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Tuesday, November 18, 2014

City Not Obligated to Indemnify Attorneys' Fee Award

The 7th Circuit recently reversed the ruling of a trial court judge that awarded attorneys' fees in an excessive force case.  In Winston v. O'Brien (7th Cir. Nov. 7, 2014), a person detained at a Chicago police station alleged that he was tasered repeatedly and punched while in handcuffs.  He sued two Chicago police officers for using excessive force, and the jury awarded him $1.00 in compensatory damages and $7,500 in punitive damages against one of the officers.  The district court ordered the City to pay Winston's attorney’s fees of $187,467.00, along with an additional $90,777.00, associated with the legal work involved in trying to collect the fees. 

Winston then filed a petition seeking to make the City responsible to pay the attorneys' fee award, arguing that the City was required to pay for fees under state law (745 ILCS 10/9-102):

A local public entity is empowered and directed to pay any tort judgment or settlement for compensatory damages (and may pay any associated attorney’s fees and costs) for which it or an employee, while acting within the scope of his employment is liable in the manner provided in this Article.  (Emphasis added) 

On appeal, the City argued that the district court lacked authority to hold the City responsible for the attorneys' fee award against the officer.  The 7th Circuit Court of Appeals ruled in favor of the City, finding that state law does not mandate indemnification of attorneys' fees - instead, the language of section 9-102 states that municipalities "may pay any associated attorney's fees and costs."  The court also rejected Winston's argument that a union agreement mandated indemnification of the attorneys' fee award against the officer.  As a result, the court concluded that the district court erred in ordering the City to pay the officer's attorneys fee award.  

Sometimes, in cases of this nature, where a good settlement of all claims can be reached, the punitive damage claim is dropped, but the amount paid reflects the presence of the punitive damage claim.  The Winston case tells us that Illinois governmental bodies are not authorized to pay either punitive damages or plaintiff’s attorney’s fees incurred in producing punitive damage judgments.  Governments have complete discretion as to whether attorney’s fees or costs will be paid in civil rights cases where a plaintiff is awarded significant compensatory damages.  When a very small amount of compensatory damages are awarded in a case that does not establish some important principle of federal constitutional law, the courts will generally resist awarding any significant amount of fees.  Governments choosing not to pay attorneys fees need to consider the morale factor, since the plaintiff can personally pursue the assets of the public employee defendant whose actions caused the civil rights judgment.  One final wrinkle to this rule is that, in some instances, either conventional insurance policies or scope of coverage of governmental self-insurance pools may more clearly obligated themselves above the level of the Illinois statutes to pay awarded attorney’s fees

Post Authored by Stewart Diamond, Ancel Glink


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