First posted 10/10/08 11:42 p.m.

A lawsuit that has resulted in years of mudslinging and political acrimony may be moving toward a settlement as attorneys for former police sergeant Dan Harder and the village of Forest Park try to hash out an agreement. The two sides have been in formal negotiations for a month, according to court filings, but it’s not yet clear what terms-if an-have been established.

Parties on both sides declined to discuss specifics, but Mayor Anthony Calderone characterized the effort as “earnest.”

“I would say it’s absolutely making progress,” Calderone said.

Attorneys are expected to notify the 7th Circuit Court of Appeals of their progress by today, according to an order from the judge. The Oct. 15 deadline is unlikely to trigger any action from the court and serves simply as a status update.

Harder filed his wrongful termination suit against the village in October 2005 just as a municipal hearing to strip his badge got underway. He claimed that he was the target of a vindictive mayor who pulled strings with an all-too-willing chief of police. That revenge, according to the original complaint, was motivated by Harder’s involvement in sexual harassment lawsuits filed by members of the police department.

Harder was fired from the department by a vote of the Fire and Police Commission Feb. 1, 2007, and his civil complaint is being heard in Chicago’s U.S. District Court. However, the case is essentially on hold while the 7th Circuit Court of Appeals hears an argument from the commission that Harder’s firing was not “arbitrary and unreasonable,” as determined by a federal judge in May.

Jeanine Stevens, Harder’s attorney in the matter, declined to comment on the negotiations. Also, Village Attorney Matt Iverson did not return a phone call seeking comment.

Though the ruling handed down by Judge James Moran that Harder should not have been fired from his job is a sizeable bargaining chip, it’s not the only one in play. Two months later, in July, the same judge declared that Calderone could not be sued for orchestrating a plot against Harder and dismissed the mayor as a defendant.

Since that ruling, several other village employees named in the suit have filed motions for summary judgment, including Police Chief Jim Ryan. No ruling has been made on those requests.

“I would think that the judge’s ruling in my particular case gives us better leverage for bargaining,” Calderone said.

The municipality’s liability insurance covers up to $1 million in damages, but would not pay for any lost wages, overtime, past benefits or severance, should those become part of an agreement.

“Insurance companies view this as a business transaction, and wish to minimize their exposure,” Calderone said of potential settlements.

Forest Park’s premium for this insurance is $582,797, according to a copy of the policy.