Loading...
sr-101477-cao opinion_,, CA RLK:DTO:jak ~: CITY ATTORNEY OPINION _ Opinion No. 77-74, October 14, 1977 SUBJECT: Defense of City Employees or Former Employees in Criminal Prozeedings REQUESTED BY: David F. Dolter, Assistant City Manager OPINION BY: Richard L. Knickerbocker, City Attorney • Dennis. T Omoto, Deputy City Attorney QUESTION PRESENTED " Generally, pursuant to Section 995.8 of t1-.e Govern- ment Code, is a city permitted., but not required,.to furnish • a defense for its employees or former employees in criminal proceedings based upon their official acts and omissions if the city determines. that (1) such defense would be in the best.. interests of the city and (2) ttie"subject empi©yee:or~former employee acted in good faith, without actual malice, and. in the::apparent interests of the City? CONCLUSION Yes. Under Section 945.8 of the government Code, s a city may, but is not ~equired to, provide for the defense of a, criminal action or progeeding brought against an employee ~ ~: _. or former employee on account of an act or omission in the .scope of his employment if the city determines that (1) such defense would be in the best interest of the city and (2) such employee or former employee acted, or failed to act, in good faith, without actual malice, and in the apparent interest -1- CA RLI:: DTO : j ak of the city. ANALYSIS Statutory Law Although., Frith noted. exceptions, a public entity, including..a city, is required"to afford a defense to a public employee in a civil action (see Section 995 of the Government Code, the same obligation does not exist with. respect to a criminal action., ,as demonstrated by the following state law: "Criminal Actions and Proceedings. A public entity is not 'required to provide for the: defense of a criminal action or proceeding {including a proceedingto,remove an officer under Sections 3060'to 3073,- inclusive, of the Government Code) brought against an employee or former employee.,_but a public entity may. provide for the defense of a- criminal action or proceeding (including ' a proceeding to remove an officer under Sections 3060 to 3073, inclusive, of-the Government Code) brought against an employee or former employee if: (a) The. criminal action or proceeding is brought on account of an act or omission in the scope of his employment as an employee of the public entity; and (b} The public entity determines that CA RLK:DTO:jak such defense would be in the best interests of the public entity and that the employee or former employee acted,. or failed to act, in good faith.,- without actual malice and in tale apparent interests ofahe,_publc entity..". Section 995.8 of the Government Code. For purposes of th.e aforementioned statutory pro- vision;.,"public entity" imcludes a city, and "'employee" includes an officer, employee, or servant, whether or not .compensated, but does not include. an independent contractor. Section 811.2 and Section 810.2 of the Government-Code.. Case Law In an interesting Califobnia case, the Ccurt of Appeal, Third Dis rict held that under Section 995.8 of the Government COde, providing that a public entity is not required to provide for the defense of a criminal action brought against an employee or former employee, but may do so if certain conditions exist, a county had the right to arbitrarily refuse to defend an employee and did_not have to make formal findings as to its reasons. County of Sacramento v. Superior Court, ZO Ca1.App.3d 469, 97 Ca1.Rptr. 77T (1971). Niore specifically, concerning the right of a public entity not to provide for the defense of an employee in a criminal action, the Court held as follows: -3- CA RLK:DTO:jak "As we have shown, yzhere, as here, a criminal action is involved, the entity i given the light to reuse the employee a defenserarbi rarily, with. only a permissive right to compensate him for. 'his-attorney's fees and costs in the instances noted." (Emphasis in text). County of Sacramento v. Superior'COUrt, 20 Cal-.App.3d 469,.473, 97 Cal.Rptr 771, 773 ..(19711 . Despite the express language quoted hereinabove, total reliance should not necessarily be .placed nn the right of a`public entity to "arbitrarily" refuse to defend. an employee in a criminal action since.Gounty of Sacramentov. ...Superior Court, supra, was decided in"the Third Appellate District, not the Second Appellate District, the-.latter of which includes the County of Los Angeles.. Furthermore., in County of Sacramento v. Superior Court,` supra, the Court was alsa able to rely on the fact that no arbitrary action by the public involved therein appeared in the record even assuming that an arbitrary refusal would have been improper. City Charter Even though Section 995.8 of the Government Code expressly refers to defense in criminal actions and proceedings, -4- CA RLK:DTO:jak additional rights of an. employee or former employee may be available by virtue of the following provision: "Tfie rights of an