Petitioner city sought mandate relief from an order of respondent Los Angeles County Superior Court, California, denying it a jury trial on unstayed issues raised by real party in interest former employee, who sought a declaration that the city was contractually obligated to provide him with a defense to civil and criminal actions by, and on behalf of, the city for his alleged looting of the city’s coffers and misappropriation of public funds.
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Overview
The court held that the employment agreement between the city and the employee did not require the city to provide him with a defense to the underlying actions, because the clause in the agreement on which the employee relied was simply a third-party indemnification agreement, which did not apply to civil actions, by or on behalf of, the city itself. Because the indemnity agreement did not apply to such actions, the duty to defend likewise did not apply to them either. The court observed that indemnity agreements were generally not exculpatory and that language contemplating exculpation had to be clear and explicit. Moreover, even if the city had contracted to provide the employee a defense to criminal prosecutions, such an agreement would be unenforceable, as the city had no statutory power to make such an agreement. Gov. Code, § 996.6, did not permit a public entity to provide greater defense rights to a public employee facing criminal prosecution. The court concluded that public policy necessarily rejected the concept that a public entity allegedly victimized by a corrupt employee had to provide that employee with a defense to those charges.
Outcome
The court granted the city’s petition for a writ of mandate and remanded the matter to the trial court with directions that it conduct no trial, bench or jury, on the employee’s partial cause of action for a defense under his employment contract.