Do We Really Provide Coverage For These Actions? Darin Richardson LMCIT Jon Iverson Iverson Reuvers Condon Todd Milburn Brooklyn Park, MN
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1 Do We Really Provide Coverage For These Actions? Darin Richardson LMCIT Jon Iverson Iverson Reuvers Condon Todd Milburn Brooklyn Park, MN
2 Overview Statutory and LMCIT coverage requirements Other reasons for providing defense Example of LMCIT decision to defend Examples of LMCIT not to defend Hear from a city employee and a defense lawyer LMCIT Defense Cost Reimbursement Coverage
3 Do We Really Provide Coverage For These Actions? Video
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6 Cline lawsuit settled By Steven P. Wagner The Forum - 09/17/2003 More than two years after Kathy Cline claimed Larry Costello sexually assaulted her on the job, Clay County settled a federal lawsuit by the former sheriff s deputy. Cline will receive more than $1.5 million in return for dropping her claims against the county and the former sheriff, her attorneys said Tuesday.
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8 Municipal Obligation to Defend and Indemnify in Minnesota MN Statute INDEMNIFICATION. Subdivision 1.Indemnification required. Subject to the limitations in section , a municipality or an instrumentality of a municipality shall defend and indemnify any of its officers and employees, whether elective or appointive, for damages, including punitive damages, claimed or levied against the officer or employee, provided that the officer or employee: (1) was acting in the performance of the duties of the position; and (2) was not guilty of malfeasance in office, willful neglect of duty, or bad faith.
9 NLC Member Statutes States determined to be the most similar Minnesota: Colorado, Georgia, Maryland, Nebraska, New Mexico, Pennsylvania, Texas. Similar but differ on punitive damages or expressly require representation by Attorney General: Indiana, Iowa, New Hampshire, New York, Oregon, South Carolina.
10 LMCIT Coverage We shall pay on behalf of the covered party all sums which the covered party shall become legally obligated to pay as damages Covered parties are current and former: Members of city counsel Member of city board Elected or appointed officials of the city Employees of the city
11 Conditions of Coverage LMCIT will defend and indemnify the covered parties for actions within their duties as such, unless there is an act, error, omission or violation which constitutes: Malfeasance in office Willful neglect of duty Bad faith Statute does not allow indemnification Dishonesty
12 Reasons For Defending LMCIT coverage provides for defense Allegations Unified defense/avoid defense conflicts/avoid hostile witnesses Protect case law Cost efficiency Supportive of our members
13 Drivers License Litigation Drivers Privacy Protection Act (DPPA) Claims Access drivers license data only for a permissible use If violated, could be a penalty levied against accessor 1,300 Claims by 91 individuals (69 filed suit) LMCIT position: defend and indemnify all Defended by two law firms Joint defense with other municipal defendants
14 Drivers License Litigation Total possible litigated damage exposure: over $16 million Current status: 11 cases still open 22 non-litigated cases denied and closed 42 fully dismissed & closed 16 settled
15 Drivers License Litigation/Lessons Learned Avoided conflicts, no hostile witnesses Municipal defendants working cooperatively/sharing knowledge and resources (unified defense) Cost savings Eliminated need for multiple defense attorneys on each file Limited expense costs Training, education, updated policies and procedures
16 LMCIT Decision Not To Defend/City of Lanesboro City of Lanesboro Fire Loss
17 LMCIT Decisions Not To Defend/City of Lanesboro Police chief admits setting fire, resigns David Krotz / Winona Daily News Apr 13, 2002 PRESTON, Minn. - The love of a woman made Lanesboro Police Chief John Tuchek commit arson, according to Fillmore County law enforcement officials. And it was that woman's cross-examination of Tuchek in front of investigators that led to his full confession. The fire that burned three historic buildings in Lanesboro was set Sunday night by the town's only full-time police officer so that he could appear heroic to his former girlfriend and win her back, according to documents filed in Fillmore County District Court. He made his initial court appearance Friday afternoon at the courthouse in Preston.
