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How Cleveland's Trying to Get Out of Paying $18.7 Million in Judgments Against Two Cleveland Police Officers 

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Shauna Smith sat in the courtroom each day, nausea knotting her stomach, as lawyers tussled over the details of how a Cleveland police officer killed her son.

The trial stretched over a week last September on the 19th floor of the Federal Building downtown. Witnesses climbed into the stand before Judge Solomon Oliver and the eleven jurors, each speaker reeling off first-hand accounts or expert testimony.

Smith, a baby-faced South Euclid woman topped with a swirl of reddish hair, absorbed everything — blood-flecked crime scene photos; grisly autopsy reports; the words of the very officer who pulled the trigger. The sum total of the trial essentially ripped off the emotional bandages she'd worn for the past two years after the death of her son.

"It was like reliving everything," Smith recalls today. "It was an awful experience." In March 2012, Smith's son Kenny, a promising rapper then riding an express elevator to the top of the local hip-hop talent heap, was in a downtown bar when a fight spilled out into the parking lot. Gunshots ripped the night. The 20-year-old jumped into the car of a friend from the neighborhood. An off-duty Cleveland police officer named Roger Jones, thinking the car contained the shooter, ran to the vehicle with his gun drawn. Moments later, another gunshot, this time from the off-duty cop's gun. Jones, and police officials, quickly said in the aftermath that Kenny had been shot while reaching for a gun in the car.

Officer Jones "correctly and heroically took action to protect the safety of the citizens of Cleveland," Cuyahoga County prosecutor Tim McGinty said in a letter to Cleveland Police Chief Calvin D. Williams after McGinty's office ruled the shooting was justified.

But now, inside a federal courtroom three years later, that official account was toppling over.

Smith's attorneys Terry Gilbert and Jacqueline Greene argued Officer Jones had violated Kenny Smith's civil rights with an unjustified use of deadly force. They dismantled the city and Jones' story with the help of an eyewitness who had watched Smith die outside the car, with his hands up. Physical evidence — there was no blood in the car — backed up the scenario. The city's version of the story — that Smith was shot in the head, then walked a few steps onto the pavement where he expired — came off as implausible.

So confidence was high as the jury packed up for deliberations on the morning of Sept. 8. Smith and her family members barely had time to get settled in the courthouse cafeteria for the wait when they were told the jury was back. It was before noon.

Shauna Smith was sunk in an expectant daze as the jury handed over their decision. Slowly the words began tumbling from Judge Oliver, a storm of legalese filling Smith's confused ears. Only when the judge began reading dollar amounts did she realize they'd won: $4.5 million for the wrongful death, $1 million for Kenny's survivors. Her face wet with tears, Smith wrapped her attorneys in hugs, ready to finally push on into a different part of her life. Her son's death had occasioned the second-largest civil judgment against a Cleveland officer in recent history.

"It was joyful," Smith recalls today. "I thought now at least I could move forward with my life, try to live normally."

But thanks to some crafty moves from the city's law department, Smith's moment of justice might never come.

Across the country, piggy bank-busting civil judgments have become the best way to keep police and municipalities honest in cases of officer misconduct. From 2004 to 2014, for instance, Cleveland shelled out $10.5 million in settlement money to victims of badly behaving cops. Under state law and the terms of the union contract, chronically cash-strapped Cleveland indemnifies officers in the cases where they've been personally found liable, meaning ultimately, taxpayers foot the bill for an officer's misconduct.

But now, in the two largest civil judgments currently sitting on the books — one being Kenny Smith's death; the other a sloppy and malicious murder investigation that railroaded an innocent man — the city has pulled a move that one veteran civil rights lawyer calls "wrong, immoral, disingenuous and unethical."

In both cases, the Cleveland law department used city funds to pay for cops saddled with judgments to move into personal bankruptcy. It's a calculated effort, according to the attorneys fighting the move, for the city to skip out on their responsibilities to pay the judgments.

