City of Bell v. Superior Court
163 Cal. Rptr. 3d 90
Cal. Ct. App.2013Background
- City of Bell seeks mandate to compel trial court to accept jury trial on Rizzo’s defense claim; contract language ties defense to acts within employment scope; indemnity clause appears third-party oriented; Government Code provisions govern public defense rights; City argued contract cannot expand statutory defense rights and could waste public funds; underlying conduct involves alleged embezzlement and misappropriation by Rizzo and others over 17 years.
- Rizzo tendered civil and criminal actions to the City for defense; City refused, asserting grounds under Gov. Code 995.2 and 995.8 and statute 995.2; cross-claims and indemnity interplay developed between City, Rizzo, and Attorney General.
- The trial court initially held that the City must defend Rizzo under the contract from tender, and stayed related actions; later, City sought writ of mandate to overturn the stay and require judgment on the defense issue.
- Court addresses whether defense obligation is broader than indemnity; analyzes contract text, severability, and statutory constraints.
- Court concludes indemnity is third-party only and defense duty is tied to indemnity scope; Government Code 996.6 does not permit broader defense rights; public policy supports denial of defense in light of alleged city losses.
- Disposition: petition granted; remand with directions; City awarded costs in writ proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the employment contract obligate City to defend Rizzo in civil actions? | Rizzo relies on contract to require defense. | City argues contract is third-party indemnity only; no first-party defense. | No; defense duty mirrors indemnity scope; not extended to first-party claims. |
| Does the indemnity clause cover claims between the City and Rizzo or only third-party claims? | Indemnity and defense are linked; could cover City-initiated claims. | Indemnity clause is clearly third-party. | Indemnity is third-party; cannot serve as exculpatory for City or itself. |
| Can Government Code 996.6 broaden defense rights beyond Gov. Code 995.8? | Section 996.6 allows additional defense rights via contract. | No; 996.6 does not override strict 995.8 limits and requires contract-based defense only. | No; 996.6 does not permit broader criminal-defense contracts. |
| Are there public policy reasons to deny defense costs despite contract language? | Defense costs reimbursed as proper indemnity. | Public funds would be wasted defending alleged embezzler; policy against ex post defense. | Yes; policy favors denying defense to one accused of city-funded misappropriation. |
Key Cases Cited
- People ex rel. Harris v. Rizzo, 214 Cal.App.4th 921 (2d Dist. 2013) (discusses misappropriation and related civil actions against city officials)
- Los Angeles Police Protective League v. City of Los Angeles, 27 Cal.App.4th 168 (4th Dist. 1994) (limits on public entity defense obligations in certain contexts)
- Crawford v. Weather Shield Mfg., Inc., 44 Cal.4th 541 (2008) (standard for interpreting noninsurance indemnity agreements; implied duty to defend)
- Queen Villas Homeowners Assn. v. TCB Property Management, 149 Cal.App.4th 1 (4th Dist. 2007) (indemnity clauses not exculpatory absent clear language)
- Tenwolde v. County of San Diego, 14 Cal.App.4th 1083 (4th Dist. 1993) (public policy on defense costs in public-indemnity context)
- Pacific Gas & Electric Co. v. G. W. Thomas Drayage & Rigging Co., 69 Cal.2d 33 (1968) (contract interpretation and indemnity principles)