AYERS, APPELLANT, v. THE CITY OF CLEVELAND ET AL., APPELLEES.
No. 2018-0852
Supreme Court of Ohio
March 25, 2020
2020-Ohio-1047
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Ayers v. Cleveland, Slip Opinion No. 2020-Ohio-1047.]
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2020-OHIO-1047
AYERS, APPELLANT, v. THE CITY OF CLEVELAND ET AL., APPELLEES.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Ayers v. Cleveland, Slip Opinion No. 2020-Ohio-1047.]
Political-subdivision liability—Former
(No. 2018-0852—Submitted June 12, 2019—Decided March 25, 2020.)
APPEAL from the Court of Appeals for Cuyahoga County, No. 105074, 2017-Ohio-8571.
{¶ 1} In this case, we consider whether a judgment creditor may proceed directly against a political subdivision under
I. Factual and Procedural Background
{¶ 2} After more than a decade of imprisonment, appellant, David Ayers, prevailed on federal habeas corpus claims and was released from prison in 2011. He then filed a complaint in federal district court asserting civil-rights violations against appellee the city of Cleveland; two of its police detectives, Michael Cipo and Denise Kovach; and others. The court granted summary judgment in favor of Cleveland and dismissed all claims Ayers raised against the city.
{¶ 3} After a trial that involved only claims against Cipo and Kovach, the jury returned a verdict in Ayers‘s favor finding that Cipo and Kovach had violated Ayers‘s federal constitutional rights. The district court entered a judgment against the detectives in the amount of $13,210,000 and later increased the amount by awarding costs and attorney fees. The detectives twice offered to assign to Ayers any
{¶ 4} Cleveland did not actively seek to indemnify the detectives, and the detectives did not seek to enforce any rights to indemnification by the city. Cipo passed away before paying any amount to Ayers, and Ayers made no claim against Cipo‘s estate. Kovach, represented by David M. Leneghan, a lawyer retained for Kovach by Cleveland, filed a petition for Chapter 7 bankruptcy, and the bankruptcy court discharged Kovach‘s personal liability on the judgment.
{¶ 5} After the bankruptcy proceedings were completed, Ayers filed a motion with the federal district court to reinstate his indemnification claim against Cleveland. The district court initially granted Ayers‘s motion to reinstate the claim, but it later vacated its order and dismissed the claim for lack of subject-matter jurisdiction after deciding that the state courts were best positioned to determine whether indemnification is available.
{¶ 6} Ayers then filed the underlying action in Cuyahoga County Common Pleas Court against Cleveland, Leneghan, and appellee Joseph Scott, an attorney who represented both Cleveland and the officers in the prior proceedings. Against Cleveland, Ayers asserted claims of statutory indemnification pursuant to
{¶ 7} After discovery, the parties filed limited motions for summary judgment on the threshold issue whether Ayers is entitled to seek indemnification from Cleveland pursuant to
{¶ 8} The Eighth District Court of Appeals reversed in a two-to-one decision. 2017-Ohio-8571, 99 N.E.3d 1269, ¶ 50. The majority concluded that Ayers, as a judgment creditor, does not have standing to bring a private cause of action against the city to enforce the city‘s obligations to its employees. Id. at ¶ 28. It concluded that Ayers‘s claims “are not within the zone of interest intended to be protected or regulated by
{¶ 9} Judge Kilbane dissented. She wrote that the plain intent of
{¶ 10} This court accepted jurisdiction over Ayers‘s first proposition of law only: “[R.C.] 2744.07(A)(2) reflects the legislature‘s intent to permit a judgment creditor to proceed directly against an indemnitor.” See 153 Ohio St.3d 1467, 2018-Ohio-3450, 106 N.E.3d 65.
II. Analysis
{¶ 11} As set forth in
Except as provided in division (B) of this section, a political subdivision is not liable in damages in a civil action for injury, death, or loss to person or property allegedly caused by any act or omission of the political subdivision or an employee of the political subdivision in connection with a governmental or proprietary function.