The screwjob burns all the more after the parade of black eyes the city has suffered due to cops and criminal justice. Just as mayor Frank Jackson, clutching the Department of Justice's 2014 consent decree, promised citywide soul-searching on police reform, Cleveland's law department is messing with civil matters that have already been decided by a jury.

And the implications aren't only local.

"This provides a road map for any municipality that wants to evade their obligations," says Ruth Brown, a Chicago attorney currently locked in legal judo with Cleveland over the issue. "We fully expect that if Cleveland is allowed to get away with this, they will try this again."

***

The clerks who were catching incoming filings at the U.S. Bankruptcy Court in the Northern District of Ohio in July 2013 wouldn't have had much reason to run more than a bored eye over the 52-page filing stamped with Denise Kovach's name.

The retired Cleveland police detective listed the usual ho-hum stack of assets: an $82,500 Brecksville home; $66,000 in a public employee retirement plan; $63 in cash; a $250 9mm Smith and Wesson; two toy poodles checking in at $500.

But a closer look would have spotted a surprise in the debt column: $13.2 million, all owed to a man named David Ayers. "Federal Section 1983 Claim," the listing notes, "rendered March 2013."

In December 1999, David Ayers was a Cuyahoga Metropolitan Housing Authority security guard when a 76-year-old woman was found beaten to death in the authority-owned high-rise Ayers called home as part of his job. CMHA police and the Cleveland detectives assigned to the case, Denise Kovach and Michael Cipo, put Ayers in the crosshairs of their investigation, despite zero concrete evidence tethering him to the death.

Instead, the detectives made false statements in search warrant affidavits; testified Ayers made a partial confession (even though neither noted such a statement in their case notes — case notes, incidentally, which take the time to point out when an interviewee appeared "gay like"); forced a friend of Ayers to sign a false affidavit (the friend later said he was coerced into signing); declined to follow-up on (and later didn't tell defense attorneys about) a recent fight the victim had had with a family member who was stealing her money; and dispatched a jailhouse snitch, armed with details of the case, to chat up Ayers in jail. At trial, that snitch, Donald Hutchinson, told a jury the former CMHA officer confessed to the crime.

All this — what a later 2013 appellate court judge would call sufficient "evidence that Detectives Cipo and Kovach conspired to violate [Ayers'] civil rights" — secured Ayers' conviction in March 2000. He was sentenced to life in prison without parole.

So began a 11-year legal brawl, with Ayers and his attorneys from the Ohio Innocence Project mounting a series of state and federal appeals to right the wrongful conviction. Finally, in 2011, DNA evidence secured from pubic hairs found on the body of the victim was tested. It failed to match Ayers. He was exonerated, and quickly launched a federal lawsuit, known as a Federal Section 1983 claim, against the city, CHMA, and the detectives who engineered his railroading. Lawyers for the city of Cleveland law department represented the officers when the case found its way to trial in early 2013.

That March, jurors found that, yes, Kovach and Cipo had violated Ayers' rights with their investigation and arrest. The exoneree was awarded a $13.2 million judgment against the two detectives, the largest such judgment at the time.

But Ayers' happy financial ending wasn't in the offing. As records now indicate, a month after the verdict, Cleveland Law Director Barbara Langhenry signed a contract with a Broadview Heights attorney named David Leneghan to represent Kovach and Cipo. The detectives "have requested legal representation to assist them with personal, individual bankruptcy proceedings," the contract stated.

Cipo never got a chance: He died in July 2013. But later that month, Kovach dropped her 52-page Chapter 7 filing on the district court, including the tallies of assets (toy poodles, Smith & Wesson) and debts, including $6,000 in credit, and nearly $13 million for the Federal Section 1983 claim.

By November, with a routine snap of a bankruptcy judge's pen, the millions Ayers had earned from his decade in hell were swept away, and with it, apparently to the city's thinking at least, Cleveland's obligation to foot the bill for the bad cops and the justice awarded by the jury.

***

"We became notified the officer was filing for bankruptcy, and basically realized Cleveland had engaged in a wrongful scheme to evade the judgment," explains Ruth Brown, one of Ayers' attorneys at the Chicago firm Loevy & Loevy.

