The former town manager of Old Orchard Beach has settled his wrongful-termination lawsuit against the town.

No details of the agreement between the town and Mark Pearson have been released. Town councilors voted 7-0 Tuesday to approve the settlement after talking about the terms in a closed session last week, Town Manager Larry Mead said.

The settlement came out of a mediation session held April 29 as part of the claim process in York County Superior Court, Mead said. Now that the council has approved the terms, attorneys for both sides are finalizing documents to formally settle the case in court.

Pearson was ousted in March 2013 after months of political turmoil in town and a 4-3 vote by the Town Council to terminate his contract. He filed his lawsuit in early April 2013, saying the council had violated his contract, the town charter, and the state and federal constitutions by voting to terminate his contract without cause.

Mead would not discuss details of the settlement, at least until the documents are filed. “Under the conditions of mediation settlements, the terms are confidential until such time as the agreement is finalized,” he said.

It’s not clear whether the settlement agreement will include any language that could limit public disclosure of the deal.


“The council’s decision to support the proposed settlement was made out of consideration for the potential financial exposure to the town if the litigation were to go forward to trial,” said a written statement issued by the town.

Pearson’s attorney, John G. Richardson, confirmed that the settlement has been reached but said he could not provide any details.

Pearson, who started his job in February 2012, was Old Orchard Beach’s fourth manager since 2003. His termination for undisclosed reasons prompted one residents group to start a petition drive to force a recall vote on each of the four councilors who voted to fire him. A second group responded with a petition drive to recall the other three councilors.

In June, all but one of the seven councilors was recalled in a divisive election.

The only councilor who survived the recall, Vice Chairman Bob Quinn, participated in the mediation with Pearson, representing the town along with Mead.

“The mediation process is designed to make all parties involved in litigation aware of the advantages and disadvantages of settling litigation before trial,” the town’s written statement said. “The proposed resolution was reached in consultation with the town’s litigation counsel and with the town’s insurer. All parties agreed that the terms of the proposed settlement discussed at the mediation would be held confidential.”

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