SYRACUSE, N.Y. -- In 2011, Juanita Perez Williams' corporation counsel office hired her ex-husband's law firm in a deal Syracuse city officials later called secretive and illegal.

When Perez Williams resigned, the city revoked that deal and refused to pay the firm's bills. The law firm sued to collect, setting off a court fight that laid bare tension between City Hall staff and Perez Williams, now the Democratic candidate for mayor.

Perez Williams' office hired the law firm of her ex-husband, Steven Williams, despite a legal opinion warning the city to avoid the conflict of interest. He countered in court papers that the legal opinion, written while the two were still married, didn't apply when his firm was hired -- by then they were divorced.

In an interview Monday, Perez Williams said city officials were trying to "create an issue" after she left.

She said it was an underling, not her, who made the decision to use her ex-husband's firm, Smith, Sovik, Kendrick & Sugnet, which had been representing the city for decades. And she said the mayor authorized it.

She accused Mayor Stephanie Miner's administration of suppressing a document that would prove Perez Williams' office went through the proper channels to retain her ex.

City Hall said that document never existed. If it did, it would have surfaced in Williams' lawsuit.

Steven Williams Monday called the whole thing a "big nothingburger" and said there was no conflict of interest.

"I think there are folks trying to make an issue where there isn't an issue," he said.

City Hall lawyers, in court documents, argued Perez Williams acted improperly on the case, trying to hide her role to play down a conflict of interest.

According to a sworn statement from Jessica McKee, the attorney who was Steven Williams' main city contact, Perez Williams wanted McKee listed as lead counsel, and Steven Williams and his firm would "work behind the scenes."

An email in court documents suggests Perez Williams was overseeing the case.

"Steven, I would appreciate it if you spent some time on this," she wrote to Williams. "Based on your bills it appears Suzanne does most of the work. She doesn't impress me nor did I hire her. I hired you."

In an interview, Perez Williams said she was looking out for the city's interests.

"What I meant to say is the city didn't hire your secretary," Perez Williams said.

McKee said in court papers she raised the potential conflict of interest to Perez Williams on three occasions and Perez Williams indicated she had the mayor's approval.

McKee said the matter made her so uncomfortable she asked another City Hall lawyer, Mary Anne Doherty, to sit in when she met with Steven Williams.

Shortly after Perez Williams resigned, the city severed ties with her ex-husband and refused to pay his firm about $19,000 for work performed. The firm sued to get that money. The city eventually settled for $9,500.

The disputed contract and resulting lawsuit, never before detailed publicly, were revealed in court and City Hall documents recently obtained by Syracuse.com.

They shed some light on the mysterious exit by Perez Williams from the Miner administration after 18 months. Six years later, the mayor has tepidly endorsed Perez Williams as her successor. But the lawsuit and Perez Williams' response indicate old wounds have not healed.

Attorney Steven Williams, of Baldwinsville, is pictured along the shore of Onondaga Lake.

Miner hired Perez Williams as corporation counsel at the start of the mayor's first term, Jan. 1, 2010. At the time, Perez Williams was married to Steven Williams, who was a partner with Smith Sovik.

Before she took office, Miner hired outside counsel to assess conflicts of interest within her administration. That firm, Mackenzie Hughes, notified Miner that Perez Williams would have a conflict if she hired Smith Sovik, which sometimes represented the city in legal matters.

The Mackenzie Hughes memo said neither Perez Williams nor her subordinates should hire Smith Sovik. Doing so would violate the city charter and would result in a voided contract, the return of fees and possible prosecution for a misdemeanor, the memo said.

The city charter states: "No person receiving compensation from funds appropriated by the city shall be interested directly or indirectly in any contract to which the city is a party..."

In June 2010, six months after that memo, Perez Williams and her husband divorced. According to both, they had a clean break with no alimony or child support payments. The pair have four children together. Steven Williams said he kept custody of their two sons. Their two daughters were adults.

"Somebody got it in their head that I had to pay child support or alimony and that was a conflict of interest," Steven Williams said in an interview. "I had no financial obligation at all."