{¶ 12} Although political subdivisions are not liable for the actions of employees like those in this case, pursuant to
Except as otherwise provided in this division, a political subdivision shall indemnify and hold harmless an employee in the amount of any judgment, other than a judgment for punitive or exemplary damages, that is obtained against the employee in a state or federal court or as a result of a law of a foreign jurisdiction and that is for damages for injury, death, or loss to person or property caused by an act or omission in connection with a governmental or proprietary function, if at the time of the act or omission the employee was acting in good faith and within the scope of employment or official responsibilities.
(Emphasis added.) Am.Sub.S.B. No. 106, 149 Ohio Laws, Part II, 3500, 3515-3516. This provision in
{¶ 13} In this case, Kovach never asserted her right to indemnification. Instead, it is Ayers who seeks to assert the officer‘s right to indemnification. The issue in this case is thus whether a judgment creditor may enforce the indemnification provision of
A. The parties’ arguments
{¶ 14} Ayers argues that the text of
{¶ 15} Cleveland counters that the text of
B. R.C. 2744.07(A)(2) does not permit a judgment creditor to proceed directly on an indemnification claim against a political subdivision
{¶ 16} At the outset of our analysis, we emphasize the limited nature of the precise issue before the court. The parties have raised numerous arguments that are based on the facts of this case, including regarding whether Kovach‘s bankruptcy proceedings were related to Cleveland‘s
{¶ 17} The primary goal of statutory construction is to give effect to the legislature‘s intent, and in determining the legislature‘s intent, we first look to the plain language of the statute. State v. Gordon, 153 Ohio St.3d 601, 2018-Ohio-1975, 109 N.E.3d 1201, ¶ 8. “When a statute is plain and unambiguous, we apply the statute as written.” Id., citing Portage Cty. Bd. of Commrs. v. Akron, 109 Ohio St.3d 106, 2006-Ohio-954, 846 N.E.2d 478, ¶ 52, citing State ex rel. Savarese v. Buckeye Local School Dist. Bd. of Edn., 74 Ohio St.3d 543, 545, 660 N.E.2d 463 (1996).
{¶ 18} In reviewing the plain language of
{¶ 19} The definition of “employee” is contained in
{¶ 20} Ayers clearly does not qualify as an employee under the statute. The issue, then, is whether Ayers, as a third-party judgment creditor, may assert an employee‘s indemnification rights when proceeding directly against a political subdivision under
{¶ 21}
{¶ 22} Our conclusion is further supported by a prior decision of this court in which we explained that indemnification is a personal right rather than a right that may be enforced by a third party. See Worth v. Aetna Cas. & Sur. Co., 32 Ohio St.3d 238, 240, 513 N.E.2d 253 (1987). In Worth, this court explained:
Indemnity arises from contract, either express or implied, and is the right of a person, who has been compelled to pay what another
should have paid, to require complete reimbursement.
Travelers Indemnity Co. v. Trowbridge (1975), 41 Ohio St.2d 11, 70 O.O.2d 6, 321 N.E.2d 787, paragraph two of the syllabus. In general, to indemnify is to make whole and has been defined to mean to save harmless by giving security for the reimbursement of a person in case of anticipated loss, as by execution and delivery of a bond. See, generally, 41 American Jurisprudence 2d (1968) 687, Indemnity, Section 1.
(Emphasis added.) Id.
{¶ 23} Ayers argues that Worth is inapposite and that this court should not apply the definition of “indemnify” from that decision because that definition is limited to the context of contract law. This argument is unavailing. While the Worth decision does note that the concept of indemnification arises from contract law, the court set forth in that decision a general definition of “indemnity” that is applicable in this case. As this court explained in Worth, indemnification exists to “make whole” the person who is indemnified. Id. In other words, indemnification does not exist to benefit a third party.
{¶ 24} Finally, we note that limiting the right of indemnification under
{¶ 25} We accordingly hold that under
C. The issue of third-party standing is not properly before the court in this appeal
{¶ 26} Ayers further argues that even if
{¶ 27} This third-party-standing argument is not properly before the court in this appeal. The argument goes beyond the interpretation of
III. Conclusion
{¶ 28} Because we conclude that the right to indemnification set forth in
Judgment affirmed.
