Former Guernsey Police Chief Wins Lawsuit, $300K Settlement Reached

A federal jury has awarded Guernseys former police chief more than $300,000 in her lawsuit alleging that her reports of misconduct within the towns government resulted in her firing.

Jim Angell

September 13, 20213 min read

Guernsey wyoming sign scaled
(Cowboy State Daily Staff)

A federal jury has awarded Guernsey’s former police chief more than $300,000 in her lawsuit alleging that her reports of misconduct within the town’s government resulted in her firing.

However, a federal judge in July ordered the town and former Police Chief Terri Van Dam to mediate a settlement of the lawsuit and all related issues, resulting in a settlement that was reached in mid-August.

Van Dam worked as a police officer for Guernsey for five years, the last year as its chief of police. She sued the town in April 2020 after being fired the previous January.

In her complaint, Van Dam said she had started an investigation on her own time in 2018 into allegations of misconduct involving town officials and employees. She alleged that she was fired in January of 2020 after sharing the results of her investigation with the state Division of Criminal Investigation and Federal Bureau of Investigation.

Van Dam kept the fact she had sent information to the DCI and FBI confidential, but shared it with the town’s attorney when she determined her town email account had been hacked and some email had been read. 

According to the complaint, the town attorney told the town council about the investigation and reports to the DCI and FBI on Jan. 7, 2020.On Jan. 15, 2020, Van Dam was fired by Guernsey Mayor Nick Paustian.

Van Dam alleged she was fired for exercising her First Amendment rights to freedom of speech by collecting evidence of and reporting illegal activity to state and federal law enforcement agencies.

“The town negatively impacted its own interest in efficient public service by attempting to cover up alleged illicit activity by terminating employees that would not get on the same plane as the bad actors,” the complaint said. “The town’s interest in covering up allegations of misconduct does not outweigh (Van Dam’s) interest in reporting what she perceived to be illegal conduct to outside agencies.”

A jury in U.S. District Court ruled that Van Dam’s reports to other law enforcement agencies were “a motivating factor in (the town’s) decision to terminate (Van Dam).”The jury also found that a Facebook post that was made by another person who Van Dam had spoken with was also a “motivating factor” in Van Dam’s firing.

The jury awarded Van Dam $325,175, but the town asked for a change in the damage award or a new trial, saying that she did not disclose the fact she had been hired as a police officer by another town in January of 2021, so her damages should be lower.

The town also argued that the calculations used to determine damages for Van Dam set the amount too high and that the damages should be limited to one year’s salary, $56,400.

However, Magistrate Judge Kelly Rankin ordered the parties to take part in mediation to settle the disputes.

“The court believes the parties should fully explore and consider settlement of these issues at the earliest opportunity,” Rankin wrote. “Early consideration can prevent unnecessary litigation of these issues.”

Although details are not included in the publicly available documents from the U.S. District Court, a notation was made that a settlement was reached on Aug. 17.

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Jim Angell