The full extent of the issue was covered at length in a Scene investigation earlier this year
(that is well worth your time) but here are the nuts and bolts:
Facing $18.7 million in civil judgments in two cases against the Cleveland police — Randy Ayers, for a wrongful conviction which he spent more than 11 years in prison for; and Kenny Smith, who was shot and killed by a Cleveland police officer in 2012 — the city of Cleveland attempted a novel legal maneuver.
Cleveland indemnifies its officers as long as their actions are taken in good faith and in the process of their duties. That means that any financial repercussions from those actions are covered by the city of Cleveland. At least, that had been the case.
Staring down the nearly $20 million sum as a result of these two cases, the city hired attorneys to work with the officers to declare bankruptcy while listing the judgments as outstanding debts. Again, usually, those would have been covered by the city through indemnification, and it would have been indicated in the bankruptcy filings that the sum was indemnified. Their argument: the officers are responsible, and since they didn't indicate they were eligible for indemnification for that sum, and since they have no assets, the judgments sitting against them disappear with the bankruptcy, leaving Ayers and Kenny Smith's families no way to collect.
The Ayers' portion of the story came to a good conclusion yesterday. The legal battle wormed its way to the common pleas. Judge McCllelland, who admitted in the decision that this amounted to a "first look" judicially at the legality of a such a maneuver, ruled in no certain terms that Cleveland is responsible for the $13.2 million judgment.
That was for a couple of reasons — you can read the full judgment here
— but he answered Cleveland's contention with this: "The Court agrees with the Memphis Court that it makes no sense to require the employee to first pay judgment and then seek reimbursement. As practical matter, that is not how indemnification agreements work. Also, if one were to adopt that reasoning, plaintiffs would seldom be made whole. The employees, named as defendants, would not be expected to have the resources to satisfy large judgments, such as the one here."
Judge McClleland also added statutory interest, bringing the total to $14.6 million.
Cuyahoga County Common Pleas Judge Robert McClleland ruled yesterday in a case that should have far-reaching impact on how Cleveland handles payment/obligations for civil judgments in cases where they've indemnified their police officers/employees.