employee or former employee :under this part are. in addition to and. not in lieu of any rights he''may have under any con ract or .under any other enactment providing for his defense." .Section 996,fi of th.e Government. Code. Lt just sa happens that Section 708 of the Charter =- of the City of Santa Monica provides-im relevant gortion as follows:... "`The City Attorney shall have: power and be required to: (bl Representandappear for any City. officer or employe,.., in: any or '; all"actions and proceedings in which ,: any such officer or employe .i.rn -or by reason of his official capacity, is concerned or is a party, but tYie City Council shall have` contro'1 of a1T legal business and' proceedings and may employ other attorneys to take charge of any litigation or matter ." {Emphasis added). -5- CA RLP.: DTO: j ak A juxtaposition of the wording in Section 995.8 of the Government Code and the above. quoted charter section reveals that the latter is much broader since it does not` differentiate hetweeii civil and,crifninal actions and does not specify any conditions precedent. to the employment by the City Council of other attorneys to take charge of any litigation. In the. absence of any enumerated limitations on the authority of .the City Council to hire additional counsel, it is arguable that the basic initati.ons (e.g., na abuse of discretion and no waste of public funds) would govern: the `discretonary:power of the legislative body of the City in hiring'addtonal legal counsel to take charge of litigation matters. Regarding the waste o£ public funds restraint; .the Court of Appeal,. Second-District, has held that the payment.. of legal fees by he Housing Authority of. the City. of Los Angeles to its executive director for the defense cf his criminal indictment based upom his personal acts was-for a private, and not public, purpose, and constituted an un- constitutional gift of public funds. Holtzendorff y. Housing Authority of the City of Los Angeles, 250 Ca1.App.2d 596, 58 Ca1.Rptr. 886 fI967). Furthermore, as a practical matter, is it likely that the City Council would find it prudent to provide a criminal defense to one of its employees under circumstances other than those delineated in Section 995.8 of the Government -6- c CA RLK:DTO:jak ' ` Code? In other words, a decision of the City Council may be susceptible to an attack of abuse of discretion or waste of public funds if the determination dealt with the furnishing of a defense to an employee or former employee (a) in a criminal action not arising ;in the scope of his employment, {b) in a criminal proceeding when such defense would not be in the best interest of the City, or (c) in an action wherein the employee acted in bad faith, with. actual malice, and not inthe interests of the City. ' It is not beyond the realm of imagination that there may be instances .where the affording of a criminal defense to an employee may be authorized under the broader phrasing of Section 708 of the Charter of the City of Santa Monica, even though the same may. be unauthorized under the more narrowly drawn Section 995.8 of the Government Code. However, necessity dictates that such instances must be resolved on a case. by case basis when-.they manifest theriselves. In conclusion, .recognizing the potential effect of the charter provision, it can at least be stated that, pursuant to Section 995.8 of the Government Code, .the City is permitted, but not required, to furnish the defense for .an employee or former employee in a criminal proceeding based upon his official acts and omissions if the City decides that jl) such defense would be in the best interest of the City and (2) a subject employee or former employee acted in good faith, without actual malice, and in the apparent interests of the City. -7- CA RLR:DTO:jak J Respec filly sub it ed; ~~ ENNIS T OMOTO, Deputy City Attorney APPROVED• /, CHARD L. NIC,RERBOG ER, City Attorney * This question has arisen since. the Sugreme Court of California has held that a city attorney with prosecutorial .responsibilities. may not defend or assist in the defense ofpersons accused of crimes. People v. Rhodes, 12 Ca1.3d,18~, 115 Ca2.Rptr.-..235 (1..974). -8- C CITY `:F '- `,t.T i+~CiiiCA CITY ~;AR;:GE?.'s OFFICE Mund, McLaurin & Company QCT ~ ~ 39 P~'7~ OF LOS ANGELES ESTABLISH EDt920 Risk Management Insurance Analysts Adminla tra Live 9ervicea CNA Park Place 600 Sonth Commonwealth Avenne, Suite 1203 Mes+ortwxour No, r,A-'('r-u'~$ Los An¢eles, CaHiornia 50005 (2431 385-3204 TO' CITY OF SANTA MONICA °ATe1 September 29, 1977 Anenrron: Mr,.David P. Dolter Assistant City Manager soe,eor: ERRORS AND OMISSIONS INSURANCE In response to gour question regarding Errors and Omissions coverage, I would like to first recite the. basic commo$ insurance definitions of Errors and Omissions: Some insurers start with the. terminology,"wrongful act" and other insurers such as the Admiral Insurance Company` use the