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An ordinance amending Chapter 2.40 of the Metropolitan Code of Laws relative to the Department of Law.
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WHEREAS, Chapter 2.40 of the Metropolitan Code of Laws outlines some of the duties and powers of the Department of Law of the Metropolitan Government of Nashville and Davidson County (“Metro”); and,
WHEREAS, it is necessary to clarify the Department of Law’s authority to settle claims on behalf of Metro employees in the course of their official duties; and,
WHEREAS, the threshold amounts for settlements that may be approved by the Department of Law without Council approval should be updated to reflect current legal and financial considerations, improving efficiency and administrative processes; and,
WHEREAS, the current indemnification provisions require revision to conform with longstanding practices and to provide clarity regarding the circumstances under which Metro employees may be indemnified for legal claims arising from their employment; and,
WHEREAS, it is in the best interest of the Metropolitan Government to update the Metropolitan Code to implement these changes.
NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. Section 2.40.100 of the Metropolitan Code and its caption are hereby amended by deleting the caption and section in its entirety and substituting in lieu thereof the following:
“Settlement of claims against metropolitan government and its employees.
The metropolitan attorney is authorized to settle any property damage claim against the metropolitan government for an amount not to exceed thirty-five thousand dollars, and any other type of claim against the metropolitan government or any official, whether elected or appointed, officer, employee, or member of a board or commission of the metropolitan government who was acting on behalf of the metropolitan government for purposes of the claim, for an amount not to exceed twenty-five thousand dollars.”
Section 2. Section 2.40.110 of the Metropolitan Code is hereby amended by removing the section in its entirety and substituting in lieu thereof the following:
“The department of law is authorized to settle all claims for damages to metropolitan government property caused by the negligent or unlawful acts of others, for an amount not to exceed thirty-five thousand dollars. Upon settlement of such claims, the proceeds derived therefrom shall be paid into the metropolitan government treasury in accordance with the procedure established by the Charter or the director of finance pursuant thereto.”
Section 3. Section 2.40.115 of the Metropolitan Code is hereby amended by removing the section in its entirety and substituting in lieu thereof the following:
“A. Quarterly report of significant litigation: Within sixty days after the end of each calendar quarter, for all suits in which an attorney in the department of law is counsel of record for the metropolitan government, or the department of law has hired or is supervising an outside attorney as counsel of record for the metropolitan government, the metropolitan attorney shall report to the metropolitan council if the suit includes claims being asserted against the metropolitan government that seek a total amount greater than three hundred thousand dollars. Each quarterly report shall include the names of the parties, the court in which the case is pending, the case number, the nature of the claims, the amount of damages sought, any other remedies being sought against the metropolitan government, and the name of counsel of record for the metropolitan government if not employed in the department of law.
B. Report of judgments entered against the metropolitan government: The metropolitan attorney shall report to the metropolitan council all judgments entered against the metropolitan government within sixty days after the date that the judgment becomes final. Such report shall include, but not be limited to, the names of the parties, the court in which the case is pending, the case number, the amount of the judgment, and a summary of the facts giving rise to the lawsuit.”
Section 4. Section 2.40.130 of the Metropolitan Code is hereby amended by removing subsection A in its entirety and substituting in lieu thereof the following new subsection:
“A. The metropolitan government authorizes its department of law to furnish defense counsel to any employee against whom a claim is asserted arising out of the employee’s acts or omissions taken on behalf of the metropolitan government for purposes of the claim, provided the employee promptly notifies the department of law when suit is served upon the employee, makes a request to the Department of Law for defense counsel, cooperates with the defense counsel furnished, and has no insurance coverage protecting the employee from damages up to the amounts provided hereafter in this section.”
Section 5. Section 2.40.130 of the Metropolitan Code is hereby amended by removing subsection C in its entirety and substituting in lieu thereof the following new subsection:
“C. In those matters wherein an employee meets the criteria for defense counsel in subsections A and B, the director of law shall authorize reimbursement to the employee of the reasonable fees and expenses incurred in the employee’s defense, subject to any applicable regulations promulgated by the director of finance. The director of finance, in consultation with the director of law, shall promulgate regulations concerning reimbursement of fees and expenses, including, but not limited to, the hourly rate, the nature and timing of billing, and requirements for prior approval for extraordinary expenses.”
