December 2013 - Issue 22

Encouraging Community Service

Farewell to Catherine Sloan

Reporting Liability Claims

Liability Trial Update - Glaser v. San Juan Capistrano, et al.

C.A. Says Police May Not Initiate Asset Forfeitures

Workers' Compensation Claims Audit

OSHA Regulatory Compliance

Jon Shull

News: Worthy

Encouraging Community Service

At the California JPIA, service has been a hallmark of our organization throughout its 35-year history. This service philosophy comes to life every time we help a member agency with a simple training or risk management request. It also comes to life in more challenging circumstances such as when a storm hit that pulled roofs off homes, knocked down brick walls, and toppled roughly 20 electrical poles within a member city.

I have watched the Authority's lend-a-hand spirit grow -- whether with Authority employees donating their own leave hours to a co-worker who has exhausted paid leave due to a catastrophic illness or employees getting together to serve Thanksgiving dinner to the homeless.

We encourage community service and civic participation by supporting organizations and programs that deliver measurable outcomes and have a lasting impact on communities. 

This year, the Authority's employees chose to donate food to the Orange County Food Bank. The Orange County Food Bank distributes nearly 20 million pounds of food annually. They provide food and personal-care items to more than 400 other helping organizations including churches, shelters, and senior centers. At the food bank's warehouse, volunteers receive and package 26,000 boxes of food each month.

Rachel Lara, office assistant, coordinated the food drive. While planning a food drive might be a simple undertaking, Rachel inspired employees go beyond the lend-a-hand spirit. Authority staff was divided into two food drive "hockey" teams: the Sharks, led by Jeff Rush, Workers' Compensation Program Manager; and the Kings, led by Jim Thyden, Insurance Programs Manager. Additionally, employees were given "Can IOU Tickets" as part of the "You're Busted!" program. If employees were late to a meeting, or were the last to arrive to a meeting, they were "busted." The only way to redeem themselves was to donate a food item. 

There were a few hat-tricks and power plays between the Sharks and Kings during the three week food drive, and some might say there was a bench-clearing brawl in the final minutes as the food drive ended and the teams raced to meet the goal of donating 100 food and personal care items to the food bank. 

Final score: Kings - 305 and Sharks – 302. The staff donated over 600 food and personal items to the Orange County Food Bank. That's quite an accomplishment given the Authority's staff of 23 people.

All of us at the California JPIA consider community service and civic responsibility a key part of who we are as an organization.



Catherine Sloan

News: Worthy

Farewell to Catherine Sloan

After nearly ten years of service, California JPIA Senior Training Specialist, Catherine Sloan, announced her retirement at the end of the year. 

"I can't believe it has been almost 10 years," reflects Sloan who joined the Authority in August 2004 as a Training Coordinator.

Sloan plans to spend her newfound time expanding her travel experiences. "I love to travel whether it be with my family or with friends" Sloan shared. "I am looking forward to discovering new destinations and having the time to experience the regional culture, specifically the lifestyle of the people, the history of the people, their art, architecture, religion, and other elements that shape their way of life." 

Sloan has been very involved in community service, "I have always felt that little things can make big differences." She plans to continue her involvement and commitment to giving back to a number of worthwhile organizations and causes on both a local and global level. 

Between traveling and spending time with her children and grandchildren, her retirement schedule is filling up quickly. "There is a stack of books that I just don't seem to have time to read," Sloan laughs, "and learning to play Bridge has been on my bucket list for a while." 

She will miss her friends at the Authority and the people that she has come to know. "Catherine has left a lasting impression on the Authority" says Jon Shull, Chief Executive Officer, "her support of the Authority has been unwavering. We will miss her."

Join us in sending our best wishes to Catherine Sloan.



