Honolulu City Council Policy Resolutions(Link to original Word Processing Version)
93-367
TO AUTHORIZE THE CITY AND COUNTY OF HONOLULU TO INDEMNIFY CERTAIN
EMPLOYEES AND OFFICERS OF THE CITY.
WHEREAS, Section 2-101 of the Revised Charter of the City
and County of Honolulu 1973, as amended (the "Revised Charter"),
provides, in pertinent part, that the "city shall have and may
exercise all powers necessary for local self-government" and that
"the city shall have and may exercise all powers it would be
competent for [the] charter to enumerate expressly"; and
WHEREAS, pursuant to Section 5-203 of the Revised Charter,
the Department of the Corporation Counsel is obligated to defend
employees and officers of the City in matters relating to their
official powers and duties; and
WHEREAS, pursuant to said Revised Charter section, the
Department of the Corporation Counsel is required to determine
whether the subject matter of the lawsuit relates to the official
powers and duties of the employees and officers of the City,
unless otherwise provided by federal or state law; and
WHEREAS, the Department of the Corporation Counsel has
traditionally defended employees and officers of the City unless
it has determined that an actual conflict of interest existed,
which would require disqualification under the Hawaii Code of
Professional Responsibility; and
WHEREAS, traditionally, the mere allegation of punitive or
exemplary damages in a civil complaint did not necessarily result
in a determination by the Department of the Corporation Counsel
that it was disqualified from representing employees and officers
of the City; and
WHEREAS, prior advisory opinions from the Office of
Disciplinary Counsel, State of Hawaii, have validated the
Department of the Corporation Counsel's practice of determining
ethical conflicts of interest on a case-by-case basis; and
WHEREAS, a September 17, 1993 advisory opinion from the
Office of Disciplinary Counsel, State of Hawaii, stated in
relevant part that:
It is my office's opinion that [the Department of
the Corporation Counsel] would be ethically precluded
from continuing to represent the individual [employees
and officers] unless the City can and will indemnifythem for any punitive damages awarded in the event of
an adverse decision in the . . . lawsuit.
and
WHEREAS, in lawsuits filed against employees and officers of
the City, counsel for plaintiffs often allege punitive or
exemplary damages against said individual employees and officers
as a matter of course; and
WHEREAS, historically, despite such routine allegations in
the pleadings, punitive damages rarely have been assessed against
employees and officers of the City; and
WHEREAS, in the event special counsel is required to
represent employees and officers based upon the mere allegation
of punitive damages against them, the City would be required to
pay for such legal services and any costs associated therewith;
and
WHEREAS, the City Council has determined that the legal
services and any costs associated therewith would be prohibitive;
and
WHEREAS, the City Council is also concerned that malicious,
willful, wanton, oppressive, or criminal acts of employees and
officers should not be condoned or encouraged; and
WHEREAS, after considering the need to conserve public funds
and the need to discourage grossly improper behavior of City
employees and officers, the City Council has decided to adopt the
following procedure:
a) Pursuant to Section 5-203 of the Revised
Charter, the Department of the Corporation Counsel
shall determine whether a City employee or officer is
entitled to a defense to be provided by the City in a
lawsuit, unless otherwise provided by federal or state
law;
b) The Department of the Corporation Counsel
shall determine, on a case-by-case basis, whether a
City employee, as defined in Section 13-101.3 of the
Revised Charter, and the City police chief (who is
named as a matter of course in almost every lawsuit
involving City police officers), shall be entitled toindemnification by the City from any compensatory or
punitive damages assessed against such employee in the
lawsuit; and
c) The City Council, upon recommendation by the
Department of the Corporation Counsel, shall determine,
on a case-by-case basis, whether a City officer (except
the City police chief), as defined in Section 13-101.4
of the Revised Charter, and the City prosecuting
attorney, shall be entitled to indemnification by the
City from any compensatory or punitive damages assessed
against such officer in the lawsuit;
and
WHEREAS, under this procedure, once the City has an
obligation to defend, the Department of the Corporation Counsel
would undertake representation of the employee or officer if the
decision is to indemnify despite allegations of punitive damages,
but the Department of the Corporation Counsel would seek the
appointment of special counsel to defend the employee or officer
if the decision is not to indemnify; and
