HomeMy WebLinkAboutAgenda Statement 1985/05/28 Item 10 COUNCIL AGENDA STATEMENT
Item 10
Meeting Date 5/28/85
ITEM TITLE: Resolution /7/-o3, Supporting SB 969 Involving Insurance,
Punitive Damages and Evidence in Civil Lawsuits
SUBMI'1TED BY: City Attorney ' /fit' (4/5ths Vote: Yes No X )
This report recommends that the City support proposed legislation, SB 969,
which would: (1) authorize insurance for punitive damages (2) allow the City
to indemnify employees for punitive damages and (3) amend the Evidence Code to
admit previously excluded evidence.
RECOMMENDATION: Adopt the resolution supporting SB 969
BOARDS/COMMISSIONS RECOMMENDATION: N/A
DISCUSSION:
The Chula Vista Police Officers' Association has forwarded to the Council some
correspondence received from the Peace Officers Research Association of
California (PORAC) regarding punitive damages. PORAC is supporting proposed
legislation which would change state law to: (1) allow the purchase of
insurance to cover punitive damages; (2) allow a City to pay punitive damages
incurred by one of its employees after first making a finding that the payment
would be in the "best interests of the public" and (3) permit useful evidence
which is presently excluded to be presented in court .
PORAC, through the Chula Vista Police Officers' Association, has forwarded to
us a model resolution which urges support for the proposed legislation. The
resolution notes the fact that lawsuits seeking punitive damages are on the
increase and that public officials are perceived to be unpopular defendants.
In addition, relevant evidence is withheld from juries in these cases that
would be helpful to the public officials. The proposed resolution maintains
that the award of punitive damages constitutes a disincentive to persons to
enter or remain in public service and is, therefore, contrary to the interests
of the public.
ANALYSIS:
There has been a great deal of discussion about this issue recently throughout
the State of California. As a member of the Legislative Committee for the
Air
by the . ':.;F T Cii of
Chula ;3ta,
Dated
Agenda Item No. 10
Meeting Date: 5/28/85
Page Two
City Attorneys Division of the League of California Cities, I have reviewed a
couple of different proposals to address this problem. The City Attorneys
Division has thus far been very critical of the proposals. The reasons it
gives are that punitive damages serve as a strong deterrent against improper
conduct. Punitive damages may only be awarded where a jury finds that the
wrongful acts were done intentionally and with malice. The fear is that if
public employees believe they can intentionally and maliciously harm others
and the City will pay the damages, we will experience more of this kind of
improper conduct. This argument seems to ignore the fact that payment of
punitives is discretionary with the City Council under the bill and employees
will not be able to presume payment.
Some defense trial attorneys have argued that the legislation would hurt them
in settling cases. Oftentimes, after an adverse judgment comes in, defense
attorneys are able to settle downward by agreeing not to appeal. When
punitive damages are awarded, defense attorneys will typically tell the
plaintiff's attorney that they have no option but to appeal unless that part
of the award is dropped. This strategy has apparently been effective for
public entities. The counter argument is that cities are in a stronger
position because they don't have to settle to avoid the potential of the
individual having to pay punitives.
There has also been some criticism of the argument that the award of punitive
damages has adversely affected the ability of cities to attract and retain
qualified employees. Many cities claim that they attract a large number of
applicants every time a police position opens and that they have not
experienced a significant number of resignations due to the problem with
punitive damages. They also point out that, when punitive damages are
awarded, the employee has the ability to come back against the public entity
by filing a "bad faith" lawsuit regarding the defense of the underlying
action. This often serves as a vehicle for making the employee whole.
Another argument against the proposed bill is that once it is law, cities will
have a difficult time refusing to indemnify a police officer when punitive
damages are awarded. Councilmembers will come under intense political
pressure from police officer associations to vote in favor of covering the
damages and it will be politically difficult for them to refuse even in cases
where punitives are justified. I have difficulty accepting this argument
because I don't think we should refuse to support meritorious legislation on
the assumption that City Councils will act improperly.
When I brought this legislation up at a recent San Diego-Imperial Counties
City Attorneys Association meeting, I was the only City Attorney who spoke in
favor of it. It is my understanding that Sid Maleck, the City Attorney for El
Monte, received a similar reception when he brought the legislation up before
the League's Legal Advocacy Committee.
)_03/
Agenda Item No. 10
Meeting Date: 5/28/85
Page Three
Despite all the criticism of the bill, I recommend that we support it. Chula
Vista recently had a case (Kasaty v. Chula Vista) where a police officer acted
exactly the way we had trained him to act and in a manner which was totally
reasonable under the circumstances. The convicted criminal turned around and
sued the police officer and was awarded damages for negligence. In the
course of discussing this verdict with jurors, I learned that there was some
sentiment in favor of awarding punitive damages. Had they been awarded, that
officer would have had to pay those damages out of his own pocket even though
he did exactly what we hoped he would do and exactly what he was trained to
do. The proposed legislation would allow us to avoid an injustice such as
that.
John Goss was recently a witness in a case up in the Oakland area where
punitive damages were awarded against a police chief under similar
circumstances. In that case, the judge threw out the award of punitive
damages, but it does illustrate the danger of juries coming in with
unwarranted verdicts. There are many judges who would not set aside a jury's
verdict no matter how unreasonable. By giving the City Council the authority
to review these awards and determine whether it feels it is in the best
interests of the public to pay them, we can protect against the potential for
an injustice to our employees.
The other features to the bill are less controversial. While California
presently prohibits insurance to cover punitive damages, there are other
states which allow this insurance. Conceivably a California city could
purchase this insurance in another state although questions as to conflict of
laws would arise.
I don't think that there is any opposition to the provision in the proposed
legislation that would amend the Evidence Code to prevent the exclusion of
"relevant" evidence in these cases. Presently a lifetime criminal can come in
and testify against a police officer without being impeached by introduction
of his crimes as long as they are misdemeanors and not felonies. This was
exactly the situation we confronted in Kasaty v. Chula Vista. A lifetime hood
with an antipolice bias went unimpeached because the California Supreme Court
has deemed that evidence of his criminal history of misdemeanor convictions is
"irrelevant". The jury in that case concluded that this witness was an
objective passerby citizen. This "hide the ball" approach to dealing with
juries has always been harmful to public entities in presenting their case.
The proposed amendment would allow such evidence to be admitted against the
party seeking punitive damages. It is not clear if it applies to the other
plaintiff witnesses. In either event, it represents a gain for cities.
CONCLUSION:
While there has been a great deal of criticism of this legislative proposal, I
would recommend that the Council support it. The injustice to the individual
employee who is forced to pay punitive damages out of his or her own pocket
for performing in a manner in which the City either directs or approves
outweighs the concerns about this bill.
FISCAL IMPACT: N/A
0408a