At tonight’s Demorest City Council meeting, Attorney Joey Homans informed the council of an offer from the insurance company on the City’s claim for the missing money from Demorest’s water fund.
The offer from Glatfelter, the insurance company, is for the policy limit for employee theft and theft on-premise of $20,000. The City has been in negotiations with the insurance company over the more than $600,000 missing from the City. Homans laid out the 4 items with which the insurance company takes issue.
- The insurance company feels a case can be made that they could rescind the policy entirely based on false representation by the then Mayor, Malcom Hunnicut, and then City Manager, Juanita Crumley. Hunnicut and Crumley signed the application for the policy in 2006 and stated that monthly reconciliations were being made and that only three people handled money in the office. The investigation made by the City’s investigator, Eason Investigations, clearly “revealed that cash receipts were never reconciled to the City’s general ledger” and further, “at least 4 (employees) were authorized” to handle cash and “in fact, numerous individuals handled, deposited and otherwise had access to the City’s money,” states the letter from Gregory Veal, attorney for the insurance company.
- The insurance company feels that the City’s claim is “time-barred.” The insurance company quotes three dates, August 6, 2013 when the City claimed “proof of loss” and then the January 2013 date when the City actually determined that money was missing and finally, the July 29, 2013 date when then City Councilwoman, Florence Wikle demanded an outside audit. The insurance policy has a two-year time limit and according to the insurance company, “using any of these dates” the time limit “has expired.”
- The insurance company asserts that the “City cannot establish a covered loss.” The insurance company’s policy covers theft from employees and from theft or disappearance on premises. According to the insurance company, since no one has been charged and that “the money just as likely could have been taken by Mr. Hunnicut as by Ms. Crumley” then the money could have been taken by an official that is not covered under the policy.
- The final argument laid out by the insurance company is that all of the instances of missing money were actually ‘just one occurrence.” The limit for one instance by a covered employee theft would be $10,000.
Homans recommended “reluctantly” to the Council that they accept the offer from the insurance company. “I cannot in good conscience recommend you to pay me $50,000 in order to recover possibly nothing,”said Homans. He told the Council that there were some possible valid arguments to the assertions made by the insurance company, but that the misrepresentation charges would be difficult to overcome.
A visibly deflated Council voted to accept the offer. Mayor Rick Austin stated, “I am deeply saddened that the citizens of Demorest lost tonight on two fronts. First by the actions of one or more persons who took the money from the citizens. Secondly by the inaction and lack of oversight by the city administration during the years that the money was taken.”
For a full report on the investigation and the timeline of the events to date, please read the following link. Now Habersham will continue to follow the story to its final conclusion.
Updated 10/7/25 @ 7:30am
