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State ex rel. Hawley v. City of St. Louis

Court of Appeals of Missouri, Eastern District, Fourth Division

August 8, 2017

STATE ex rel. ATTORNEY GENERAL JOSH HAWLEY, Appellant,
v.
CITY OF ST. LOUIS, Respondent.

         Appeal from the Circuit Court of the City of St. Louis 1422-CC10270 Honorable Julian L. Bush

          OPINION

          James M. Dowd, Chief Judge.

         I. Introduction

         This appeal between the State of Missouri and the City of St. Louis presents us with two questions: (1) whether under § 105.726.4[1] the City owes the State $439, 975 to compensate the Attorney General's Office ("AGO") for the legal representation it provided to the St. Louis Board of Police Commissioners ("Board") and associated individuals[2] in certain civil liability claims brought against the Board, and (2) whether the State is required by law to reimburse the City in the amount of $1, 608, 269.90 for settlements and judgments paid by the City and the Board between November 7, 2012 and September 1, 2013 for liability claims filed against the Board.

         The trial court in a bench trial entered a declaratory judgment in favor of the City on both issues. On the first question, the court declared that the City has no duty to compensate the State for the legal work in question. And as to the second question, the court declared that the City is entitled to be reimbursed by the State in the amount of $1, 608, 269.90 for settlements and judgments that were paid by the City on behalf of the Board or by the Board itself from November 7, 2012 to September 1, 2013.

         The first question occupies the State's first three points on appeal. As to this question, we agree with the State and reverse the judgment of the trial court because pursuant to § 105.726.4, the City is required to fairly compensate the AGO for the legal fees and expenses incurred by the AGO for its representation of the Board in claims for which such representation was requested and statutorily mandated. As to the second question, we affirm the trial court's judgment finding no error in the trial court's declaration that, pursuant to § 105.726.3, the State is required to reimburse the City for the various settlements and judgments the City or the Board paid between November 7, 2012 and September 1, 2013.

         II. A review of the key legislative enactments relating to the control over the St. Louis Metropolitan Police Department ("SLMPD"), and the responsibility to provide and pay for the legal representation of the Board and to pay any settlements or judgments incurred by the Board.

         1. From 1861 until September 1. 2013. the SLMPD was under state control.

         The Board was established as a state agency by the Missouri General Assembly in 1861. State ex rel Sayad v. Zych, 642 S.W.2d 907, 908-09 (Mo.banc 1982) (citing Act of March 27, 1861, 1861 Mo. Laws 446). Each of the five members of the Board, except for the Mayor of St. Louis, was appointed by the Governor. Id. at 909. The Board was empowered to establish, control, and administer the City police force, and was authorized to compel the City to fund the force. Id. Contemporaneous legislation prohibited the City from interfering with the Board or the exercise of its powers. Id. And although the Board's enabling legislation underwent changes over the following century-and-a-half, throughout that period the Board retained its authority, most recently derived from §§ 84.010 to 84.340, RSMo 2000, to direct and control the affairs of the City's police force.

         2. With the passage in 2012 of Initiative Proposition A, Missouri voters sanctioned the shift from state control to local control of the SLMPD.

         On November 6, 2012, Missouri voters passed Initiative Proposition A, which led directly to the enactment of § 84.344. That statute gave the City the right to establish its own police force free from state control after July 1, 2013. The statute also directed that once the City established its police force, the state-controlled Board was required to transfer to the City title and ownership of all its indebtedness and assets.

         3. City Ordinance 69489 established the SLMPD as the City's own police force.

         On July 2, 2013, pursuant to the authorization granted it by § 84.344, the City passed Ordinance 69489, which provided for the establishment on September 1, 2013 of the City's own police force. And on September 1, 2013, the City assumed control over the force, which included its acceptance of the responsibility, ownership, and liability as the successor-in-interest of the Board's contractual obligations, indebtedness, and other lawful obligations.

         4. Proposition A also amended § 105.726, a statute originally adopted in 1983 as part of the establishment of the State Legal Expense Fund ("SLEF") for the payment of claims and judgments against state agencies, officers, and employees.

         In 1983, nearly thirty years prior to the passage of Proposition A, the Missouri General Assembly created the SLEF. § 105.711-726, RSMo 1986. Section 105.711 set the terms of SLEF coverage, establishing a fund to pay claims and judgments rendered against state agencies, officers, and employees for conduct arising out of and performed in connection with official state duties. Individuals and entities that were covered by the SLEF included elected officials, appointees, members of state boards or commissions, members of the Missouri National Guard, physicians associated with the State, and others. Section 105.716 required that these defendants be represented by the AGO.

         Section 105.726 in its original version provided that no part of the SLEF-enacting legislation could be construed to broaden the liability of the State beyond the exceptions to its sovereign immunity that were already carved out in §§ 537.600 to 537.610, or to abolish or waive any defense.

5. The Missouri Supreme Court's holding in Smith v. State, 152 S.W.3d 275 (Mo.banc 2005) led to the 2005 amendment of § 105.726, which expanded SLEF coverage to the Board as a state agency and to City police officers as officers of the state.

         From 1983 when the SLEF was created until 2005, the City had continued to provide and pay for legal representation for the Board and to pay any settlements or judgments it incurred. In 1999, members of the Board and several police officers filed a declaratory judgment action asserting that the Board was a state agency, that they were state officers, and that therefore they were entitled to coverage under the SLEF. See Smith v. State, 152 S.W.3d 275 (Mo.banc 2005). In 2005, the Missouri Supreme Court held in Smith that the members of the Board and police officers were entitled to SELF coverage because the Board was an "agency of and the plaintiffs were "officers of the state, and because the claims for reimbursement through the SLEF were not barred by principles of sovereign immunity. 152 S.W.3d at 275-79, 280.

         As a result, in 2005, the General Assembly amended § 105.726 to provide that the Board was thereafter entitled to reimbursement through the SLEF, but only up to $1 million per fiscal year. § 105.726.3, RSMo Cum. Supp. 2006. The amendment also provided that the AGO was required to represent the Board upon request in any liability claim filed against the Board for which SLEF coverage was available, and that the AGO was entitled to fair compensation for the cost of the representation. § 105.726.4, RSMo Cum. Supp. 2006.

         6. Proposition A amended $ 105.726.3 to carve out the Board from SLEF coverage.

         The November 6, 2012 passage of Proposition A resulted in the amendment of § 105.726.3 pursuant to which the Board was no longer entitled to reimbursement through the SLEF for covered claims. The amended statute provided as relevant here that only the Board's successor-in-interest-the City-was entitled to reimbursement through the SLEF. The statute has not been amended since the passage of Proposition A.

         7. Proposition A also ...


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