actual term "Errors and Omissions." But when looking at the policy definitions, they all mean essentially: "error or misstatelhent or set of omission or negligence or breach of duty including misfeasance; malfeasance sad nonfeasance." The Admiral form limits. their definition to "misfeasance, malfeasance. or nonfeasance" only, but: is reviewing the common definition of-these terms,. it essentially means the same an other meanings given to "wrongful act." (See attached.) There are some additional policy provisions which bear on the extent of cover- age for errors and omissions. One of them is the fact that the error or omis- sion must arise out of an occurrence.. The Admiral policy defines occurrence with respect to errors and omissions claims as "occurrence means any actual or alleged errors or omissions by an insured which results is injury or damage neither expected or intended from. the standpoint of the insured." With respect to this definition it is important to consider two aspects: 1. The damage from an occurrence must:-be "neither expected or intended Yrom the standpoint of the insured." Errors and Omissions coverage is designed to cover unexpected results and does not intend to be a coverage which guarantees work performance-such as a Faithful Performance Bond. In other words, it does not cover. "deliberate and intentional acts" if the damage resulting from such acts can be reasonably anticipated. 2. Errors-and Omissions excludes physical injury to tangible property, including consequential loss resulting therefrom. The intent of this exclusion is that such damage to tangible property would be covered by-other conditions of the policy which protects against such standard occurrences as "trip and fall", automobile accidents, sewer back ups, etc. Mund, McLaurin & Company September 29, 1977 Page -2- Mr. David P: Dolter Santa Monica The insured is the policy is extremely broad and covers all oPPicera and employees of the Gity, including. members oP the City Council or Commissions of the City providing that they are only covered "while acting within the scope of employment." The exclusions directly relating to Errors and Omissions are relatively limited and in essence are the following: 1. A liability arising in whole or in part out of any insured obtaining Pinaacisl gain for which they were .not legally entitled. Comment: This-is a common exclusion with regard to Errors and Omissions insurance and was developed primarily-out of the private sector where it was a concern Por profit making by'insiders. 2. Liability arising out of the will.Pul violation of a penal code or ordinance.. 'Comment: This is a common exclusion that has been in most. Errors and . Omissions-forms and in all probability this type of-act would be exempted from the City's responsibility under code.. 3. Liability arising out oP estimates oP probable cost on cost estimates being: exceeded or Por faulty preparation of bid specifications or plans. Comment: This is an egelusion that is almost exclusive to the Admiral form. While it may be possible to rearrange coverage so that Errors and Omissions is placed separately without this exclusioa,.we believe it is probable that the cost would materially increase and the over-all program would not be as tightly put together. k. Injury to, destruction or disappearance of any tangible property (in- cluding money) or the loss oP use thereof. Comment: See previous comment. Attached is a list of claims taken Prom examples in the Staff Background Paper oP the California Citizens Commission on Tort Reform which show illustrations of claims oP an errors and omissions nature. In some cases the claims may not at first appear to be of an errors. and omissions nature, but we find that plaintiffs' attorneys are using every possible allegation they can and somewhere in the list is very often an allegation of error or omission. For example, in the first case, where the elderly person slips and falls on a crack in the sidewalk, we would normally expect the suit to simply allege a defect in the sidewalk resulting in the existence of a hazardous property, but one of the complaints might include the City being liable for its failure to correct the condition. Mund, McLaurin & Company September 29, 1977 Page -3- Because of the concern over being protected-for Errors and Omissions, we believe it is important to distinguish between the City's obligation to defend and indemnify employees under code sad the application of the insur- ance coverage. Sub~eet to a broader analysis by the City Attorney, we believe it is probable that the obligation to protect anal indemnity extends far beyond the application of any insurance policy. In our opinion it would be mislead- ing to the individual employees to offer any resume with respect to insurance coverage without coupling it with a detailed analysis oP the City's obliga- tion under code and how that obligation impacts on the individual employees. ~~~ ''~ D. J. 4oller DJ4:ep Eacls. Feasance - 'The doing or performing of a condition, duty, etc. Malfeasance - The doing oP an act which a person. ought not to do; an illegal deed; -- often used oP official misconduct. Misfeasance - A trespass; now, specif., the doing wrongfully and in3uriously of an act which one might do in a lawful manner: (Distinguish from malfeasance and nonfeasance.) Aonfeasance - Omission.to do something, esp. what ought to have been done.. l 1. An elderly person .slips and Palls on a one-help inch crack in the sidewalk, breaking his leg. The crack has developed since the City last in- spected the sidewalk a year ago. The person sues the City. 2. A truck driver, having lawfully halted at as intersection (without traffic signals) in preparation for making a left turn, is hit head-on by a car, negligently driven, coming From the other direction. The street, as designed and built by the State Division oP Highways 30 years before, does not have a special,"left-turn lane." Traffic has grown substantially on the. street over 30 years, and there have been many accidents at the intersection. The City has written letters of complaint to the State asking that something. be done, to which the State has not responded. The truck driver sues the motorist but also sues the State, alleging the State's negligence in failing to provide a left-turn lane. 3. The Youth Authority considers whether to "parole" a boy originally Pound guilty oP a crime oP violence. Despite. the risk, the Youth Authority determines, all things .considered,. that parole is the proper decision. While on parole, the boy attacks a citizen, who sues the State, alleging that the Youth Authority's decision-was unreasonably risky and hence negligent. 4. The same as 7, above. Here, however, the Youth Authority places the boy with a foster Family, and does not notify the family oP his potentially violent tendencies. A member oP the family is the .victim oP the boy's attack, and sues the State, alleging the: Youth Authority's failure to inform the family of the. boy's nature. 5. A dock owner telephones the 7kpartment of Water Resources to Pind out what its daily, general-Forecast is-for-the Sacramento River. The Forecast is that the River will rise to a maximum. of 24 Peet.. The. dock owner sets his docks so that they will. float at 26 Peet. When the River rises to 29 Peet, his docks are damaged.. He sues the State, alleging negligence in the preparation of the Forecast. 6. Aa employee at the County jail negligently Pails to lock a jail door. As a result, a prisoner escapes,. and inflicts au injury on a passerby. The passerby sues the County. C17Y OF SANTA MONICA INTER-DEPARTMENT MEMO DATE:: October 17,.1977 TO: David P. Dolter, Assistant Ci.tg Manager FROM: Dennis T -0moto, Deputy City Attorney SUBJECT: Indemnification of City Employees. . City; Attorney Opinion No. 77-77 In your Inter-Department Memo dated September 22,.1977, _ at Paragraph 2,. you inquired of this office as to the existence or non-existence. of laws regarding the payment of certain judgments rendered against officials and employees of the Gity of Santa Monica.. Please find attached hereto photostatic copies of Section .82.5 et sec.-of the Government Code ~zhich are relevant. to -the: above referenced matter. The statutes are .basically self-explanatory, hovzever,,for- sake of convenience.,. some: of therfeatures therein .include., but are'not limited to, the following: A. Generally, pursuant to Section 825 of .the Government Code, a city is'required tc pay _a civil judgment.,., compromise or settlement against an employee 'or former employee.that."arises out of his public. employment if (I} the employee made a written request not less than ten days before-trial for the city to defend bun-in the action or f.2) the city did, in fact, conduct the defense of the employee. B. Under. Section-_825 of the. Government. Code, notwith- standing the foregoing general rule, a-city is not required to pay a civil judgment, compromise or settlement against an employee or former employee .that arises-.out of his public employment if such employee fails to provide reasonable and good faith cooperation in the defense of the action. C. By virtue of Section 844.6 of the Government Code, notwithstanding the preceding general rule, a city is permitted, but not required to, pay a civil judgment, compromise or settlement against an employee_or former employee that arises out of his public employment in any case involving an injury IIavid P. Dolter, Assistant City Manager October 14, 1977 Page 2 proximately caused .by any prisoner or an injury to'-any prisoner. D. According to Section 825 of`the Government Code, notwithstanding the hereinabove general rule, a city-is not required.. to pay any part of a civil judgment or claim against. an employee or former employee that arises out of his public employment which is for punitive or exemplary damages. Attorney