STEWART, J., dissents, with an opinion.
STEWART, J., dissenting.
{¶ 29} I would reverse the judgment of the court of appeals and hold that
{¶ 30}
{¶ 31} We determine legislative intent by considering the language of the statute and the purpose to be accomplished. Sutton v. Tomco Machining, Inc., 129 Ohio St.3d 153, 2011-Ohio-2723, 950 N.E.2d 938, ¶ 12.
{¶ 32}
{¶ 33} In the absence of a statutory procedure, and as the majority suggests by reference, majority opinion at ¶ 22, a political subdivision could fulfill its indemnification obligation by reimbursing an employee who pays a judgment. However, requiring the employee to first pay the judgment and then seek reimbursement does not indemnify or hold the employee harmless. In reality, a great deal of harm could befall an employee who would be required to first pay a judgment from his or her personal resources before eventually recovering the amount from the political subdivision. See, e.g., Dixon v. Holden, 923 S.W.2d 370, 378 (Mo.App.1996) (reasoning that by enacting a statute creating a fund to defend and pay judgments against state employees, the legislature intended to protect them as much as possible from the rigors of litigation and that requiring an employee to pay from his or her pocket prior to being made whole would defeat that purpose). Moreover,
{¶ 34} Under the majority‘s decision, the only other option would be for an employee to invoke his or her clear right to have the political subdivision pay the judgment. Either one of these options could have taken place here but did not, thus vesting the employees against whom the judgment was rendered with the ultimate authority over whether the judgment was paid. This cannot be what the legislature intended. Additionally, as the majority notes, “The detectives twice offered to assign to Ayers any indemnification claims that they might have against the city in exchange for an agreement by Ayers to forgo collection efforts against the detectives personally. Ayers rejected each offer.” Majority opinion at ¶ 3. Noting these facts begs a key question: Why did the detectives not simply invoke their right to have the city pay the judgment? If they had done so, as the majority holds only they could do, the city would have had to pay the judgment and there would be nothing left for Ayers to collect from the detectives. Thus, the offer to assign any claims the employees “might have [had] against the city” in exchange for a forbearance of collection efforts is suspect.
{¶ 35} The majority‘s interpretation of the statute—that only the employee can seek indemnification—disregards the statutory language that requires the political subdivision to pay the judgment against the employee. The statute cannot be applied in a way that subjects employees to financial ruin or that allows employees to control whether a legally qualifying judgment is paid. The language of
Law Office of Michele L. Berry and Michele Berry; and Loevy & Loevy, Scott Rauscher, Anand Swaminathan, Debra Loevy, Matthew Topic, and Daniel Twetten, for appellant.
Littler Mendelson, P.C., Robert M. Wolff, and Inna Shelley; and Barbara A. Langhenry, Cleveland Director of Law, and Mark V. Webber, Assistant Director of Law, for appellee city of Cleveland.
Littler Mendelson, P.C., Robert M. Wolff, and Inna Shelley, for appellee Joseph Scott.
Latham & Watkins, L.L.P., Samuel B. Isaacson, and Alex Grabowski; and Porter, Wright, Morris & Arthur, L.L.P., and Kathleen M. Brinkman, urging reversal for amici curiae Ohio law professors Avidan Cover, Llewellyn Gibbons, Doron Kalir, Andrew Pollis, Cassandra Burke Robertson, John Sahl, and Rachel Smith.
Ron O‘Brien, Franklin County Prosecuting Attorney, and Arthur J. Marziale Jr., Nick A. Soulas Jr., and Amy L. Hiers, Assistant Prosecuting Attorneys, urging affirmance for amicus curiae Ohio Prosecuting Attorneys Association.
Mazanec, Raskin & Ryder Co., L.P.A., and Frank H. Scialdone, urging affirmance for amicus curiae Ohio Association of Civil Trial Attorneys.