Opinion ID: 783516
Heading Depth: 2
Heading Rank: 1

Heading: District Court's Ruling Requiring City to Indemnify Pedersen

Text: 25 We begin with the question of who must bear responsibility for the damages awarded to Rebecca DiSorbo. As an initial matter, we note that the City is at a minimum jointly and severally liable for compensatory damages pursuant to its liability under Monell. See White-Ruiz v. City of New York, 983 F.Supp. 365, 390-92 (S.D.N.Y.1997) (imposing joint and several liability to defendant police officers and a municipality found liable under Monell ); see also In re Masters Mates & Pilots Pension Plan & IRAP Litig., 957 F.2d 1020, 1027 (2d Cir.1992) (Under the doctrine of joint and several liability, when two or more persons' torts together cause an injury, each tortfeasor is liable to the victim for the total damages.). The City's liability, however, is limited to Rebecca DiSorbo's compensatory damages, as punitive damages may not be awarded against a municipality under Monell. See City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 271, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981); Morris v. Lindau, 196 F.3d 102, 112 (2d Cir.1999). 26 In its order and judgment, the District Court found that the City was obligated to indemnify Pedersen for both punitive and compensatory damages based on representations by defense counsel. This ruling stood in clear contradiction with the New York Supreme Court's decision on the very same indemnification issue. After Corporation Counsel denied Pedersen's petition for indemnification consistent with General Municipal Law § 50-j(6)(a), the Schenectady PBA, on behalf of Pedersen, challenged this administrative determination in state court pursuant to Article 78 of the New York Civil Practice Laws and Rules. In a decision that subsequently was affirmed by the Third Department, Schenectady Police Benevolent Ass'n v. City of Schenectady, 299 A.D.2d 717, 750 N.Y.S.2d 666, 668-69 (3rd Dept. 2002), the New York Supreme Court, Schenectady County, held that Corporation Counsel's denial of indemnification was not arbitrary and capricious. 27 The District Court's reference to representations by defense counsel suggests that the City might have bound itself to indemnify Pedersen at trial independent of the contractual duty previously decided in an administrative proceeding and affirmed by state court in an Article 78 proceeding. Based on our review of the record, however, we do not believe that any such representation was made. One could argue that counsel represented that the City would indemnify Pedersen when, after the second trial, counsel for the City moved for the District Court to bypass the Monell trial because the court had ruled as a matter of law that Pedersen was acting within the scope of his employment and therefore the City was bound to pay any award. However, Monell only reaches compensatory damages so there is no reason to think that counsel was referring to both punitive and compensatory damages. Moreover, it seems likely that counsel for the City was referring to respondeat superior liability rather than indemnification; immediately after the City's statement, counsel for Pedersen sought to bolster the City's argument that a Monell trial could be averted, claiming that Plus, [the City had] agreed to indemnify [Pedersen]. Thus, we do not find support in the record for a finding that counsel for the City created an independent duty to indemnify Pedersen. 28 We thus consider whether the state court decision collaterally estops Pedersen from further arguing that he is entitled to indemnification from the City. Under New York law, collateral estoppel may be invoked to preclude a party from raising an issue (1) identical to an issue already decided (2) in a previous proceeding in which that party had a full and fair opportunity to litigate. Fuchsberg & Fuchsberg v. Galizia, 300 F.3d 105, 109 (2d Cir.2002) (internal citations and quotation marks omitted); see Grieve v. Tamerin, 269 F.3d 149, 153-54 (2d Cir.2001); Schwartz v. Pub. Adm'r, 24 N.Y.2d 65, 73, 298 N.Y.S.2d 955, 246 N.E.2d 725 (N.Y. 1969). In the case before us, by the time the District Court ordered the City to indemnify Pedersen, Corporation Counsel had determined that it was not required to indemnify Pedersen and the state court had upheld this decision as not arbitrary and capricious in an Article 78 proceeding, at which Pedersen had a full and fair opportunity to litigate his indemnification claim. Furthermore, collateral estoppel is not foreclosed because the New York Supreme Court's decision was being appealed when the District Court ordered indemnification. Under New York law, the mere pendency of an appeal does not prevent the use of the challenged judgment as the basis of collaterally estopping a party to that judgment in a second proceeding. Amica Mut. Ins. Co. v. Jones, 85 A.D.2d 727, 445 N.Y.S.2d 820, 822 (2nd Dept. 1981); see Parkhurst v. Berdell, 110 N.Y. 386, 392, 18 N.E. 123 (N.Y.1888); Exch. Nat'l Bank v. Ferridge Props. of New York, Inc., 112 A.D.2d 33, 490 N.Y.S.2d 656, 657 (4th Dept. 1985). We therefore conclude that Pedersen is collateraly estopped from arguing that he is entitled to indemnification, and accordingly vacate the court's ruling that the City must indemnify Pedersen for compensatory and punitive damages. 6 29