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Defending and indemnifying an employee being sued for damages for acts or omissions that occurred in the performance of official duties

Defending and indemnifying an employee being sued for damages for acts or omissions that occurred in the performance of official duties
Larson v County of Seneca, 2009 NY Slip Op 50177(U), Decided on February 5, 2009, Supreme Court, Ontario County, Supreme Court Justice Craig J. Doran

In this action James R. Larson, a former undersheriff, Seneca County, asked Supreme Court for a declaration that Seneca County was obligated, pursuant to Public Officers Law Section 18,* to defend, indemnify and hold him harmless in two civil actions pending in Federal court in which he was named a respondent.

Supreme Court Justice Craig J. Doran set out a number of guidelines for determining if Section 18 is available to a municipal employee being sued in federal or state courts.

Justice Doran said that under Public Officers Law §18(3)(a), a municipality is required to provide for an employee's defense in any civil action, state or federal, "arising out of any alleged act or omission which occurred or allegedly occurred while the employee was acting within the scope of his [or her] public employment or duties.

"A municipality?s obligation to indemnify arises from Public Officers Law §18(4)(a) in cases where "the act or omission from which such judgment or claim arose occurred while the employee was acting within the scope of his [or her] public employment or duties." The obligation to indemnify is further tempered by the qualification that the injury or damage sued upon did not result from intentional wrongdoing or recklessness by the employee (Public Officers Law §18[4][b]).

The statute, said Justice Doran, imposes a two-part test to be applied in determining whether the municipality is required to provide for a defense.

If the employee satisfies the first part of this two-part analysis, the municipality must provide a defense. The first part of the test requires a review of the complaint against the employee to determine if it is alleged that the public employee committed a wrongful act within the scope of his public employment.

The second part of the test requires the municipality to investigate the alleged acts to ascertain whether it did in fact occur while the employee was acting with the scope of his public employment or duties.

Significantly, the court noted that ?Irrespective of the allegations of the complaint, if the municipality's investigation demonstrates that the wrongful act or omission actually occurred within the scope of the public employee's duties, the public entity must provide a defense.?

In this instance the issue was complicated by the fact that Larson was earlier convicted of Official Misconduct, constituting intentional acts of wrongdoing. Accordingly, Seneca County argued that Larson?s conduct was outside the scope of his duties as undersheriff and thus it is not obligated to provide for his defense and indemnifications under Section 18.

Justice Doran disagreed, noting that the County cannot rely on the acts set forth in the criminal indictment ?as a way in which to insulate itself from its obligation to defend because of a criminal indictment that has nothing to do with the complaints raised by the ? plaintiffs? in the federal action.

The court granted Larson?s petition insofar as it requested that the County be compelled to provide for his defense in the federal in which he was a defendant.

However, as the duty to indemnify is conditioned upon the nature of the conduct giving rise to the plaintiff's damages in the Federal civil action, Justice Doran said that a determination concerning this branch of Larson?s petition must be deferred until after the trial in the Federal action, after which the nature of the Larson's liability will be ?more particularly ascertained.?

The text of the full decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2009/2009_50177.htm

* Section 17 of the Public Officers Law provides for the defense and indemnification of employees of the State as an employer being sued in federal or state courts.

Full post as published by New York Public Personnel Law on February 13, 2009 (boomark / email).