Former Española Utilities Department billing supervisor Nadine Trujillo settled her whistleblower lawsuit against the city of Española for $500,000, according to two sources familiar with the agreement.

Trujillo sued the city government and former city manager David Valdez in July 2019, claiming Valdez retaliated against Trujillo and effectively forced her out of her position in the wake of the still-unsolved theft of $18,000 from the Utilities Department that April, $12,000 of which was in checks. The suit claimed Valdez, who was fired and banned from City Hall earlier in July, was the “prime suspect” in the case.

State Attorney General’s Office spokesperson Matt Baca said Tuesday the investigation into the case remains ongoing.

The settlement was agreed upon in mediation out of court Feb. 17, though the city’s attorney in the case, Luis Robles, said final papers have not yet been signed.

He said the entirety of the payout will come from the city’s insurance company, Travelers Insurance.

“It was fair to Nadine Trujillo and I think you have to be open minded to understand that it was also fair to the city,” he said. “I can understand the damages being appropriate, because she has to live with that (stigma).”

Trujillo’s suit alleged Valdez violated the Whistleblower Protection Act by harassing and disciplining her after she reported the money missing April 12 until she was effectively forced to resign at the end of May.

Robles said a large amount of the damages discussed in mediation were due to media attention around the case that tied her name to the theft.

“The measure of damages that Nadine Trujillo suffered was magnified by the amount of publicity,” he said. “When a story has legs, it ends up trampling people.”

Trujillo said she suffered serious personal and professional damages in the fallout of the incident.

“You just run into people and they just treat you differently, it could be negative or positive,” she said. “You stop trusting people, you guard your friendships, it kind of turns your life apart.”

She said that reviewing footage of herself and Valdez being questioned separately by Española police before the investigation was turned over to the state Attorney General’s Office made her more confident in her decision to sue. She said investigators were aggressive and accusatory with her, and merely joked around with Valdez and discussed her employment with him.

Valdez is set for a plea and sentencing hearing Thursday in Pueblo County, Colo. for unrelated charges of felony theft and embezzlement in his previous role as district manager for the Colorado City Metropolitan District. He was charged in September 2019 for allegedly embezzling $20,000 to $99,000 from the District in 2017 and 2018 and for scamming two licensed area cannabis growers each out of $5,000 to $19,999.

A Rio Grande SUN investigation uncovered records showing he spent over $4,000 on District credit cards in casinos in 2015.

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