In a typical case where a city employee has been slapped with a civil lawsuit, the Ohio Revised Code dictates the municipality has the "duty to defend" the employee as long as they were "acting both in good faith and not manifestly outside the scope of employment or official responsibilities." So too with indemnification: If the employee meets those two requirements and is found liable for a civil judgment, the law says the city indemnifies — or picks up the tab.

This tracks nationally. "Police officers are virtually always indemnified," wrote UCLA law professor Joanna C. Schwartz in a 2014 study that crunched data on settlements from the country's largest police departments, including the Cleveland PD. Overall, Schwartz found that cities indemnify officers in 99.98 percent of the cases she studied.

"Between 2006 and 2011, in forty-four of the country's largest jurisdictions, officers financially contributed to settlements and judgments in just .41 percent of the approximately 9,225 civil rights damages actions resolved in plaintiff's favor," she wrote. "[A]nd their contributions amounted to just .02 percent of the over $730 million spent by cities, counties and states in these cases."

Interestingly, Schwartz found that Cleveland was one of the few municipalities that hadn't fully indemnified officers in two cases out of the 35 local civil rights actions resolved in favor of the plaintiff that she examined.

In one case, Cleveland officers beat up a handcuffed driver after an auto accident during an unrelated 2007 car chase. One of the cops was criminally charged from the incident and later fronted $25,000 of the total $45,000 paid to the victim. The other case stemmed from a 2009 lawsuit ignited when an off-duty Cleveland police officer working security at a housing complex shot and killed a resident. The officer eventually paid $12,000 of the total $47,000 payout.

However these cases, where the incident was outside of the scope of the officer's employment or led to criminal charges — i.e., was done in bad faith — have little in common with the Ayers case.

But rather than indemnify per state law in that case, the city paid for the officers to enter bankruptcy — paying not only for their legal representation, but for their filing fee. Not to think about going into bankruptcy, Ayers' attorney Brown points out, but to dive right in.

"I think it's really clear when you look at the contract that the purpose was not to provide the officers with neutral, unbiased legal advice," she explains. "It was to ensure they filed for bankruptcy right away."

For one, the contract didn't pay the attorney by the hour, but instead forked over a $1,000 lump sum for each bankruptcy. "This is pretty unusual," Brown argues. The contract also does not compensate the bankruptcy attorney for any legal research; in fact, the attorney must get permission from the city's law department to undertake any research, discouraging the officers from finding an alternative to bankruptcy.

So why would the city want its officers to go into bankruptcy? To flush away the judgment without indemnifying the officers, Ayers' lawyers claim. As Brown points out, when Kovach's filing actually hit the court, nowhere in the document did it mention Kovach had a right to indemnification for the Ayers debt.

Brown argues the situation created a plus-sized conflict of interest: It doesn't benefit Kovach to declare bankruptcy when her debt can be paid off by the city. But it does benefit the city for Kovach to declare bankruptcy rather than seek indemnification from Cleveland. And Cleveland was paying for Kovach to go into bankruptcy.

"No attorney in good faith would ever counsel a client to go bankrupt instead of seeking indemnification first from the city of Cleveland," Brown argues. "The only reason these employees made that decision is because the attorneys representing them were also representing the city of Cleveland."

She continues: "Once Cleveland had any thought it was not going to indemnify the officers, it was not appropriate to have the same counsel representing Cleveland and the officers. It's a clear violation of legal ethics."

In June 2015, Ayers fired off a lawsuit against the city, an attorney in the city's law department, and the bankruptcy attorney who represented Kovach in her Chapter 7 filing. The new complaint blasted the city for an "ill-conceived attempt to avoid" the judgment.

Although the city declined to answer questions about the lawsuit due to ongoing litigation, subsequent filings have staked out its position.

Cleveland doesn't believe a plaintiff in such a case has any right to indemnification if the officer involved doesn't want it. The city also points out that the police union contract caps indemnification at $1 million. That said, as Brown and Ayers' other attorneys point out, state law requires full indemnification: no cap. And the police union contract contains language suggesting the Ohio code trumps the contract's fine print.