WHEREAS, the City Council deems it prudent to require that,
where the Department of the Corporation Counsel or the City
Council determines that a City employee or officer is entitled to
indemnification by the City, the employee or officer shall have a
continuing duty to reasonably cooperate in good faith with the
City in its defense of the lawsuit; and
WHEREAS, the City Council further finds it prudent to
provide that an employee's or officer's failure to reasonably
cooperate in good faith with the City in its defense of the
lawsuit, in the form of fraud, misrepresentation, failure to
cooperate, and the like, shall be deemed a breach by said
employee or officer which may result in a decision to rescind the
agreement to indemnify; and
WHEREAS, by Resolution No. 93-324, adopted October 13, 1993,
the City Council adopted a procedure allowing the Department of
the Corporation Counsel solely to determine the issue of future
indemnification for all City employees and officers; and
WHEREAS, pursuant to Section 1-5.2 of the Revised Ordinances
of Honolulu 1990, the City Council desires to repeal in its
entirety Resolution No. 93-324; and
BE IT RESOLVED by the Council of the City and County of
Honolulu that:
(1) Pursuant to Section 1-5.2 of the Revised Ordinances of
Honolulu 1990, Resolution No. 93-324 is hereby repealed in its
entirety; and
(2) The City shall adopt the following procedure for the
determination of the defense and indemnification of City
employees and officers:
a) Pursuant to Section 5-203 of the Revised
Charter, the Department of the Corporation Counsel
shall determine whether a City employee or officer is
entitled to a defense to be provided by the City in a
lawsuit, unless otherwise provided by federal or state
law;
b) The Department of the Corporation Counsel
shall determine, on a case-by-case basis, whether a
City employee, as defined in Section 13-101.3 of the
Revised Charter, shall be entitled to indemnification
by the City from any compensatory or punitive damages
assessed against such employee in the lawsuit;
c) The City Council, upon recommendation by the
Department of the Corporation Counsel, shall determine,
on a case-by-case basis, whether a City officer, as
defined in Section 13-101.4 of the Revised Charter,
shall be entitled to indemnification by the City from
any compensatory or punitive damages assessed against
such officer in the lawsuit; and
d) For the purposes of this resolution, the City
prosecuting attorney shall be treated as a City officer, and
notwithstanding (c) above, the City chief of police shall be
treated as a City employee;
and
(3) If a City employee or officer is entitled to a defense
and indemnification in the lawsuit, the Department of the
Corporation Counsel shall represent said employee or officer in
accordance with Section 5-203 of the Revised Charter; and
(4) If a City employee or officer is entitled to a defense
provided by the City, but the Department of the Corporation
Counsel or the City Council determines that said employee or
officer is not necessarily entitled to indemnification by the
City, the Department of the Corporation Counsel shall seek the
appointment of special counsel for the employee or officer in
accordance with Section 5-204.3 of the Revised Charter; and
(5) In all cases where the Department of the Corporation
Counsel or the City Council determines that a City employee or
officer is entitled to indemnification by the City, the
indemnification shall be conditioned on a continuing duty by the
employee or officer to reasonably cooperate in good faith with
the City in its defense of the lawsuit, the breach of which duty
by the employee or officer, in the form of fraud,
misrepresentation (including but not limited to misrepresentation
of facts and circumstances relied on in the determination of
entitlement to indemnification), failure to cooperate, and the
like, may result in a decision to rescind the agreement to
indemnify; and
(6) No City employee or officer shall be entitled to
indemnification by the City unless he or she agrees to the
conditions set forth in Section (5) above in a writing
satisfactory in form and content to the Department of the
Corporation Counsel; and
(7) Nothing in this Resolution and in the now-repealed
Resolution No. 93-324 shall be construed as a waiver of the
City's immunity from punitive damages as established by common
law, federal law, state law, or any other law or ordinance; and
(8) Nothing in this Resolution shall be construed to
enlarge the rights of City employees and officers to a defense or
indemnification, but only to recognize the discretionary power of BE IT FINALLY RESOLVED by the Council that the Clerk be and is hereby directed to transmit copies of this resolution to the Corporation Counsel.
INTRODUCED BY:
Gary Gill (BR)
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DATE OF INTRODUCTION:
November 22, 1993
ADOPTED this 1 day of December , 1993. (OCS/111693/pn) |