He said no disciplinary actions were taken against the officers, but added the city no longer employed Falcicchio and Giarcyk.

Baldini also said that this lawsuit and others took place while William J. Kennedy was police chief. Kennedy, named in this suit, was suspended without pay in December 2007 and retired in May 2008.

Since the retirement, Baldini said no suits have been filed against the police.

This is the second time in recent months that Sea Isle City's insurers have settled police litigation for six-figure sums. The fund in January agreed to pay $550,000 to a former resident who was told her child was excluded from a school play "because he was black," and was then arrested after confronting school officials.

While Doretha Waters-Rice was accused of threatening to kill school officials, the Cape May County Prosecutor's Office dropped charges in 2003. Waters-Rice filed her federal suit the next year.

In that earlier case, U.S. District Court Judge Robert B. Kugler wrote in 2008 that "there is evidence suggesting that (Detectives Jon) Gansert and (Dennis) Felsing made up facts to support the arrest warrant, and that a jury could readily conclude that the police lacked probable cause to arrest Waters-Rice following her meeting with school officials."