CLOSED SESSION DEAL REACHED.

Byline: Angela M. Lemire Staff Writer

SANTA CLARITA - The Castaic Lake Water Agency board on Tuesday night struck a compromise with director Ed Dunn on his attending closed meetings that discuss his wife's ongoing lawsuit against the agency, putting to rest a six-month stand-off that nearly provoked a messy legal battle.

For the first time since August, Dunn recused himself from a closed session involving the lawsuit brought by his wife, Joan Dunn - which seeks to reverse the CLWA's purchase of Santa Clarita Water Company - after the board agreed to discuss the litigation last on its agenda, in closed session, so Dunn would not miss other important matters. Dunn also agreed to submit a nonbinding memorandum of understanding that would establish the same compromise for future closed sessions.

``It's encouraging. I hope it finally is resolved,'' board President Bill Cooper said Wednesday. He added, ``We hope Mr. Dunn will continue to hold up his end of the agreement, and we won't have to pursue litigation (against director Dunn).''

``I'm satisfied and I feel good the agency and the directors didn't have to go through all that,'' Dunn said. ``Quite frankly, I was surprised the board (on Tuesday) went that route.''

With director Mike Kotch dissenting, a board majority last week voted to use legal force to ban Dunn from closed meetings that discuss his wife's lawsuit, after his repeated demands for the past six months that a court order be used to force his recusal.

But the legal battle was expected to become complicated, as it remained unclear whether the matter required civil or criminal legal action, and whether state law prevented agency funds from being used to file suit against a director.

Joan Dunn, joined by Jackie Bettencourt, Santa Clarita City Councilwoman Jill Klajic and Lynne Plambeck, a local environmentalist and vice president of Santa Clarita Organization for Planning the Environment (SCOPE) - filed suit against the CLWA last summer to block the wholesale water agency's purchase of the Santa Clarita Water Agency, a local retailer. The lawsuit was rejected in Superior Court and the sale went through, but the plaintiffs have appealed the initial court ruling.

CLWA officials wanted Ed Dunn barred from closed sessions, they argued, because defense planning sessions for the lawsuit were not productive in his presence. Other board members said a conflict existed because he stood to benefit financially if a lawsuit settlement reimbursed his wife for legal fees.

But Dunn argued that no conflict of interest existed by his attending the closed sessions because he was sworn to keep the discussions confidential and no monetary gain was at stake.

And in a Feb. 13 letter to the CLWA's legal firm, Nielson Merksamer Parrinello and Mueller of Mill Valley, Dunn cited past problems in obtaining agency documents. Dunn, usually in the voting minority on the board, argued that closed sessions remained a rare opportunity for him to get ``even a hint of information about the agency's affairs.'' He worried the board would use his wife's litigation as a ruse to discuss other matters outside his presence, he said.

Cooper denied the accusations, saying the board wanted only to keep him from matters that involved his wife's lawsuit.

``We have an agency attorney who sits with us during closed session and keeps us swaying from the closed session topic. He keeps us in check,'' Cooper said.