News: Worthy

Reporting Liability Claims

by Paul Zeglovitch, Liability Program Manager

Members often ask "Do we need to submit all liability claims to the Authority for review?" The answer is "Yes." There are several reasons why members should submit all liability claims and we will explore why below:

2013/2014 Memorandum of Liability Coverage (MOLC) 
The MOLC clearly mandates that all claims must be reported under Section 5, Conditions and Responsibilities, Part C (ii), Protected Party's Duties in the Event of Occurrence, Claim or Suit, wherein it states: "If a Claim is made against a Protected Party, the Protected Party shall immediately forward to the Authority's Claims Administrator every demand, notice, summons or other process received by the Protected Party or the Protected Party's representative". 

Professional Claims Handling
For over 30 years, the Authority has partnered with Carl Warren & Company as its third party administrator to handle liability claims. Carl Warren & Company is an industry leader in providing claims adjusting services to public entities. Under the supervision of our Liability Program Manager, their professional staff is dedicated to claims submitted by Authority members. The adjusters at Carl Warren & Company have the expertise to properly protect the members' best interests, sometimes before a claim is even filed. It is imperative that they receive the claim immediately upon being filed in order that they can conduct a timely, thorough investigation. Delay in reporting claims can hamper the proper handling of a claim and result in increased cost to the member and the pool. 

Loss History/Loss Prevention
When liability claims go unreported, the Authority is unable to capture a member's true loss history. This limits the ability of our LossCAP program to properly capture accurate loss data, analyze emerging trends, identify areas of concern, and recommend loss prevention strategies.

This important program provides cost-free analysis of your loss history and assists in implementing or modifying existing risk management programs, policies and practices, resulting in a lowered frequency and severity of liability losses. This results in cost savings to both your agency and the pool. 

Annual Contribution and Retrospective Calculations
Each year, the Authority performs an analysis of each member's loss history with one of the main focus areas being the frequency and severity of claims. It is essential to have a true count of claims incurred by the member and submitted to the Authority in order to calculate a fair and reasonable assessment of that member's program participation cost. "Holding back" claims provides a flawed picture of that member's risk exposures and experience. 

We encourage you to take advantage of your membership by allowing the resources of the Authority to work for you. Should you have any questions or concerns, please contact your assigned Regional Risk Manager



Legal Matters

Liability Trial Update - Glaser v. San Juan Capistrano, et al.

by Paul Zeglovitch, Liability Program Manager

In December of 2010 South Orange County experienced several weeks of heavy rains culminating in a large storm on December 20, 2010. During the early morning hours large quantities of water, mud, and debris flowed from a slope near the plaintiffs' neighborhood, into a concrete V-ditch until it reached an inlet structure. The quantity of mud and debris blocked the inlet structure causing the water, mud, and debris to bypass the blocked inlet and flow across Old San Juan Road and onto the plaintiffs' property. The water, mud, and debris flowed through the plaintiffs' property toward Trabuco Creek, and in the process entered the plaintiffs' home and flooded the entire first floor of their upscale home. 

Plaintiffs filed suit, naming only the City of San Juan Capistrano as a defendant, claiming mainly that they had control over the v-ditch in question due to an easement, under an inverse condemnation theory. Inverse condemnation is defined as a "taking" of one's property with the public improvement of a public entity being a "substantial factor" in the causation of the event that triggered the plaintiff's damages. Inverse condemnation cases are dangerous to public entities because juries are left to decide whether the public improvement, often sewer, water, or flood control related improvements, were a substantial factor or not. Substantial factor often is applied liberally, with a finding of liability against the public entity, which results in an award to plaintiff of all of their claimed damages in the absence of any other defendants to apportion amongst. It also brings the award of attorneys' fees, all of which are payable by the public entity and not subject to any apportionment. 

Defense counsel argued that despite an easement being granted subsequent to construction, the City did not own the storm drain system that is the subject matter of this lawsuit. Rather, it is privately owned by the homeowners' association and therefore the association's obligation to maintain it. Defense counsel argued that if the City does not own or maintain the subject storm drain system, then it cannot qualify as a "public improvement." 

