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Posted: Tuesday, October 15, 2013 8:35 am

OMAHA, Neb. - Two Omaha men wrongly convicted in the shooting death of a retired police captain have settled a lawsuit they filed against the City of Council Bluffs.

Federal court documents show a judge has ordered details of the case sealed. Terry Harrington and Curtis McGhee, who had been imprisoned for 25 years before being released in 2003, had sued the city for $110 million.

“The matter has been resolved to the satisfaction of both sides,” said Stephen D. Davis, the attorney for McGhee. Davis would not elaborate.

Kristopher Madsen, a Council Bluffs attorney who represented the city and the two retired Bluffs police detectives, made a nearly identical statement when asked for comment. Bluffs City Attorney Richard Wade directed questions to Assistant City Attorney Michael Sciortino, who was unavailable for comment Monday afternoon.

With the details being sealed, Bluffs taxpayers do not know how much the city has agreed to pay.

The lawsuit was scheduled for retrial today in federal court in Des Moines after a mistrial in December.

Harrington and McGhee have said they deserve payment for spending a quarter-century in prison. In last year’s trial, Harrington sought more than $60 million and McGhee more than $50 million, alleging that officers Dan Larsen and Lyle Brown, now retired, coerced witnesses into lying and hid evidence.

The city disputed the allegations, arguing police had enough evidence to take to prosecutors, who convicted the men in separate trials.

The combined amount sought by the men nearly equaled Council Bluffs’ annual operating budget, which was almost $119 million for the 2013 fiscal year.

The slain policeman was retired Council Bluffs Capt. John Schweer, 56. He was found face down on a railroad spur just west of a Datsun car dealership in Council Bluffs the morning of July 22, 1977, with a gunshot wound in his upper-right chest. He had been working as a security guard when he was killed.

Harrington and McGhee, then teenagers living in north Omaha, were arrested that November. Authorities said at the time that the two, along with a third youth, Kevin Hughes, tried to steal a car shortly before the guard was shot. Hughes identified Harrington and McGhee as the likely killers.

Despite little physical evidence, the two were convicted in 1978 and sentenced to life.

The two were freed in 2003 after the Iowa Supreme Court found prosecutors had committed misconduct by concealing reports about another man seen near the crime scene with a shotgun. Key witnesses, including Hughes, also had recanted their testimony.

Their case reached the U.S. Supreme Court in 2009 over the issue of whether suspects have the constitutional right not to be framed. The justices heard arguments, but before they ruled, Pottawattamie County, which prosecuted the case, agreed to pay $12 million to settle while admitting no wrongdoing.

The case went to trial in Des Moines on Nov. 1, 2012. On Dec. 14, after deliberating for nearly a week, U.S. Senior District Judge Robert Pratt read a verdict in court indicating jurors had found in favor of the officers and the city.

But when Pratt polled the jurors to make sure they agreed with the verdict, three women said no. After a private consultation, Pratt declared a mistrial.

In an April 30 ruling, Pratt said the only issue that would survive to a new trial was whether Larsen and Brown deliberately manufactured, coerced, or fabricated false evidence against Harrington and McGhee and knowingly used it against them at their trials.

He threw out all other allegations, including racial discrimination, that the city failed to train or supervise the officers, and claims that the officers failed to investigate other suspects.

The ruling released Council Bluffs from direct liability, but the city could have been held responsible for paying if a jury had returned a verdict against the officers and a judge had found the acts of the officers were “a willful and wanton act or omission,” according to Iowa law. The city was continuing to pay legal fees for Larsen and Brown.

This report contains material from The Associated Press and the World-Herald News Service.

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