West Covina can move forward with its lawsuit asking that an insurance pool be required to pay for $4 million in losses the city suffered after losing an employment case trial in 2018, a judge ruled Wednesday.
Los Angeles Superior Court Judge William F. Fahey denied a motion for dismissal brought by lawyers for the Big Independent Cities Excess Pool Joint Powers Authority, who argued in their court papers that their client was not obligated to indemnify the city for intentional misconduct.
“Under California law, willful acts include adverse employment actions in violation of public policy, including retaliation,” the authority’s attorneys argued in their court papers.
A Los Angeles Superior Court jury in October 2018 found in favor of former West Covina Fire Department Deputy Fire Marshal Jason Briley, who had been a member of the WCFD for nearly a decade before being fired in September 2015.
Briley alleged he was fired in retaliation for reporting numerous alleged fire safety violations, including the fire department’s decision allowing a company, AltaMed Medical and Dental Group, to remain open while the building in which it was located was undergoing construction.
Briley maintained the structure did not undergo proper testing of the alarm system. Lawyers for the city maintained Briley lost his job for legitimate reasons and that others found it hard to work with him.
The city obtained $27 million in coverage from the insurance authority intended to protect it against such claims as wrongful termination and retaliation brought by city employees and West Covina paid all of its required premiums, the current suit states.
After Briley obtained a judgment against the city — which is accruing interest– the insurance authority “started trying to wiggle out of its coverage obligations” and now claims that the jury found liability in violation of a state Labor Code section that is an uninsurable wrongful act under the Insurance Code, the current suit states.
The insurance authority is also now maintaining it did not get some reports about the status of the litigation before trial and that this precludes coverage, even though it did not raise the issue until Briley won the case, the current suit states.
The city has appealed the Briley verdict to the 2nd District Court of Appeal. Fahey scheduled trial of the current lawsuit for Jan. 10, 2022.