18 LMCIT Decisions Not To Defend/City of Lanesboro Both City and LMCIT both took the position that the police chief s duties did not include setting fires Was guilty of malfeasance Police chief did not challenge
19 LMCIT Decision Not To Defend/City of Sauk Rapids 2012 An officer shot and died in the line of duty Initially, investigators detained suspect Suspect was released Off-duty Police Sergeant made comments on website
20 LMCIT Decision Not To Defend/City of Sauk Rapids 2014 suspect sues off-duty sergeant personally for defamation City s position sergeant was not in the course and scope Was off-duty at the time of his posting City did not request off-duty sergeant post on site Off-duty sergeant did not request permission to post Off-duty sergeant used personal computer (at home)
21 LMCIT Decision Not To Defend/City of Sauk Rapids LMCIT took similar position that there was no duty to defend/ indemnify Coverage for employees as long as those actions are within the employees duties Off-duty sergeant challenged our decision LMCIT filed a declaratory relief action in court along with the city
22 LMCIT Decision Not To Defend/City of Sauk Rapids Jury Trial determined: Sergeant was not acting in scope of his authority or duties MN Statue did not create a duty for city to defend City not vicariously liable LMCIT coverage does not extend to off-duty officer as his actions were not within his duties
23 Impact on the Officer and the Organization Deputy Chief Brooklyn Park Police City of Brooklyn Park, population 80,000 Began in Patrol, Investigations, Sergeant, Lieutenant, Inspector, Deputy Chief
24 Litigation Impact on Officer Officers typically not trained to handle deeply personal matters Concerned, surprised, upset Stressful, but ready to defend Personal impact? Financial Employment impact Perception of others Media Time involved during litigation process
25 Impact On The Officer Testifying in criminal matters vs. civil matters Criminal trial: The officer is a piece of the overall case. Not as much pressure. Smaller venue. Limited prep time. Civil trial: The officer is likely to be the most important witness in the case. Added pressure. Federal Court is more formal.
26 Impact On The Organization Added pressure for politicians, city leadership, police leadership Significant case or patterns of lawsuits causes a chain reaction within the city. What is going on? Police officers are watching to see how the city handles. Settling vs. trial can affect morale and perception of leadership
27 Impact On The Organization Preparation can be extensive for department Scheduling disruption (younger officers working nights tend to be sued the most) Overtime costs to prepare, settlement conferences, and trial Taxing on administrative staff New police software tracking creates more data to extract and provide through discovery. Officer may be concerned about pending internal investigation
28 Impacts on Officer and Organization Decision to settle or go to trial is difficult for all involved Officers generally have a warrior mentality but may be thinking otherwise and not offer those thoughts until pressed Settlement conferences: officers often seek my thoughts when we get close to an agreement I have them speak first, forces officer to reflect on their true thoughts before the administrative point of view comes out
29 Impacts on Officer and Organization How can the officer be supported? Officers often seek advice from their union I have had officers become emotional and experience significant stress relief upon conclusion of trials/settlements Right point of contact within the police department o Officers are looking for someone who is trustworthy and can explain process from the PD perspective (after the attorneys are gone). o PD leadership needs to step in early and direct the logistics and planning to maintain confidence from officer(s). o Need the right attorneys to defend. Officers will know very quickly if the attorney knows what he/she is doing.
30 Defense Counsel s Perspectives
31 Jon s Final Thoughts First Impressions Your interaction reflects upon you, your department, your City, and your profession. Don t be the rude cop. Conduct yourself as if there is a camera because anyone can record your conduct. Do not underestimate the power of a friendly tone. Do not underestimate the impact that profanity will have on your credibility in a civil case.
32 Jon s Final Thoughts The Hundred Thousand Dollar Text
33 Jon s Final Thoughts New Areas of Concern INVASION OF PRIVACY Viewing recordings, surveillance, photos HIPPA and disclosure of medical information Social Networking Facebook Twitter YouTube
34 Jon s Final Thoughts
35 LMCIT Defense Cost Reimbursement Coverage Provides defense cost reimbursement to city officials for: Bankruptcy lawsuit Open Meeting Law lawsuit
36 MN Open Meeting Law Under MN Statute, Chapter 13D Lawsuit must be filed Provides for personal liability/civil penalty $300 civil penalty per occurrence Award up to $13,000 to plaintiff for costs, disbursements, and attorney fees If three violations, can be removed from office
37 Why provide coverage? Potentially only allegations Use of litigation costs to force elected officials to resign Personal exposure for defense costs a deterrent to run for office
38 LMCIT Defense Cost Reimbursement Coverage Triggered by a lawsuit Provides for legal expense reimbursement only City official retains control of who to hire City official determines course of defense, settlement, etc. $50,000 per official, $250,000 per year aggregate for member
39 Open Meeting Law Example Two lawsuits filed by different plaintiffs with different allegations against same city officials Consolidated by the court Triggered two different coverage limits Trial found 30 plus violations Elected officials paid penalties Cost to defend: $400,000 plus
40 Questions?
41 Darin Richardson LMCIT Jon Iverson Iverson, Reuvers, Condon Todd Milburn Brooklyn Park, MN
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