"It's a tenuous legal argument that no court has endorsed," Brown says flatly. "Cleveland is required to indemnify above a million dollars. And they have indemnified officers in the past above a million dollars."

In 2000, the city paid out a $3.1 million judgment won in civil court by a man paralyzed after being shot by police. Three years later, the city paid $1.9 million to the family of a 6-year-old boy accidentally shot by a Cleveland detective in Collinwood. In 2008, the family of Ricado Mason won $1 million in a wrongful death suit.

David Leneghan, the bankruptcy attorney paid by the city to file Kovach's filing and one of the parties named in the recent Ayers lawsuit, blasts back against the allegations in the complaint. He says that Ayers' own attorneys waited too long to make the indemnification an issue, after the bankruptcy was closed, even though they knew it was going forward.

"David Ayers' purported right to personally seek compensation from my client's employer is not an asset which should have been listed in bankruptcy," Leneghan wrote to Scene in an email. "David Ayers' right to seek payment from my client's employer existed both before and after bankruptcy — there was no interference with that.  Bankruptcy just means that my client will not have to be personally liable, nor have to personally pay, the Ayers judgment."

He continues: "I have repeatedly stated on the record that it appears that David Ayers waited too long, more than two years, before filing his lawsuit for indemnification, which, in my opinion, is beyond the statute of limitation period for a claim for statutory indemnification in Ohio."

Some of that legal swamp will be drained and clarified as the parties continue to spar in court. In the meantime, Ayers hasn't seen any of his $13.2 million judgment. (Ayers did receive a $50,000 settlement from CMHA police before his civil trial.)

Also, it's become apparent the bankruptcy ploy isn't a one-time legal chess move in Cleveland's playbook.

As part of the paper shuffling that goes on between sides in the pre-game of a lawsuit, Ayers' attorneys asked the city if they'd hired bankruptcy attorneys for any other officers facing civil judgment.

The city answered with a contract between Cleveland and a private attorney to provide those services for Roger Jones, the off-duty officer who shot and killed Kenny Smith. The documents were dated about six weeks after the Cleveland officer was found liable for the death.

***

Smith's attorneys weren't happy when they were alerted last fall about the situation.

"They seem to want to try every possible angle to defeat the justice that's required by the court in providing indemnification," attorney Terry Gilbert says. "It would be like if you were in a car accident and there's insurance for the wrongdoer, but the insurance company refuses to pay — that's unheard of. That's what they're supposed to do."

But the city's moves in the Ayers and Smith cases have implications that go beyond the two cases, as Gilbert, and civil rights lawyers across the country, clearly point out.

As the recent Tamir Rice situation shows, police misconduct cases are less likely to find footing in the criminal justice system. "Civil rights lawsuits for money damages under the Federal Civil Rights Act are really the only check that exists on rampant police misconduct that is resulting in hundreds of unnecessary deaths, years in prison on the basis of frame ups, and many more small injuries," says John Burton, a California attorney who serves as president of the National Police Accountability Project, a non-profit branch of the National Lawyer's Guild.

Cleveland's actions in the Smith and Ayers case appear to be an attempt to dance around that check. "I haven't heard of this happening a lot," Burton adds.

For the city — which is still trying to scrub off the umbrage of the Department of Justice's 2014 consent decree regarding bad police practices, the controversial acquittal of police officer Michael Brelo and the deaths of Tamir Rice and Tanisha Anderson — even the appearance of a concerted effort on the part of the law department to shake loose of the federal judgments tied to police misconduct is a bad look.

"I believe that a chronic problem in municipal governments nationwide is the disconnect between the responsibilities of the law department and the responsibilities of the politicians that run the municipality," says David Malik, a Cleveland civil rights attorney who is not involved in either the Ayers or Smith cases.

"You could have a very benevolent mayor who feels for his constituents about a wrong that has occurred," Malik says. "At the same time, you could have a law department that is sending a message like they are sending in the Ayers case, which is, 'I don't care.'"

