The bad political blood between Jackson County's top administrator and its sheriff took another turn Monday with a federal lawsuit seeking more than $5 million.
An attorney representing Judge-Executive William O. Smith filed the complaint for him against Sheriff Denny Peyman, alleging that Peyman had violated Smith's rights by arresting him.
Peyman interrupted a fiscal court meeting Jan. 14 and took Smith away in handcuffs. Smith, who had been critical of how Peyman operated his office, was released from jail on bond later that day.
Peyman charged Smith with tampering with public records, forgery, falsifying business records, criminal facilitation, abuse of public trust, and taking part in organized crime through extortion or coercion.
He filed the charges on his own, without obtaining a warrant from a judge or an indictment from a grand jury.
Peyman said the charges were based on findings from a 2011 audit, which found several problems with how the fiscal court handled finances.
They included failing to pay employee payroll and retirement withholding on time, coding receipts in the wrong categories, and failing to spend some money as required by law.
However, the special prosecutor appointed to the case, Jackie Steele, said that after reviewing the case, he found a lack of evidence. Steele moved to dismiss the charges.
Auditing deficiencies don't necessarily involve criminal acts, Steele said at the time.
Peyman arrested Smith out of an "unlawful and evil motive" to retaliate against Smith for his criticism, according to the lawsuit Prestonsburg attorney Ned Pillersdorf filed for Smith.
Peyman knew there was no basis for the charges, the lawsuit said. Nonetheless, Peyman notified reporters to attend the fiscal court meeting where he planned to arrest Smith in order to humiliate the judge-executive, the lawsuit said.
The lawsuit argues that Peyman subjected Smith to false imprisonment and malicious prosecution.
It seeks $5 million in punitive damages and unspecified damages to compensate him.
Peyman has argued that he had good reason to arrest Smith and that his actions were not politically motivated.
There have been longstanding problems between the two officeholders.
The fiscal court claimed that it had advanced Peyman a total of more than $600,000 in 2011 and 2012 to cover his payroll and that Peyman has not repaid more than $277,000. The lawsuit blamed Peyman for malfeasance, neglect and mismanagement.
Peyman denied the claims. He said the fiscal court failed to pay him money it owed and that the county added employees to his payroll without budgeting money for the costs, putting him in the hole.
Smith said the unpaid loans to Peyman were one factor that put the poor, rural county in a financial bind.
The fiscal court ultimately took control of Peyman's finances and set up an alternative county police force.
Bill Estep: (606) 678-4655. Twitter: @billestep1.