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HomeMy WebLinkAbout070918_cabs02 Regular Agenda JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of Commissioners - 10/FROM: Philip Morley, County Administrator and Risk Manager Or Philip C. Hunsucker, Chief Civil Deputy Prosecuting Attorn• DATE: July 9,2018 RE: Modernizing How the County Provides a Defense and Indemnity to Employees, Officers and Volunteers Who May be Sued for Acts or Omissions that Were, or in Good Faith Are Purported to be,within the Scope Official Duties STATEMENT OF ISSUE: Pursuant to RCW 4.06.010(1),the County is liable for damages arising out of its tortious conduct, or the tortious conduct of its"past or present officers, employees, or volunteers while performing or in good faith purporting to perform their official duties, to the same extent as if they were a private person or corporation." Consistent with RCW 36.16.136 and 36.16.138, the County contracts with the Washington Counties Risk Pool (WCRP)to provide liability coverage for its potential liability under RCW 4.06.010(1). The liability coverage provided to the County by the WCRP includes coverage for its past or present officers, employees, or volunteers. RCW 4.96.041(1) provides: Whenever an action or proceeding for damages is brought against any past or present officer, employee, or volunteer of a local governmental entity of this state, arising from acts or omissions while performing or in good faith purporting to perform his or her official duties, such officer, employee, or volunteer may request the local governmental entity to authorize the defense of the action or proceeding at the expense of the local governmental entity. RCW 4.96.041(2)provides: If the legislative authority of the local governmental entity, or the local governmental entity using a procedure created by ordinance or resolution, finds that the acts or omissions of the officer, employee, or volunteer were, or in good faith purported to be, within the scope of his or her official duties,the request shall be granted. If the request is granted,the necessary expenses of 1 Regular Agenda defending the action or proceeding shall be paid by the local governmental entity. Any monetary judgment against the officer, employee, or volunteer shall be paid on approval of the legislative authority of the local governmental entity or by a procedure for approval created by ordinance or resolution. The predecessor to RCW 4.96.041 was RCW 36.16.134. In 1986,the Jefferson County Board of Commissioners determined in its Resolution 87-86 that it was necessary to make orderly provision for the legal and financial protection of Jefferson County officers, employees and their material communities from personal liability for acts or omissions committed by such officers and employees while within the scope of their official County duties. Resolution 87-86 was based on RCW 36.16.134 and did not include indemnity for volunteers of the County. In 1988, the Jefferson County joined the WCRP by joining an Interlocal agreement with the passage of Resolution 81-88. In 1993,the State legislature passed House Bill 1218 which amended RCW 36.16.134 upon which Resolution 87-86 was based, authorizing local government entities to indemnify volunteers for acts or omissions that were, or in good faith purported to be, within the scope of the volunteer's official duties. In 2011,the County updated the Jefferson County Risk Management Policy in Resolution 36- 11. This policy was designed to comply with WCRP risk management requirements. However, Section 6.9 of Resolution 36-11 contains language that should be modified as discussed below. Resolution 87-86 has never been updated to include volunteers, even though the County, through the WCRP memorandum of liability coverage, provides liability coverage for volunteers. Resolution 87-86 also does not take advantage of RCW 36.27.040 which can be used to limit the County's exposure for legal fees, where a conflict of interest exists such that the County prosecuting attorney is precluded from defending an employee or officer of the County. ANALYSIS: Resolution 87-86 and Section 6.9 of Resolution 36-11 should be modernized to be consistent with RCW 4.96.041, RCW 36.27.040, and the current liability coverage and litigation environment. San Juan County has enacted Chapter 2.11 of its County Code to address these issues. San Juan County's Chapter 2.11 is mostly a well-considered means of addressing this issue. However, San Juan County's Chapter 2.11 does not include the overlayof RCW 36.27.040. The prosecuting attorney and the County administrator/risk manager recommend consideration of a proposed ordinance, along the lines of the working draft attached to this agenda request to 2 Regular Agenda modernize the County's process for providing a defense and indemnity to County employees, officers, and volunteers. The working draft of a proposed ordinance attached to this agenda request: • Adds volunteers to the persons to be defended and indemnified by the County. • Delegates the decision whether to defend to the prosecuting attorney with the concurrence of the risk manager to take advantage of the use of RCW 36.27.040. • Requires that an employee, officer, or volunteer who requests a defense take steps to not increase the liability of the County. • Reduces the possibility that a County employee, officer, or volunteer (or their marital communities) will incur personal liability acts or omissions committed by such persons while acting or in good faith purporting to act within the scope of their official County duties. • Replaces a resolution with an ordinance, ensuring that all County employees, elected officials, officers and volunteers must follow its provisions. FISCAL IMPACT: We expect the fiscal impact of this ordinance to be neutral, given that the WCRP already provides liability coverage and the deductible under the WCRP memorandum of liability coverage is per occurrence, not per person. RECOMMENDATION: Participate in a briefing session on the need for modernizing existing Resolution 87-86 