Subodh Chandra, the local attorney representing the Tamir Rice family, also served as law director in Mayor Jane Campbell's administration. During his tenure, Chandra says his office would seek to resolve cases quickly where the city could face exposure in the early innings of litigation.

"Unfortunately, the law department over the last decade has not been doing as much of that as they should," he explains. "The Kenny Smith case really should have been settled much earlier."

Chandra however, says on his watch the law department never cooked up such a scheme. "It's unprecedented for the city to expend it's own resources for bankruptcy counsel for officers or city officials," Chandra says. "It may be doing it to avoid the liability of the poor judgment that led to the [civil judgment] to begin with."

He adds: "It just shows you how elusive justice. The criminal justice system is broken, and rarely if ever does it hold police officers accountable for their conduct. The civil justice system takes an enormous amount of time and expense, and even when one jumps over every hurdle, one still might be left with nothing because of this maneuvering. And that's not something the city should be proud of."

It remains unclear whether Mayor Frank Jackson was advised of the law department's activities. The city declined to answer that question. City council members, however, were caught off guard when told of the practice.

City Council president Kevin Kelly tells Scene he was not aware the law department was opting to hire bankruptcy attorneys for officers with civil judgments rather than indemnification.

"I hadn't heard of that," Kelly says. "I wish I could comment more intelligently on that, I just don't know enough about this area of law." The law department, he points out, has wide discretion within their council-approved budget to hire outside counsel, as well as settle lawsuits.

"Man, you blew me away with that," says councilman Kevin Conwell, who is the vice-chair of the public safety committee. "I think I got to dig into this one." When reached on his cell phone last week, Conwell was walking his district, distributing fliers urging his constituents not to re-elect Tim McGinty for county prosecutor.

Conwell noted he'd ask the current head of the safety committee, councilman Matt Zone, to inquire in writing to the law department about the practice.

Cleveland councilman Jeff Johnson also says he has not been informed of the practice.

"I believe it is inappropriate for the city to pay for lawyers for bankruptcy," Johnson says, adding that the decision should be left to the individual. By hiring the officers' bankruptcy attorneys to discharge settlements, the city is sending the wrong message, he argues. "It's disingenuous. We're making a statement in public that money is our predominating concern in these cases, not whether a citizen was harmed or not."

Attempts to reach Kovach and Jones for this article were unsuccessful. An email for comment to the city-hired attorney representing Jones was also not answered. Steve Loomis, the outspoken head of Cleveland Police Patrolman's Association, also did not return messages seeking comment.

In response to questions about the cases, a Cleveland spokesman issued the following statement:

"The Ayers and Smith judgments are not against the City of Cleveland, but are against the individual police officers. In the Ayers case, one of the police officers has died and the other discharged the debt in bankruptcy.  The Smith case currently is on appeal to the Sixth Circuit Court of Appeals. The City does not avoid the payment of its legal obligations, including judgments."

***

Shauna Smith sits in the kitchen of her tidy South Euclid home, her nails tapping nervous staccato against the tabletop. Her dead son Kenny — big smile and creased cheeks — is peeking from an array of pictures tacked on the fridge over her shoulder.

"I'm tired of talking about it," she says, the words friendly but as deflated as a blown tire. "I really didn't even want to do this," she says, indicating the interview she's in the middle of now.

Although Jones has yet to file for bankruptcy, Gilbert and Greene, Smith's attorney, are watching the court for the eventual filing. The judgment against the officer is currently in appeal. Gilbert says he hopes to put the officer and city on notice before they try to atomize the debt with bankruptcy. "I have a client who lost her son to a terrible shooting that never should have happened," the attorney says. "Basically the city is saying to her, 'We don't care.'"

This morning in her house, Smith is hearing the message loud and clear. "I've been though enough," she says. "The jury has reached a verdict. Quit dragging it out; quit coming up with these tactics." The hardest part, she says, it that all this has kept her stapled to the part of her life she was hoping to push free from with the verdict.

"I'm tired," she says again.

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