COURT REPORT SCOOP: What voters and taxpayers should know about the latest Lake Lure lawsuit

Guest Post: this article first appeared in Cops and Congress written by Annie Dance. Click here to check out her Rutherford County-based Substack.

Lake Lure faces a lawsuit from the municipal risk pool that provides its property and liability coverage, but voters heading into the November election cannot read the complaint explaining the allegations in the records available for this report. The Interlocal Risk Financing Fund of North Carolina, acting through its administrator, the North Carolina League of Municipalities, sued the town and Sedgwick Claims Management Services Inc. on Sept. 17 in Wake County Superior Court.

The docket lists claims involving contract, indemnification and money owed, along with a jury demand. The amount sought and the specific allegations against each defendant remain undisclosed in the available filings.The complaint and 10 supporting exhibits were provisionally filed under seal.

A public exhibit index supplies one notable detail: Two February 2025 emails concern “looking at the dam.” Other restricted exhibits include Sedgwick’s catastrophic-adjusting contract and four reports dated between October 2024 and January 2025.

Highlight added by Cops & Congress (public court file / NC Judicial Branch)

Those descriptions establish that dam-related correspondence accompanies the lawsuit. They do not establish whether the dispute concerns dam repairs, insurance coverage, claims handling or another issue. The fund’s own sealing motion says it does not believe the documents contain information justifying indefinite sealing. It nevertheless sought temporary restrictions while awaiting Sedgwick’s position on possible confidential or proprietary information. The supplied docket lists no order deciding that request. Provisional sealing is distinct from a judge’s approval of continued sealing.

The organizations involved have separate responsibilities. The North Carolina League of Municipalities is a member-governed organization representing cities and towns. It provides advocacy, municipal services and insurance administration. The Interlocal Risk Financing Fund, also called the Property and Casualty Trust, is the League-administered self-insurance pool. Lake Lure joined in July 2005, according to available public records.

Sedgwick is a private claims-management and loss-adjusting company. The public exhibit index identifies its adjusting contract with the fund. Town records show public money spent on the insurance arrangement. A ledger in the May 13, 2025, council packet records $159,198.03 in net expenses associated with the property and liability fund for the period labeled July 2024–May 2025. A separate League-administered workers’ compensation pool accounts for another $39,259.62. Together, the two pools account for $198,457.65 in net recorded expenses after credits.

These are accounting figures for the identified period, not lifetime cash-payment totals. The reviewed records do not establish separate totals for League dues or Sedgwick’s fees. Lake Lure is represented by Allen Stahl + Kilbourne. Attorney Thomas Martin “Marty” Benson accepted service for the town Sept. 24. The town scheduled consideration of the firm’s appointment for Feb. 27, 2026. Minutes published in the March council packet record approval of the appointment and cited a need for broader expertise in municipal law, property acquisition, and complex agreements.

The minutes describe reference checks, including a positive recommendation from Montreat’s town manager, a projected annual cost increase of about $7,000, and a 10% fee discount. Commissioner Jim Proctor opposed terminating the town’s relationship with William Morgan Jr., a motion that passed 2-1. The three commissioners present then unanimously approved appointing the new firm. The pending case enters public view as early voting begins Thursday, Oct. 15.

Mayor Carol Pritchett is seeking reelection. Kathy Tanner and John Edmonds Kozma are campaigning as write-in candidates for mayor. Four candidates are competing for two council seats: incumbent Jim Proctor, Friedrich Jaeger-Faber, Dave Lusk and Richard Sayles.

At the Oct. 1 candidate forum covered by Cops & Congress, Pritchett defended the town’s recovery planning and funding efforts, while Tanner and Kozma called for greater transparency and public participation. Dam and sewer infrastructure were central topics. Early voting ends at 3 p.m. Oct. 31. Election Day is Nov. 3.

The available public records do not connect the lawsuit’s filing to any campaign. The case records are available on the NC Judicial Branch eCourts website, case number 26CV035241-910.

The town has not issued any statement about the lawsuit.