regarding indemnification and tort representation of Jefferson County employees and officers and amending the existing Jefferson County Risk Management Policy in Resolution 36-11. DEPARTMENT CONTACT: Philip C. Hunsucker, Chief Civil Deputy Prosecuting Attorney at Extension 219. REVIEWED BY: Phi ip Morley, CunQ Adn Iistr-ator Date 3 COUNTY OF JEFFERSON STATE OF WASHINGTON An Ordinance Repealing and Replacing ) the Existing Resolution 87-86 Regarding ) Indemnification and Tort Representation ) of Jefferson County Employees and ) ORDINANCE NO. Officers and Amending the Existing ) Jefferson County Risk Management ) Policy in Resolution 36-11. ) WHEREAS, in 1986, the Jefferson County board of commissioners determined in its Resolution 87-86 that it was necessary to make orderly provision for the legal and financial protection of Jefferson County officers, employees and their material communities from personal liability for acts or omissions committed by such officers and employees while within the scope of their official county duties; and WHEREAS, in 1988, the Jefferson County joined the Washington Counties Risk Pool (WCRP) by joining an Interlocal agreement with the passage of Resolution 81-88; and WHEREAS, in 1993, the legislature of the State of Washington passed House Bill 1218 which amended RCW 36.16.134 upon which Resolution 87-86 was based, authorizing local government entities to indemnify volunteers for acts or omissions that were, or in good faith purported to be, within the scope of the volunteer's official duties; and WHEREAS, in 2011, Jefferson County updated the Jefferson County Risk Management Policy in Resolution 36-11 in an effort to comply with WCRP risk management requirements; and WHEREAS, Jefferson County provides its officers, employees, and volunteers liability coverage through its association with the WCRP and workers compensation insurance through the Washington State Department of Labor and Industries; and WHEREAS, volunteers perform valuable services on behalf of Jefferson County; and WHEREAS, RCW 36.16.134 was re-codified to RCW 4.96.041 and now provides that Jefferson County may protect volunteers, as well as employees and officers; and WHEREAS, Resolution 87-86 has never been updated to include volunteers, even though Jefferson County, through the WCRP memorandum of liability coverage, provides liability coverage for volunteers; and WHEREAS, Resolution 87-86 also does not take advantage of RCW 36.27.040 which can be used to limit Jefferson County's exposure for legal fees, where a conflict of interest exists such that Jefferson County prosecuting attorney is precluded from defending an employee or officer of Jefferson County. 1 WHEREAS, the Jefferson County board of commissioners has determined that Resolution 87-86 should be updated to reflect the the changes made by the legislature to the authorizing statute; and WHEREAS, the Jefferson County board of commissioners has determined that volunteers should be provided the same indemnity protection as officers and employees. THERFORE, BE IT RESOLVED, that: Section 1. Chapter 2.05 of the Jefferson County Code shall be added as set forth in Appendix A. Section 2. Resolution 36-11 is amended to delete section 6.9 in its entirety. Section 3. Should any section, subsection, paragraph, sentence, clause or phrase of this ordinance or Chapter 2.05 JCC adopted by it be declared unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining portions of this ordinance or Chapter 2.05 JCC. Section 4. This ordinance is effective immediately upon passage by the Jefferson County board of commissioners. DATED this day of , 2018. SEAL: JEFFERSON COUNTY BOARD OF COMMISSIONERS David Sullivan, Chair Kathleen Kler, Member Kate Dean, Member ATTEST: Carolyn Gallaway Deputy Clerk of the Board Approved as to form only: Philip C. Hunsucker Date Chief Civil Deputy Prosecuting Attorney 2 APPENDIX A Chapter 2.05 INDEMNITY OF EMPLOYEE LEGAL DEFENSE COSTS—CLAIMS FOR DAMAGES Sections: 2.05.010 Purpose. 2.05.020 Procedure for findings and determination and right of appeal. 2.05.030 Payment of defense costs and settlements. 2.05.040 Procedure for approval and payment of judgment. 2.05.050 Duties of employees. 2.05.010 Purpose. The purpose of this chapter is to make orderly provision for the legal and financial protection, as authorized by RCW 4.96.041, of all past and present employees, officers, agents, elected and appointed officials and volunteers and their marital communities from personal liability and defense costs for acts or omissions committed by such persons while acting or in good faith purporting to act within the scope of their official county duties. 2.05.20 Definitions. For purposes of this Chapter the following definitions apply: (1) "Appointment" means appointment of a deputy prosecuting attorney or special deputy prosecuting attorney pursuant to RCW 36.27.040 to defend an employee. (2) "Claim"means a demand for monetary compensation as a result of injury or damages allegedly caused by the county, its officers or employees, agents, or volunteers and does not include claims that have been transformed into civil lawsuits filed in state or federal court. (3) "Claims Coordinator"means the person in the county administrator's office that is designated by the risk manager to handle and process the claims and lawsuits for the county and to serve as the county's liaison with the provider of liability coverage regarding the administration of the county's claims. (4) "Employee" means a past or present employee, officer, agent, elected, appointed official or volunteer who seeks to have Jefferson County or its provider of liability insurance defend or indemnify him or her from a claim. "Employee" includes the marital community of a past or present employee, officer, agent, elected, appointed official or volunteer. (5) "Lawsuit"means a civil lawsuit filed in state or federal court; 3 (6) "Liability coverage"means liability coverage provided to the county by a provider of liability coverage. (7) "Prosecuting attorney" means the county prosecuting