Major Decision On Connecticut’s Indemnification Law

Section 53-39a of Connecticut’s General Statutes “authorizes indemnification for economic loss, including legal fees, incurred by officers of local police departments who are prosecuted for crimes allegedly committed by them in the course of their duties when the charges against them are dismissed or they are found not guilty.” The Connecticut Supreme Court recently had occasion to issue a sweeping decision concerning the scope of the indemnification obligation.

The case involved Gabriele Nyenhuis, a police officer with the Metropolitan District Commission. On April 19, 2006, Nyenhuis, in the course of her employment, had an altercation with Stephen Atkins, a member of the public. The following day, in response to a citizen complaint filed by Atkins, the Commission suspended Nyenhuis’s police powers and placed her on administrative duty. On June 14, 2006, the West Hartford police arrested Nyenhuis in relation to the Atkins incident and charged her with assault in the third degree, reckless endangerment in the second degree, and falsely reporting an incident in the second degree. On November 5, 2007, after a jury trial in which the jury deliberated all of 47 minutes, Nyenhuis was acquitted of all charges.

Nyenhuis filed two grievances against the Commission, seeking: (1) “reinstatement in ‘time bank’ for vacation and earned time used between April 2006, through December 2006”; and (2) “to be made whole for loss of overtime dating from April 2006 to November 2007.” While the grievances were pending, Nyenhuis sued the Commission seeking indemnification for, among other things, lost overtime, seniority, sick time, vacation time and attorney’s fees and costs.

The first question the Court had to answer was whether Nyenhuis had to exhaust the grievance procedure in the contract. The Court found that the law allowed Nyenhuis to bring her lawsuit without first exhausting her administrative remedies under the agreement because the action was “premised on an independent statutory claim,” namely, indemnification pursuant to Section 53–39a. Indeed, that statutory claim is the only cause of action enumerated in Nyenhuis’s complaint. It is significant that Section 53–39a expressly authorizes a police officer seeking indemnification to bring an action in the Superior Court against his or her employing governmental unit to enforce the provisions of this section.”

The Court then turned to the Commission’s argument that Nyenhuis was limited to indemnification for economic losses incurred starting from the date of her arrest, and that indemnification for any economic losses sustained prior to arrest may be recovered only as provided by the terms of the contract. Finding the statute’s reference to “prosecution” ambiguous, the Court nonetheless found that “in considering when a prosecution begins, we find significant the undisputed proposition that even the investigative stages of a criminal prosecution may cause the subject to incur numerous kinds of economic loss, such as attorney’s fees and time away from work. Indeed, the Fifth Amendment to the United States Constitution affords the subject of a police investigation the right to counsel even before the initiation of adversarial criminal proceedings, so long as that person is in custody and subject to police interrogation, regardless of whether a formal arrest has occurred. The costly financial implications of being subject to a criminal investigation, viewed in juxtaposition with the purpose of Section 53–39a of making a police officer financially whole once he has been acquitted of a crime or the charges have been dismissed, leads us to conclude that the Legislature intended Section 53–39a to cover economic losses incurred prior to an arrest.”

The Court then turned to the issue of damages. The Court found that “the trial court properly determined that Nyenhuis was entitled to recover economic losses sustained as a result of the criminal prosecution and incurred prior to her arrest. We disagree, however, with the trial court’s conclusion that, as a matter of law, Nyenhuis is entitled to recover such losses from the date of the incident that led to the police investigation and criminal prosecution. The critical findings for the purposes of first, establishing a nexus between the criminal prosecution and the pre-arrest economic loss, and second, calculating damages, are whether the employee incurred economic losses because of an expectation or actual experience of a police investigation or criminal prosecution, or whether the employer precipitated economic losses in response to a police investigation or criminal prosecution.

“We conclude that the trial court’s findings that the criminal prosecution caused the plaintiff’s lost leave time were not clearly erroneous, we also conclude that the trial court did not make a specific finding as to whether the defendant placed the plaintiff on administrative duty because of the police investigation, thus establishing a clear nexus between her loss of overtime pay and the criminal prosecution. Accordingly, we conclude that a remand to the trial court is necessary for a new hearing in damages for a finding of causation relative to the plaintiff’s placement on administrative duty, and a new determination of damages in accordance with that finding.”

Nyenhuis v. Metropolitan Dist. Com’n, 2011 WL 1467736 (Conn. 2011).

This article appears in the June 2011 Issue