Monday, August 20, 2007
San Diego Must Pay Fees of Officials Sued by City—C.A.
By a MetNews Staff Writer
Members of the City of San Diego Retirement Board, who were sued by the city attorney on conflict-of-interest allegations that were later dropped, are entitled to recover the attorney fees they incurred in obtaining a ruling that the city was liable for their defense, the Fourth District Court of Appeal has ruled.
Div. One Friday ordered publication of its July 25 opinion in favor of board members John A. Torres, Ronald L. Saathoff, Cathy Lexin, Terri A. Webster, Sharon K. Wilkinson, Bruce Herring and Mary Vattimo. San Diego Superior Court Judge Linda B. Quinn last year awarded more than $182,000 in fees incurred by the seven in a declaratory action they brought against the city.
The members brought the declaratory action after the City Council failed to authorize payment of their defense costs in two actions brought by City Attorney Michael Aguirre. The city attorney alleged that the board members breached their duty to the public by approving unfunded increases in employee pension benefits and that they had a conflict of interest in doing so.
The board members contended that the city owed them a defense under Government Code Sec. 995—which requires, with some exceptions, that a public entity bear the costs of defense when its officials or employees are sued in connection with the performance of their official duties—and under a resolution adopted by the council three years earlier.
The resolution required the city to “defend, indemnify and hold harmless all past, present and future members of the Retirement Board against all expenses, judgments, settlements, liability and other amounts actually and reasonably incurred by them in connection with any claim or lawsuit arising from any act or omission in the scope of the performance of their duties as Board Members.”
Quinn granted summary judgment in favor of the board members, declaring that they were entitled to a defense from the city because none of the statutory exceptions applied.. She later granted their motion for attorney fees, which she ruled they were entitled to under the resolution.
As for the underlying suits, the city attorney moved to dismiss the individual board members after they filed various motions, including a motion to disqualify the city attorney and his office on the ground that they had a conflict of interest based on advice they had given to one of the board members regarding matters related to the suit.
Presiding Justice Judith McConnell, writing for the Court of Appeal, sided with the board members and the trial judge. Nothing in the resolution, she wrote, indicated that the members’ right to attorney fees was limited to those incurred in the underlying action.
The presiding justice acknowledged that the council “likely did not foresee” that a situation might develop in which the city would sue its own officials and be forced to fund both sides of the litigation. But the text of the resolution does not foreclose the possibility, she said.
McConnell suggested that a different result might apply if the city had found wrongdoing on the part of the members, triggering an exception to Sec. 995. But the council never made any such finding.
“Contrary to Aguirre’s position in this appeal, his filing of the underlying civil actions is not tantamount to the City Council making a finding of wrongdoing, particularly since there is no evidence the City Council even approved of his filing of the actions,” the presiding justice wrote. “Further, Aguirre dismissed the civil actions against the board members before any findings on the merits were made, and thus there was no showing of any actual conflict of interest.”
The board members were represented by seven different law firms, including Sheppard, Mullin, Richter & Hampton and Gibson, Dunn & Crutcher.
The case is Torres v. City of San Diego, 07 S.O.S. 5104.
Copyright 2007, Metropolitan News Company