The court bifurcated this case, splitting the inverse condemnation portion from the other causes of action for dangerous condition of public property and nuisance. The inverse condemnation phase of trial commenced on June 10, 2013 with Judge Andler presiding. This was a bench trial, with no jury. Despite allowing plaintiff attorney to introduce a plethora of arguments against our objections, we are pleased to advise that immediately after the trial ended on July 8, 2013 and without taking the matter under submission, Judge Andler issued a full defense verdict. The key issue was the City's non-ownership of the v-ditch despite having an easement over same. The Judge found that despite having an easement, the system was clearly not owned by the City and therefore not a public improvement, subject to inverse condemnation law. Plaintiff will be able to proceed with their causes of action for dangerous condition of public property and nuisance, however given the ruling on inverse condemnation we feel confident that a Motion for Summary Judgment will be successful in fully extracting the City from this litigation. Job well done by the Authority's defense panel attorney, Ed Richards of Kutak Rock. 



The Court Report

C.A. Says Police May Not Initiate Asset Forfeitures

Reprinted from the Metropolitan News-Enterprise, December 9, 2013


Police agencies may not initiate asset forfeiture proceedings, which must instead be only undertaken by the prosecuting agencies of the appropriate jurisdiction, the Fifth District Court of Appeal has ruled. 

The court also held that strict compliance with notice requirements is necessary in order to lawfully uphold a forfeiture. 

The decision was handed down in response to an appeal by Adolfo Cuevas who had been parked at a Tulare shopping mall with his friend when local police approached and questioned them in response to their car alarm, which had gone off. During a search, the officers seized approximately $7,014.37 in cash that was in Cuevas's pockets. 

They also seized $5,862.62 from his friend's pocket and an additional $3,990 that was found behind the car's dashboard.

After transporting him to the Tulare police station, police discovered trace amounts of methamphetamine on a five-dollar bill that had been in Cuevas' possession. Based on that discovery, police gave him a "Notice of Nonjudicial Forfeiture Proceedings" form which indicated that $16,871.99 had been seized at the police station address of 260 South M Street due to, "violations of California Health and Safety Code Section(s) 11379 H & S."

Cuevas then signed a "Disclaimer of Ownership" form from the department, notifying them that he had no ownership claim on the $5,862.62 and $3,990 amounts that were respectively seized from his friend and the car. He was later charged with unlawful possession of a controlled substance in violation of Health and Safety Code § 11377(a).

Approximately five months after the seizures, the district attorney placed a notice of forfeiture in a local paper indicating that police had seized "$16,871.99" from "260 S. M St." based on the violation of Health and Safety Code "section 11379."

Shortly more than one month later, the Tulare County District Attorney's Office executed a declaration of nonjudicial forfeiture over the sums, again describing "$16,871.99 in U.S. Currency" seized from the police department address for violation of "Section 11379." 

After the forfeiture was declared, the case against Cuevas was dismissed and he then filed a motion to compel the return of his $7,014.37. The trial court denied his motion on the basis that the money "was subject to a civil forfeiture proceeding."

Based on a petition for a writ of mandate that Cuevas filed, the Court of Appeal directed the trial court to vacate its order denying the motion to return the money, ruling that the forfeiture proceeding was "invalid in the first instance" since it was initiated by police, rather than prosecutors, along with the fact that the notice to Cuevas was defective.

Writing for a unanimous panel, Justice Rosendo Peña Jr. said that the forfeiture-initiation and notice procedures found in Health and Safety Code § 11488.4 expressly require that they be carried out by either the office of the Attorney General or district attorney and such duties could therefore not be delegated to police or any other outside agency.

"It is well settled that statutes imposing forfeitures are disfavored and, thus, those statutes are to be strictly construed in favor of the persons against whom they are sought to be imposed," he said.

Peña also said that even if prosecutors were allowed to delegate forfeiture proceedings to police, the attempt at forfeiture in Cuevas's case would still fail due to facial defects in the notice to him which he described as "fatal flaws" in light of the strict construction applied to forfeiture statutes. 

Peña concluded that the forfeiture reference to the total sum of $16,871.99 was defective since Cuevas had expressly disclaimed ownership of the other sums that were seized and only claimed an interest in the $7,014.37 taken from his person. He said that this disparity ran afoul of § 11488.4(j)(2) which requires the notice to include an "appraised value" of the seized property.