attorney, unless the claim is against the prosecuting attorney, or the county prosecuting attorney's deputies or employees, in which case prosecuting attorney means the prosecuting attorney of an adjoining county selected by the risk manager. (8) "Provide fullest assistance"means provide information,testimony, exhibits and documents in a timely manner. In response to notification by the prosecuting attorney, designate a department representative to assist the prosecuting attorney during discovery and, preparations for trial in lawsuits. (9) "Provider of liability coverage"means the party to an agreement with the county who provides, on behalf of the county, a defense or indemnity from claims covered or potentially covered by the agreement, including but not limited to an insurance policy issued by and insurance company or a memorandum of liability insurance issued by a risk pool. (10) "Risk manager"means the county's appointed risk manager. If no risk manager has been appointed, then risk manager means the county administrator. 2.05.030 Procedure for findings and determination whether a defense is due and right of appeal. (1) The board of county commissioners delegates the determination and making of the finding of whether the acts or omissions of the employee complained of were, or in good faith purported to be, within the scope of their official duties to the prosecuting attorney with the concurrence of the risk manager. (2) If the prosecuting attorney determines to grant a request for defense but the county's risk manager disagrees,the decision of the prosecuting attorney shall control, and the county shall proceed to defend and indemnify the employee at its own expense. (3) The prosecuting attorney shall promptly inform the employee, in writing, by delivery of the findings and determination, such findings and determination shall be sent by first class mail return receipt requested. (4) If deemed appropriate by the prosecuting attorney, findings and a determination may be subject to a reservation of rights. 4 (5) If the prosecuting attorney decides to deny a request for defense, the employee may appeal such determination to the board of county commissioners by filing a written request for appeal within 10 days after receipt of the findings and determination. 2.05.40 Payment of defense costs and settlements. (1) Where no conflict of interest exists that prohibits the prosecuting attorney from representing the employee,the defense of the employee shall be by the county prosecuting attorney, unless a special deputy is appointed pursuant to RCW 36.27.040 with the concurrence of the risk manager. (2) Where a conflict of interest exists that prevents the prosecuting attorney from representing the employee, the prosecuting attorney shall appoint a special deputy pursuant to RCW 36.27.040. (3) Pursuant to the authority granted by RCW 4.96.041 the county shall expend funds for the payment of necessary legal fees and costs of defense, settlements and judgments resulting from claims against such employee upon an granted by findings and determination as provided in JCC 2.05.030 and to purchase liability coverage for such claims and expenses pursuant to the authority granted by RCW 36.16.136 and 36.16.138. 2.05.050 Procedure for approval and payment of judgment. Where a request for defense has been granted by findings and determination as provided in JCC 2.05.030, and the judgment is covered by and within the limits of the insurance purchased by the county,payment by the provider of liability coverage is hereby approved and any deductible shall be paid by the county on receipt of billing from the provider of liability coverage. If liability coverage is unavailable, insufficient, or the judgment against the employee is for punitive damages,then approval for payment of judgment, interest, costs, and attorney fees thereon shall be by resolution of a majority of the board of county commissioners. 2.05.60 Duties of employees. (1) Any employee contacted or served with a claim, demand, summons or complaint shall immediately notify and deliver any documentation received to the prosecuting attorney and the risk manager, together with a written request for defense. (2) In response to a request by the county risk manager or prosecuting attorney, and forwarding to the claims coordinator, a certificate of insurance from any third party, where a third-party, e.g., a vendor for the county, is contractually obligated to provide the county with liability 5 coverage (typically names the county as an"additional insured") as a precondition to performing services or providing goods to the county, or any of its elected officials, agencies or divisions. (3) The employee shall provide fullest assistance to the county and its provider of liability coverage and assist in the conduct of lawsuits, the investigation of claims, and in enforcing any right of contribution or indemnity and shall attend pre-trial hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses. (4) In response to notification by the prosecuting attorney,the employee shall designate a department representative to assist the prosecuting attorney during discovery and, preparations for trial. (5) Except as specifically directed by the prosecuting attorney, no county officer or employee may engage in any of the following acts with respect to actions or proceedings for damages defended pursuant to this chapter: (a) Engage or retain legal counsel at county expense; (b) Encourage the filing of a claim or lawsuit against the County; (c) Attempt to settle a claim, or lawsuit or interfere in any way with an investigation of an employee who is being defended by the county by a professional oversight or regulatory entity; (d) Negotiate or otherwise affect the settlement of such a claim or a lawsuit for damages against the county; (e) Make an admission of fault or liability involving such a claim or a lawsuit for damages against the county; or (f) Discuss with persons who are not county employees or collective bargaining unit representatives, facts, and circumstances of the claim. 6