ABC11 is not identifying either the man or the woman because of the nature of the allegations. The former police officer has not been charged.
The lawsuit alleges the officer met the woman in a bar and he convinced her to drive him home because he had been drinking. He then allegedly invited her inside and sexually assaulted her.
The woman said she reported the incident to the Smithfield Police Department but officials did not discipline the officer after interviewing her.
The suit claims the town was negligent for continuing to employ the officer and seeks damages.
In a statement, the Town of Smithfield said the alleged incident happened outside of the officer's time of employment with the town and it has cooperated in every way with the alleged victim.
According to public records, the officer left the town's employment nine months after the alleged sexual assault.
Smithfield said it intends to "vigorously defend" itself in court.
With information from Mickey Lamm/WTSB Radio