The city has through the weekend to try to recoup a potential $10 million loss by suing its own lawyers in a wrongful-termination case, but the decision to sue won’t bear the endorsement of the City Council.

The timing is key in the 12-year-old case, which the city lost but is appealing. The appeal may be decided by early September, and a win could save the city millions of dollars, making it unnecessary to sue its outside counsel in the case. Either way, the statute of limitations on a lawsuit ends Sunday.

Councillor Craig Kelley offered a policy order at a Monday meeting urging the city to ask its lawyer and law firm in the case to waive a three-year statute of limitations so a lawsuit was possible if the city lost again. But Kelley’s proposal was tabled by vice mayor Henrietta Davis until the next council meeting — Monday, a day too late.

“The city manager can do anything he wants. Even if we passed the order, he could still do anything he wants,” Kelley said Tuesday when reached by telephone. “The policy order was just a suggestion.”

Davis, who was traveling Wednesday in Washington, D.C., did not respond to messages asking for comment on her “charter right” veto of Kelley’s policy order.

The city could still file suit this week, or ask for an extension regardless of the fate of Kelley’s suggestion.

“Having a valid claim is also no guarantee the city would have collected,” Kelley said. “But as far as I can tell, it’s all been derailed.”

Mayor David P. Maher was asked for comment, but mayoral staffer Lee Gianetti referred questions to Cambridge City Manager Robert W. Healy. Healy did not return a request fir comment.

The case

If there was a lawsuit, it would be almost by invitation.

The city hired lawyer Joan A. Lukey to handle Malvina Monteiro v. City of Cambridge, in which Monteiro complained of being fired as executive secretary of the Police Review and Advisory Board by Healy when he found she was complaining about racial discrimination. The city’s counter complaint: Monteiro got a master’s degree with work done during city business hours, and that the firing came five years after the race complaints. (Lukey had been with law firm Wilmer Hale but, as of June 17, 2008, is working at Ropes & Gray.)

A jury found May 23, 2008, that Healy had retaliated against Monteiro by firing her and awarded the plaintiff just over $1 million in compensatory damages, with an extra $3.5 million in punitive damages due to the city’s conduct.

In June 2008, the city filed papers for post-trial motions, with a hearing following June 19. On April 23, 2009, Judge Bonnie McLeod-Mancuso denied the city’s requests, writing in her memorandum that Healy’s actions were a “deliberate, systematic campaign to punish the plaintiff.”

On May 4, 2009, the city’s lawyers moved for a reconsideration of the verdict and the decision on post-trial motions. At this point was the first mention of reducing punitive damages due to Healy being in constant contact with his counsel.

Defending this point in her statement, Lukey wrote: “Far from cavalierly disregarding the rights of Ms. Monteiro, Mr. Healy prudently sought the regular advice of counsel and regularly took into consideration the risk of a retaliation complaint with every decision that he was required to make … Imposing harsh penalties for consultation with counsel and exercising care to avoid engaging in, or being accused of, retaliation against a plaintiff who remains employed is contrary to public policy.”

To this, Monteiro’s lawyer, Ellen Zucker, responded in opposition to the city’s motion for reconsideration: “There is no factual basis whatsoever upon which the court may even consider this ‘advice of counsel’ defense.” Deputy City Solicitor Nancy Glowa was also with Healy to offer advice throughout the trial, Zucker said.

The appeal

A year later, May 20, the judge denied a separate request for a re-hearing. In June, Cambridge filed a notice of appeal in Monteiro v. Cambridge, which took place just weeks ago, May 4, in Boston.

Now, the city has until Monday, three years to the day after the jury awarded Monteiro the $4.5 million in damages, to file a malpractice suit against Lukey and her employer for giving the city manager potentially damaging advice.

“Arguably, we paid good money for that bad advice,” Kelley said. “Arguably, [Lukey] should say, ‘We are willing to be considered potentially liable for that advice for as long as it takes for this case to wind down.’”

Counsel’s actions could also be without fault, Kelley said.

“It might’ve been good advice by her that didn’t have the intended result,” he said. “It’s like if someone asks you if something is good to eat and you say, ‘Yeah, have a taste,’ and they don’t like it. Not everything that has a bad result means you can sue someone else to cover the damages.”

That’s not the way residents speaking during a public comment period saw it. Richard Clarey, an attorney, declaring himself one of the taxpayers “on the hook for a lot of money” to pay off the case, said a recommendation to fire Monteiro in September 2003 while a judge was ordering her initial case to trial was a surprisingly basic error. “A third-year law student wouldn’t advise that,” Clarey said.

“It’s malpractice on the level of leaving a scalpel inside a patient,” resident Charles Teague said.

Ropes & Gray is a 1,000-lawyer law firm with a corporate focus that, over 140 years, has grown to have offices in Boston, Chicago, Hong Kong, London, New York, San Francisco, Silicon Valley, Tokyo and Washington, D.C. Gross revenue was $797 million in 2008, according to Chambers Associate, and lawfirmstats.com said profits per equity partner in 2009, the most recent year for which data are available,  were $1.4 million, placing the firm in the 66th percentile. WilmerHale says it has more than 1,000 lawyers in a dozen cities worldwide.

Lukey was called Wednesday for comment.

“The only thing I do know is that once the statute of limitations closes, it seems pretty unlikely that we can have a discussion about who’s responsible for what,” Kelley said.

This post was updated May 19, 2011, to correct the timeline of court motions and judgments.