2007-088$:\Our DocumenLS\Ordinances\07\,4rticle VIII-0enton Code of OrdinancesFinal.doe
ORDINANCE NO. 2 ~ Q
AN ORDINANCE AMENDING SECTIONS 2-243 THROUGH 2-250 OF ARTICLE VIII OF
CHAPTER 2 OF THE CODE OF ORDINANCES OF THE CITY OF DENTON, TEXAS,
PROVIDING FOR LEGAL DEFENSE AND INDEMNIFICATION OF CITY OFFICERS AND
EMPLOYEES; PROVIDING FORA SEVERABILITY CLAUSE, PROVIDING FOR A
SAVINGS CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. Chapter 2 of the Code of Ordinances of the City of Denton, Texas, be
amended by revising Article VIII so that hereafter Sections 2-243 through 2-250 shall read as
follows:
ARTICLE VIII. LEGAL DEFENSE AND INDEMNIFICATION OF CITY OFFICERS
AND EMPLOYEES
Sec. 2-243. Definitions
A. For purposes of this article, the term "employee" shall include all city council
members, members of all city boards and committees, and all officers and employees of the city
and any other persons, including volunteers, former officers, volunteers or employees and the
estate of any such officer, volunteer or employee encompassed within the definition of
"employee" in Chapter 102 of the Texas Civil Practice and Remedies Code, hereinafter referred
to as the "Code."
B. For purposes of this Article, the term "actual damages" shall be limited to an amount
not to exceed $5,000,000.
Sec. 2-244. Indemnification and Limitations
A. The City of Denton shall, as hereinafter provided, indemnify and pay actual damages,
court costs, and reasonable attorney's fees for which the city or employee shall be determined to
be liable by a court of competent jurisdiction, excluding punitive damages, awarded against any
employee of the city but only if the damages are based on an act or omission by the employee in
the course and scope of employment. The phrase "course and scope of employment" shall not
include any action which occurs during a period of time when the employee is engaged in
outside employment or is rendering contractual services to someone other than the city, unless
otherwise expressly set forth in such contract, or engaged in activities unrelated to his or her
municipal employment or services. Whether the actions for which damages are awarded were
performed during the employee's course and scope of employment shall be determined by the
city, and this determination shall be final; provided however, if the indemnity and payment of
damages and legal representation has been denied by the city, if a final judgment of a court of
competent jurisdiction determines that the employee was acting in the scope and course of his or
her employment and the employee was not engaged in official misconduct, a willful or wrongful
S:\Our Doeumen[s\Ordinances\07\ArticleVlII-Denton Code of OrdinancesFinal.doe
act or omission, or an act or omission constituting gross negligence, the city shall pay any actual
damages, court costs and reasonable attorney's fees as set forth in this article.
B. The city shall pay the actual damages arising from any claim, lawsuit or judgment
against an employee, whether or not the city is a party defendant, if said damages:
(1) Arise from a cause of action for negligence;
(2) Arise out of a cause of action for deprivation of a right, privilege or immunity
secured by the constitution or laws of this state or the United States; or
(3) Arise out of any incident for which indemnification is in the interest of the city as,
determined by the city council, and maybe legally paid by the city.
C. In addition to the coverage provided hereinabove, the city will pay all reasonable costs
and expenses, including but not limited to attorney's fees and court costs, incurred in
investigating and defending the claim or lawsuit
D. Payments under this article shall be subject to all limitations imposed by the Texas
constitution and laws as well as ordinances and policies adopted by the city council and shall in
no case exceed the amount allowable thereunder.
Sec. 2-245. Exclusions
This article shall not apply and the city shall not pay damages awarded against an
employee that arise from:
(1) Acts or omissions constituting gross negligence, criminal negligence, conscious
indifference or reckless disregard;
(2) Acts conducted in bad faith;
(3) Claims or lawsuits brought by the city against an employee including, without
limitation, suits to collect delinquent taxes, assessments, and fines;
(4) Claims or lawsuits for official misconduct;
(5) Damages arising out of a willfully wrongful act or omission, including but not
limited to a violation of a penal statute or ordinance, committed by or with the
knowledge or consent of the employee including damages arising out of a cause of
action for official misconduct;
(6) Damages arising out of acts committed by or at the direction of the employee with
affirmative dishonesty, or actual intcirt to injure, deceive or defraud;
(7) Any act or omission committed by an employee while the employee is operating a
city vehicle without permission or authority;
Page 2 of 5
S:\Our Documents\Ordinances\07Wr[icle VIII-DCnlon Code of OrdinanecsFinal.dnc
(8) Any act or omission committed while the employee is operating a city vehicle in
the course of personal or private business provided, however, that this exclusion shall
not apply to the limited extent that such use is explicitly allowed by, pursuant to, and in
accordance with, applicable Texas law, city ordinance and the written policies set forth
in the city's policy manual:
(9) Liability assumed by the employee under a contract or agreement, unless the
contract or agreement has been entered into with the consent or at the request of the
city;
(10) Any obligation for which the city may be liable under the Texas Worker's
Compensation Act, Unemployment Compensation laws or any similar law;
(1 l) Any act or omission which occurs during a period of time in which the employee
is engaged in outside employment or is rendering contractual services to someone other
than the city, unless otherwise expressly set forth in such contract;
(12) Any employee who is already covered by an insurance contract or other plan of
self-insurance authorized by statute, but not provided by the city, for acts or omissions
occurring while in the scope and course of his employment or duties, up to the limits of
said insurance contract or plan; or
(13) Damages covered under an insurance contract of the city authorized by statute.
