unpaid judgments.

White estimates he’s spent $600,000 on legal fees. But he says part of the reason he continues to fight after 20 years is for the other people on the list, who also are owed money.

“I think part of me wanted to pursue this, also, for the voice of all of us that have been trying to do what’s right,” said White. “I understand how the world works. But if you do everything that’s right, at some point, you would expect the government to want to do the right thing.”

Over the years, White’s company has done work for about 100 cities across the country. He says New Orleans is the only city that hasn’t paid its bill.

Angela Stewart says while the city refuses to do the right thing for her brother, she also feels ignored by public officials since the accident. She says no one has ever contacted them.

“It’s not about the money. It’s about that nobody cared. Nobody cared that this cop ran over a child. Nobody cared that this child had brain damage. Nobody cared. And the only way it seems to make someone care is to let them know that we’re coming for your money,” said Stewart.

The city’s decision not to pay the money owed to the Stewarts left them with their bank accounts drained, unable to pay bills, and at one point homeless.

“I want the city to realize that people are really hurting here. And it’s not like we don’t love our city. We could have left the state, but we came back. We got jobs and pay taxes. We love our city, but at the same time, the city does not show the love back,” said Stewart.

The City of New Orleans sent Fox 8 a statement that says: “The City continues to make significant progress in reducing the number of unpaid claims on the judgment list. In addition to the yearly budget appropriation for the Judgment Fund, the City remains committed to identifying alternate sources of available funding to aid in addressing the backlog without negatively impacting the ability to provide essential public services.”

But according to budget documents, the city isn’t expending all the money it has in the judgment fund. In 2020, 2021, and 2022, the city budgeted $2 million to pay off judgments. So far this year, the city has only paid $146,000. In 2021, it paid $1.5 million, and in 2020, the city paid just $500 from the fund.

Regardless, the $2 million annual outlay isn’t enough money to ever pay off all of the judgments against the city.

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