5.3. SR 10-17-2005 - Laserfiche WebLink

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· It's a disincentive to inter-local cooperation. In any inter-local cooperative effort that could be considered a ':ioint venture", the potential total liability exposure is apparently now equal to the stahltory tort limit times the number of participating political subdivisions. In other words, the total liability exposure that the cooperating political subdivisions must plan for and fimd is now significantly greater. · It creates uneven results for claimants. E.g.. if you have the misfortune to be run over by an Metro Transit bus, you could recover up to $300,000; if you're 11.111 over by a bus operated by a six-member joint po\vers entity, you could recover up to $ 1.8 million. · Although the court didn't define 'joint venture" precisely. one section of the opinion describes it as a "mutual undeltaking for a common purpose." This language is troubling because it's so broad. It seems pretty clear that any agreement that creates ajoint pO\vcrs entity - i.e., a joint board with the power to receive and expend funds, enter contracts, hire employees, or own property - will be considered a 'joint venhtre". But it's possible that other types of intergovernmental cooperative arrangements will be affected as well. Even providing assistance to a neighboring city under a mutual aid agreement arguably might constitute a "mutual undertaking for a common purpose," and therefore a 'joint venture" in which all the members are vicariously liable for each others' actions. · It increases the risk that ajoint powers entity's coverage limits could turn out not to be enough. When LMCIT issues coverage for a joint powers entity, that coverage protects all of the constituent political subdivisions as well for liability arising from the joint entity's activities. In htrn, coverage for the joint pO\vers entity's activities is excluded under the individual city's own coverage. The goal is to be able to provide a single unified defense for all of the parties, rather than having multiple attorneys defending each city separately. But because of the "limit stacking" implication of the court's ruling, there's now a greater risk that the joint entity's coverage limit might not be enough.) Coverage issues fOl' ,joint powers ngreements .1vIutual aid agreeme11ls. service contracts, and similarjoint pml'ers agreeme11ls The Reimer mling doesn' t create any new coverage issues for most joint powers agreements, including mutual aiel agreements, agreements under which a city purchases service from or provides service to another political subdivision, and so on. The ruling does increase the city's liability exposure under these contracts, since there's now a risk that a city could be held liable tor its partner's actions under the Reimer ruling's '~oint venture" theory. But the city's LMCIT liability coverage would cover the city's potential vicarious liability for another political subdivision's actions if this type of agreement were deemed by the court to be a "joint venture". I Of course, there's always some risk that the coverage limit will turn out to be inadequate, whether it's a joint powers situation or an individual city, because some claims aren't capped by the slannory limit. Federal civil rights claims are an example. :2