Nothing in this subsection shall obligate or prohibit the city, at its discretion, on a case by
case basis from providing legal representation and paying actual damages, court costs and
attorney's fees required to be paid by an employee in any claim or lawsuit, to the extent
permitted bylaw.
Section 2-246. Subrogation
The city shall be subrogated to the employee's rights of recovery against any person,
firm, corporation or organization, and the employee shall execute and deliver to the city attorney
whatever documents are necessary to secure those rights and shall do nothing to prejudice those
rights.
Sec. 2-247. Legal defense.
The city shall provide legal counsel to represent any employee, for whom the city may
pay damages under this article, including any appeal resulting from the litigation under which
damages were or may be assessed. The legal counsel provided by the city may be the city
attorney, or any member of the city attorney's staff, or the city's regularly employed counsel,
unless there is a potential conflict of interest between the city and the defendant, in which case,
the city shall employ other legal counsel to defend the suit. Such legal representation shall be
provided at no cost to the employee. Any employee may have his own counsel assist in the
defense at the sole expense of the employee. The employee shall cooperate fully with the city,
Page 3 of 5
S:AOur DocumentsVOrdinaneesVOTArticle V I I I-0enron Code of OrdinuncesFinal.doc
the city attorney, or the city appointed legal counsel in the preparation and presentation of the
case. The failure of the employee to so cooperate shall constitute a waiver of the employee's right
to representation and indemnity under this article. Any legal counsel provided under this section
may settle the portion of the suit that may result in the payment of damages by the city under this
article with approval of the city council. The city shall not be liable for any settlement of any
such claim or suit affected without the consent of the city council.
Sec. 2-248. Preservation of defenses.
Nothing contained in this article shall waive any defenses which are available to the city
or the officer or employee under the Tort Claims Act or any other applicable laws, including,
without limitation, the defense of governmental or sovereign immunity, the limitations on
governmental officers' and employees' liability or the limitations on the amount of recoverable
damages as set forth in the Tort Claims Act and Chapters 102 through 104 of the Code, as those
laws may now read or may be amended in the future. This article does not impose liability or
waive immunity for an employee who has common law, statutory, or other immunity. Nothing
contained in this article shall create any rights on behalf of third parties who are not officers or
employees of the City of Denton.
Sec. 2-249. Notice.
The provisions of this article shall apply only if the city has been given notice of the
action brought against the city employee in writing, which has been received by the city manager
within thirty (30) calendar days of the service of process on the employee.
Sec. 2-250. Disciplinary action.
Nothing in this article shall. prevent the city from taking any disciplinary action against
any employee for conduct defended or indemriified by the city under this article, either before or
after the conclusion of the litigation.
SECTION 2. If any section, subsection, paragraph, sentence, clause, phrase or word in
this ordinance, or application thereof to any person or circumstance, is held invalid by any court
of competent jurisdiction, such holding shall not affect the validity of the remaining portions of
this ordinance, and the City Council of the City of Denton, Texas, hereby declares it would have
enacted such remaining portions despite any such invalidity.
SECTION 3. All provisions of the Code of Ordinances of the City of Denton, Texas, in
conflict with the provisions of this Ordinance are hereby repealed, and all other provisions of the
Ordinances of the City of Denton, Texas, not in conflict with the provisions of this Ordinance,
shall remain in full force and effect.
SECTION 4. This Ordinance shall become effective immediately upon its passage and
approval.
Page 4 of 5
r
S:\Our Documents\Ordinances\07Wrticlc VIII-0enton Code of OrdinancesPinaLdoc
PASSED AND APPROVED this the
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY: I Qi~-- /
APPROVED AS TO LEGAL FORM:
EDWIN M. SNYDER, CITY ATTORNEY
BY: _. ~ ~ s
_~ C,
PERR' . McNEILL, MAYOR
day of , 2007.
Page 5 of 5