A former municipal judge for Colleyville and Keller is suing both cities to recover employee benefits he said he is due.
Michael Newman was the municipal judge for Keller from 2007 until 2012, when Keller and Colleyville merged their municipal courts to save money. They were the first cities to merge municipal courts in Texas.
Newman was appointed judge and signed a contract Aug. 21, 2012, to serve a two-year term which paid $120,000 a year.
But just before the end of his term in September 2014, the Internal Revenue Service determined that Newman was an employee of the cities — not contract labor — according to a letter Newman received from the IRS.
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The letter said that Newman would be required to pay federal income tax as well as tax under the Federal Insurance Contributions Act.
Because the IRS ruled he was an employee of both cities, Newman said, he requested payment for benefits he should have received.
“And they refused,” Newman said. “I filed a lawsuit to recover benefits.”
The lawsuit, filed in Tarrant County on Sept. 23, indicates that the retirement, insurance and other benefits’ value is $150,000 to $175,000. He is seeking a lump sum payment.
But Colleyville and Keller said they met all contractual obligations to Newman, according to a statement from Matthew Boyle of the Irving-based law firm of Boyle & Lowry.
“It is disappointing that following the conclusion of his tenure, Plaintiff Newman is now seeking benefits and compensation well beyond and outside of what the cities were contractually obligated to pay,” the statement says. “The contract was clear — that Mr. Newman was to be paid a generous salary of $120,000 and that no other compensation or benefits were due. These cities take their responsibility as stewards for taxpayer dollars seriously and will not pay more than Mr. Newman was owed under the contract.”
The IRS determination “was not binding on the cities,” Boyle said.
Both Keller and Colleyville city councils have discussed the lawsuit in executive session multiple times, including during last week’s meetings.
Newman, who had also served as municipal judge for Burleson and Pantego, said that in his nine years as a municipal judge before 2012 he’d always been a city employee.
“I think it’s a classic example of misclassification of employees,” he said.
Sara Jane del Carmen is now the municipal judge for the two cities.
Mark David Smith, 817-390-7808