Section 6. Section 2.40.140 of the Metropolitan Code is hereby amended by removing subsection A in its entirety and substituting in lieu thereof the following new subsection:
“A. The metropolitan government is authorized to indemnify an employee from a judgment against the employee to an amount as provided hereafter if:
1. The judgment results from an act or omission of the employee taken on behalf of the metropolitan government;
2. The employee was furnished defense counsel at the metropolitan government’s expense, and the employee has cooperated with that defense counsel;
3. The employee has no insurance coverage protecting the employee from damages up to the amounts provided hereafter in this section; and
4. The judgment results from a legal claim challenging conduct that did not constitute a flagrant violation of law or policy, as determined by the employee’s department, board, commission, or agency head and the director of law, in their discretion.”
Section 7. Section 2.40.140 of the Metropolitan Code is hereby amended by removing subsection B in its entirety and substituting in lieu thereof the following new subsection:
“B. The director of law and the head of the department, board, commission, or agency in which the employee is employed shall have the discretion to determine what amount, if any, an employee may be indemnified, subject to Section 8.103(e) of the Metropolitan Charter, but in no event shall such indemnity exceed two hundred thousand dollars for each person injured or property damaged in one incident or accident, and four hundred thousand dollars for all personal injuries and property damage in one incident or accident.”
Section 8. This ordinance shall take effect from and after its final passage, the welfare of the Metropolitan Government of Nashville and Davidson County, Tennessee, requiring it.
Agenda Analysis
Analysis
This ordinance amends Chapter 2.40 of the Metropolitan Code of Laws, which outlines some of the powers and duties of the Department of Law.
As amended, the ordinance under consideration would amend Section 2.40.100 of the Metropolitan Code to increase the threshold for what property damage claims the Metropolitan Attorney is authorized to settle without explicit Council approval. Currently, the Metropolitan Attorney is authorized to settle any property damage claim under $15,000. All property damage settlements exceeding this amount must be explicitly approved by the Council. The amended ordinance would increase this threshold to $25,000. The amended ordinance would also require the Metropolitan Attorney to consult with the applicable department head or delegee before a claim is settled.
Section 2.40.100 would also be amended to increase the settlement authorization threshold from $5,000 to $25,000 that would apply to any other type of claim (i.e. not property damage) against the Metropolitan Government. The amended language would extend this same settlement authorization to claims against officials, officers, employees, or board and commission members of the Metropolitan Government.
Section 2.40.110 of Metropolitan Code would be amended to authorize the Department of Law to settle claims for damages to Metropolitan Government property caused by negligent or unlawful acts of others if the amount does not exceed $25,000. Currently, this threshold is $5,000. The amended ordinance would also require the Department of Law to consult with the applicable department head or delegee before a claim is settled. The head of a department would also be provided written notice if any settlement funds come from the operating budget of a department.
Under the existing Section 2.40.115 of the Metropolitan Code, the Department of Law provides the Metropolitan Council with a quarterly report of significant litigation. The report is due 30 days after the end of each calendar quarter. The ordinance under consideration would change 30 days to 60 days. This section also requires a report of judgments entered against the Metropolitan Government. The report is due within 30 days of the date the judgment becomes final. The ordinance under consideration would change 30 days to 60 days. The amended ordinance would also require this report to include the hourly rate of any outside counsel involved in significant litigation and the amount of funding paid in the matter.
Section 2.40.130 would be amended to clarify existing language regarding when the Department of Law will represent an employee of the Metropolitan Government. No substantive changes would be made to this section.
Section 2.40.140 would be amended to clarify and simplify language regarding when the Metropolitan Government is authorized to indemnify an employee from a judgement against the employee. There are currently two requirements - that the judgment arises from an act or omission arising out of the employee’s performance of their official duties and does not result from willful, wanton, or malicious wrongdoings or violations of departmental rules or orders and that the Department of Law has furnished defense counsel to the employee and the employee has cooperated with the defense counsel. This language would be reorganized and language would be amended to better conform to longstanding practices. In addition, another condition would be added that the employee has no insurance coverage protecting the employee from damages up to the amounts provided in the section.
In addition, Section 2.40.140 also contains the amount up to which the Metropolitan Government will indemnify an employee. Currently, that amount is $50,000 per person or property damaged in one incident or accident and $100,000 for all personal injuries and property damage in one incident or accident. This ordinance would increase that amount to $250,000 per person or property damaged in one incident or accident and $400,000 for all personal injuries and property damage in one incident or accident.