On Feb. 1, 2011, Perez Williams' office hired Smith Sovik to represent the city in a lawsuit against Loomis Armored U.S. Loomis had a contract to collect parking meter change for the city. A Loomis employee had siphoned off $2.9 million in change over six years and the city sued Loomis to get that money back.

Steven Williams took the case and billed $175 per hour, plus $145 per hour for work done by an associate. He said he was hired by Mary Anne Doherty, a senior assistant corporation counsel. Doherty would argue in court papers that she didn't have the authority to hire outside counsel -- only her boss, Perez Williams, did.

In court filings, city officials said Perez Williams never had the mayor's approval to hire Steven Williams. The city charter requires mayoral authorization to hire "special counsel."

Current Corporation Counsel Joseph Fahey said that authorization usually comes verbally or by email, and is followed with a signed retainer from the corporation counsel.

Perez Williams told Syracuse.com Monday she had written approval from the mayor for her office to use Smith Sovik.

"When we decided to utilize Smith Sovik I put a document together informing Miner and [Chief of Staff] Bill Ryan of the case and that there were no conflicts of interest," Perez Williams said.

Syracuse.com requested that document from the city.

"The document that you requested does not exist," said Fahey. "It has never existed. If such a document had ever existed, it would have been disclosed to Smith Sovik."

Steven Williams and an associate worked on the Loomis case for about six months and submitted bills for $18,878. Williams' primary contact at the city was McKee, an assistant corporation counsel.

In sworn statements, McKee and Steven Williams contradict each other regarding Perez Williams' involvement with the case.

McKee said she met several times with Perez Williams and Steven Williams. In one of those meetings, Perez Williams asked that McKee's name appear as lead counsel and Steven Williams and his firm would "work behind the scenes even though they would actually be doing the work," McKee wrote.

"I was not comfortable with [that]," McKee wrote.

Steven Williams said in a letter that it was Doherty who suggested McKee's name be used, something he said he resisted. In a deposition, he said Perez Williams was not a part of his meetings at City Hall.

"I spoke to her once while I was there after a meeting in a conference room," Williams said. "But she did not participate in any of the meetings."

On July 25, 2011, Perez Williams abruptly resigned as corporation counsel.

About two weeks later, the new corporation counsel, Doherty, severed ties with Smith Sovik and decided to handle the Loomis case internally.

A month later, Doherty wrote to Kevin Huslander, a partner at Smith Sovik, to say the city would not pay its bill. She said Perez Williams illegally hired the firm, never signed a retainer agreement and didn't get approval from the mayor.

Former Corporation Counsel Mary Anne Doherty -- now a city court judge -- gives an acceptance speech at Pensebene's Casa Grande after winning the judgeship in 2013.

In a letter to Doherty, Steven Williams said Doherty told him the mayor knew he was working for the city. He put a caveat on that claim when asked in a deposition if Doherty told him the mayor had approved.

"I could be mistaken on that to be quite frank, but that's my recollection," he said. "I'm not certain and I have a vague recollection of that."

Williams' letter said there was no conflict because he and Perez Williams were divorced. He pointed out the city uses the law firm of Hancock & Estabrook, where the mayor's sister is an attorney.

In separate interviews, Perez Williams and Williams also noted Miner has hired her husband's son as outside counsel. Terence Mannion billed the city for $112,000 in 2013 to represent the city on Destiny USA-related matters.

"We had these same conversations when Miner hired Terry to help her out," said Perez Williams, who was corporation counsel when Mannion was hired. "We always walk through the potential conflicts of interest."

Doherty declined comment for this story. So did Miner. Jessica McKee could not be reached.

The city settled with Smith Sovik for $9,500 in 2014. The Common Council approved the settlement.

In the Loomis case -- the one with the stolen parking meter change -- the city eventually settled for $83,000.

After the city refused to pay, Smith Sovik withdrew from other legal cases it was handling for the city -- ones that began before Perez Williams assumed the job.