"Providing only the entire amount seized is an ambiguity that can impede a potential claimant, particularly if he be among more than one, from identifying the proceeding in which he might claim an interest," he wrote.

The opinion also concluded that the notice failed to comport with the statutory requirement for the notice to include the "place of seizure," since it erroneously listed the address of the police station, rather than the shopping mall where the money was first taken.

Furthermore, said Peña, the notice failed to allege the proper violation with respect to the forfeited property as required by § 11488.4(j)(4). 

Peña wrote:
"Here, the notice was completed by a peace officer rather than a prosecutor. Hence, the notice only references the violation of the law that permitted seizure by the law enforcement officer, section 11379. The notice did not allege a violation with respect to forfeiture. Because a law enforcement agency is not a prosecuting agency, it does not 'allege' violations of law in the context intended by the statute.

Moreover, when the complaint of the Tulare County District Attorney was filed...it alleged petitioner had committed a violation of section 11377, subdivision (a), or possession of methamphetamine. However, possession of a controlled substance under section 11377 is not an offense listed in the forfeiture statutes." 

He also said that because the notice by publication contained the same informational defects, the publication requirement was likewise not properly met. 

Peña said that since Cuevas was not a defendant in a criminal proceeding, he still had standing to claim back his property in accordance with § 11488.4(g) and that the trial court should schedule a new hearing on his motion to recover it.

The case is Cuevas v. Superior Court (People), 13 S.O.S. 6208. 
Copyright 2013, Metropolitan News Company



Coverage Programs

Workers' Compensation Claims Audit

by Jeff Rush, Workers' Compensation Program Manager

The annual audit of York Risk Services Group, the Authority's workers' compensation claims administrator, was completed in September of this year. The report, as with other recent years, was very favorable. 

The longtime auditor, Dave Guyer, reviewed the work on 125 claims and the claims administration activities during the past fiscal year July 2012 through June 2013. Guyer focused on adherence to statutory requirements, industry best practices, contractual agreements, and established key performance indicators. 

This year's score of 95% showed overall improvement when compared to last year's score of 92%. In 72% of the ratable categories (62 categories of the KPI performance score card), York scored 90% or above and in an additional 10% they achieved a score of 80-89%. They also scored 98% in categories related to delivery of benefits to injured workers. In summarizing these results, Mr. Guyer noted "the continuing excellent administration" on the part of York. 

In addition to the high score York achieved, recognition was provided for the "stable and experienced claims staff" that is assigned to work on the Authority's files. Mr. Guyer went on to note that "such stability and experience levels...are extremely rare, and the California JPIA program has been the benefactor". 

Congratulations to York on a job well done!



Risk Solutions

OSHA Regulatory Compliance

by Joe Eynon, Risk Manager

The new initiative from the Occupational Safety and Health Administration (OSHA), announced on December 5, 2013, highlights the need for members to review and evaluate their safety programs to ensure compliance with all Cal/OSHA regulations. 

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA's role is to ensure these conditions for working men and women by setting and enforcing standards, and providing training, education and assistance. For more information, visit www.osha.gov

The U.S. Department of Labor's OSHA has empowered workers to ensure safe and healthful workplaces by protecting them under the Whistleblowers Protection Program. Assistant Secretary of Labor for OSHA, Dr. David Michaels states, "The ability of workers to speak out and exercise their rights without fear of retaliation provides the backbone for some of American workers' most essential protections."

Currently, workers can report hazards at their workplace to Cal/OSHA, by calling, mailing, or faxing a completed Web complaint form to the Cal/OSHA Enforcement Unit district office nearest the place where the hazards exist. 

Members are encouraged to take advantage of the Authority's resources to help ensure regulatory compliance. Not only will member agencies protect their employees by providing them with a safe and healthful workplace, but will also safeguard public funds by eliminating potential Cal/OSHA fines associated with noncompliance. 

For more information on Cal/OSHA, please contact your Regional Risk Manager.