Old disputes die hard at the Connecticut Lottery Corp. Here is the story of one of them.

A bitter legal dispute between the CLC and one of its former top officials was on the verge of being resolved 2½ months ago. The opposing parties signed off March 10 on truce terms ranging from a $205,000 settlement price down to the exact wording of a script that would be read to any news reporter who asked about the case.

Signing a sheet of paper outlining the settlement terms were lottery CEO Greg Smith and ex-CLC security director Alfred DuPuis. The latter had spent most of 2019 in quasi-judicial administrative hearings to determine whether he should be compensated for retaliation he claimed he'd suffered for blowing the whistle on problems at the CLC dating back five years.

All that remained was for the lottery's board of directors to approve what its paid lawyers and its $207,000-a-year CEO had agreed to.

But a month went by, and then two months, with no action by the board and no word about what it might do. Finally, on Wednesday, Jim Shea, the CLC-retained lawyer from the firm Jackson Lewis, called DuPuis' lawyer, Eric Brown, to tell him the "board rejected the settlement," Brown said.

Now Brown says he'll try to get a Hartford Superior Court judge to order that the settlement take effect, without the lottery board's approval.

However, if that unusual move fails, it's on to legal briefs and a final ruling in DuPuis' whistleblower case. Likewise, Brown would continue moving forward with a parallel lawsuit that DuPuis has pending Superior Court against the lottery and two of its ex-officials — an action that also would have been dropped under the March 10 settlement.

Brown said both cases could cost the lottery more than $1 million, combined, if things go his client's way. Even if they don't, Brown said the lottery's legal costs in a successful defense might approach the $205,000 it could have paid now to resolve the cases.

No public explanation has been given for board's rejection of terms that its own CEO agreed to.

The CLC's director of public relations and social media, Tara Chozet, said, "We are not commenting on pending legal matters."

Irregularities and improprieties

The high-profile, quasi-public lottery agency, which raised $370 million in state revenue last year, has spent lots of time and money on several cases of litigation in recent years.

Perhaps the most prominent was the tumultuous series of hearings throughout 2019 in DuPuis' whistleblower case, presided over by Michele Mount, chief referee in the state Commission on Human Rights and Opportunities' Office of Public Hearings.

DuPuis claims he is owed financial compensation because of the CLC's retaliation against him for blowing the whistle on irregularities and improprieties in the 5 Card Cash game, which had to be shut down in 2015 because of fraud by lottery retailers, a number of whom were arrested.

He says the retaliation manifested itself early 2018, when he was informed that he faced discipline for alleged "gross neglect" over a million-dollar error made by his subordinates in the New Year's Super Draw on Jan. 1 that year. He was put on a brief paid leave, but then took time he had coming and never returned to work, retiring late that year. He claims it was his role in reporting problems with 5 Card Cash, not the Super Draw, that brought on his problems.

Meanwhile, in a separate legal action, DuPuis is suing the lottery corporation and two of its former high-ranking officials, ex-Vice President Chelsea Turner and ex-human resources director Jane Rooney, seeking unspecified damages for the "false and defamatory statement" that DuPuis had "acted with gross neglect in the execution of [his] duties."

Under the now-rejected March 10 settlement, DuPuis would have dropped both that lawsuit and the whistleblower case.

The "terms sheet" for the settlement also had non-financial provisions, including DuPuis' and lottery executives' agreement not to disparage each other.

It also said both sides would "agree not to seek publicity, but upon request from the media, will make the following statement and only the following statement:... 'The CLC and Mr. Dupuis have resolved their differences and ended their dispute without admitting the claims or defenses of the other. The CLC thanks Mr. Dupuis for his many years of dedicated service.' "

Judge's order sought

The March 10 settlement document was included by Brown as an exhibit with a May 17 motion that he filed as part of DuPuis' pending lawsuit against the lottery, Turner and Rooney.

In that motion to "enforce settlement agreement," Brown requested a court order that the March 10 settlement be put into effect, as agreed by DuPuis and Smith, without the lottery board's consent.

"Under the law the agreement is enforceable. The court has the authority to enforce," Brown said, adding that "it should do so while simultaneously entering judgment in the plaintiff's favor based on the documented terms of the settlement."

The settlement terms sheet called for "payment by CLC in the amount of $205,000, apportionments to be determined, but not more than 50%... to wages, some percentage of which shall be subject to lawful withholdings. This amount is subject to CLC board approval."

Brown interpreted that language to mean that the "amount" subject to board approval is not the whole $205,000, but "only of the apportionment of the settled amount... between wages and non-wage damages."

No court hearing has been scheduled on Brown's motion.

If Brown doesn't get anywhere with it, then the whistleblower proceeding and the lawsuit against the CLC, Turner and Rooney will presumably run their courses.

In the whistleblower proceeding, post-hearing legal briefs had been scheduled for filing by May 30. But Brown said now he and Shea have agreed to ask for an extension to June 30 to file them.

He said he didn't know how many months it would take the hearing officer, Mount, to issue a ruling after receiving the legal briefs.

Problems breed problems

DuPuis' difficulties have spawned other problems for the lottery. For example, as the whistleblower case progressed in July 2019, there came an unwelcome surprise: Turner, then still working as lottery vice president, testified at one of the DuPuis hearings that she had contacted the FBI around 2014 with suspicions of wrongdoing by Frank Farricker, chairman of the lottery board at the time.

FBI agents initiated an investigation during which Anne Noble, the lottery's president/CEO at the time, secretly recorded at least one conversation with Farricker, using a listening device concealed in an eyeglass case.

The FBI investigation was quickly shut down for lack of evidence. But Turner's revelation of that federal probe prompted the lottery's current CEO, Smith, to suspend her with pay later in July 2019 from her $190,000-a-year job.

Turner never returned to work, using up leave time until she resigned earlier this year to take a job in Massachusetts for less pay. She now has a lawsuit pending against Smith and the lottery corporation claiming she was defamed, damaged and unjustly treated.

Meanwhile, Farricker filed a state Superior Court lawsuit last December against three past lottery officials, including Turner and Noble, claiming defamation and intentional infliction of emotional distress.

The pending lawsuits by Turner and Farricker may be complicating any decision by the lottery board on whether to accept the settlement of DuPuis' cases, Brown suggested in an April 27 email to Shea — one of several such communications between the lawyers that Brown included as court exhibits with his May 17 motion.

"I have heard a rumor that the CLC will not sign off on the [DuPuis] settlement until they settle the Farricker and Turner cases," Brown wrote. "I really hope that isn't true."

On April 30, Brown wrote to Shea, "Hi Jim: Based on our phone call earlier in the week, I am expecting to hear from you regarding the CLC's position on the settlement terms by the end of the week. If the Board continues to fail or refuse to take action, I will proceed with a motion to enforce the settlement agreement early next week.

"It is unconscionable to me to believe that the parties, including you and the insurer, participated in an expensive mediation in good faith only to see these detached members of the board disregard our hard work and effort. Neither I nor my client will continue to tolerate their arrogant behavior."

On May 6, Shea emailed Brown, saying, "There is a meeting tomorrow. I believe this is an agenda item, but I haven't looked to confirm that. That's really all I know. I let the client know your position last week."

No action was taken on the proposed settlement at the board's May 7 meeting.

On May 17, Brown filed his motion forcing the issue by asking the judge to intervene. Three days later, on Wednesday, Shea gave him the news that the settlement had been rejected.