Meeting Date: Charter Provision: the Objective:
August 28, 2017 Provide for the orderly government and administration of affairs of the City Determine Policies
Defense and Indemnification of City Treasurer in Stuart et al. v City of Scottsdale et al., Federal District of Arizona Cause No. CV17-01848-DJH. Adopt Resolution No. 10891 authorizing the City to defend and indemnify City Treasurer Jeff Nichols in the lawsuit Stuart, et. al.. v. City of Scottsdale et. al.. CV17-01848-DJH, pending in the United States District Court, District of Arizona.
BACKGROUND Plaintiff Mark Stuart has had various interactions with City employees and the Scottsdale City Council. Mr. Stuart has made various allegations arising from these interactions which are detailed in documents previously filed with the City Clerk. Mr. Stuart along with his daughter and an organization identified as Save Our Preserve, Inc. have now filed an amended lawsuit in the United States District Court, District of Arizona, requesting, among other things, injunctive relief and damages. A copy of the Amended Complaint is on file with the City Clerk’s office and available upon request. The original Complaint named as Defendants the City of Scottsdale and, in their official and/or individual capacities , Mayor W.J. "jim" Lane, Council Members Guy Phillips, Kathy Littlefield, Suzanne Klapp, Linda Milhaven, Virginia Korte, and David Smith, City Manager Jim Thompson, City Clerk Carolyn Jagger, and City Attorney Bruce Washburn. On June 27, 2017, this Council voted to defend and indemnify the Mayor, City Council, and the charter officers named in the original Complaint. The new Amended Complaint also added City Treasurer Jeff Nichols as a Defendant. Scottsdale Revised Code § 2-179(a) provides: The city may upon request defend and indemnify present or former mayors, members of the city council and charter officers (city manager, city clerk, city treasurer, city judge, city auditor and city attorney), with respect to any civil
15789483v1 Action Taken
City Council Report | Indemnification of City Treasurer in Stuart, et. al. v City of Scottsdale, et. al. claim asserted by any person or entity, which has or is alleged to have arisen from an act or omission of the mayor, council member or charter officer; if the act or omission was done in good faith, and occurred or is alleged to have occurred in the scope of his or her official duties, or employment. The Complaint filed by Mr. Stuart against the Mayor, Council Members and City Charter Officers is based upon actions taken in the scope of their official duties.
ANALYSIS & ASSESSMENT Recent Staff Action: The City is being represented in these proceedings by the City Attorney’s Office and Outside Counsel. Policy Implications: The policy permitting the defense and indemnification of City council members and officials is established by ordinance. Signiilcant Issues to be Addressed: The issue to be addressed is whether to provide the City Treasurer Jeff Nichols with defense and indemnification in this matter. If he is indemnified then the City Attorney's Office will arrange for representation through outside counsel with assistance from the City Attorney's Office. If he is not indemnified then he will have to retain his own counsel to defend himself. Community Involvement: The matter is in litigation and does not involve community outreach.
RESOURCE IMPACTS Available funding: Representation will be provided by outside counsel as well as staff in the City Attorney's Office. Funds are available in the Risk Management budget. Staffing, Workload Impact: The matter will be handled by outside counsel with assistance from the City Attorney’s Office. The City Attorney's Office has sufficient staff available to provide the necessary assistance to outside counsel for the defense. Future Budget Implications Uncertain Cost Recovery Options: None
OPTIONS & STAFF RECOMMENDATION Description of Option A Approve Resolution No. 10891. Description of Option B Not approve Resolution No. 10891.
City Council Report | Indemniflcation of City Treasurer in Stuart, et. al. v City of Scottsdale, et. al. Proposed Next Steps If the Resolution is approved, the City Attorney’s Office will request that outside counsel appear and defend on behalf of City Treasurer Jeff Nichols so approved for indemnification.
RESPONSIBLE DEPARTMENT(S) Office of the City Attorney
STAFF CONTACTS (S) Bruce Washburn, City Attorney, bwashburn(5)scottsdaleaz.gov Eric C. Anderson,^Asst. City Attorney, ecanderson(5)scottsdaleaz.gov
APPROYl Bruce Washburn, City Attorney Eric C. Anderson, Sr. Asst. City Attorney
Resolution No. 10891
RESOLUTION NO. 10891 A RESOLUTION OF THE COUNCIL OF THE CITY OF SCOTTSDALE, MARICOPA COUNTY, ARIZONA, AUTHORIZING THE CITY TO PAY FOR THE DEFENSE AND INDEMNIFICATION OF CITY TREASURER JEFF NICHOLS IN THE LAWSUIT TITLED MARK STUART, ET AL v CITY OF SCOTTSDALE, ET AL, UNITED STATES DISTRICT COURT, DISTRICT OF ARIZONA, COURT CASE NO. CV-17-01848-DJH. WHEREAS, Scottsdale Revised Code 2-179 requires that, in order for the City to defend and indemnify City Charter Officers when a claim or lawsuit is brought, the Council must approve the request; and WHEREAS, City Treasurer Jeff Nichols has been named as a defendant in his official capacity and/or individual capacity, in the lawsuit titled Mark Stuart, et at. v. City of Scottsdale, et a/.. United States District Court, District of Arizona, Court Case No. CV-17-01848-DJH. NOW, THEREFORE, BE IT RESOLVED by Council of the City of Scottsdale, Arizona: Section 1. The Council hereby authorizes the City to pay for the defense and indemnification of City Treasurer Jeff Nichols in the lawsuit titled Mark Stuart, et at. v. City of Scottsdale, et a!., United States District Court, District of Arizona, Court Case No. CV-17-01848DJH. Section 2. It is further resolved that this defense and indemnification may be extended by the City to any spouse of the City Treasurer who is named as a defendant in the lawsuit by virtue of his or her status as a spouse of the City Treasurer. PASSED AND ADOPTED by the City Council of the City of Scottsdale this 28*^ day of August, 2017. CITY OF SCOTTSDALE, an Arizona municipal corporation.
W. J. “Jim” Lane, Mayor ATTEST:
Carolyn Jagger, City Clerk APPROVED^ TO FORM: OFFICE ©"pi-HE CITY ATTORNEY
^ued Washburn, City Attorney By: Eric C. Anderson, Senior Assistant City Attorney