A $13 Million Judgment No One Paid: Ayers v. Cleveland and Collecting Against Government Employees

Published April 16, 2020 · Ohio Supreme Court

Winning a verdict and getting paid are two different things. Most injured people never have to learn that, because most defendants are insured businesses or drivers with auto policies. But when the person who hurt you works for a city, a county, or another local government, the question of who actually writes the check can be as important as the question of who was at fault.

On March 25, 2020, the Supreme Court of Ohio decided a case that shows how badly that can go wrong. Here is what happened, what the Court held, and what it means for people with claims against government employees.

A judgment against two detectives

According to the Court's opinion in Ayers v. Cleveland, Slip Opinion No. 2020-Ohio-1047, David Ayers spent more than a decade in prison before winning his release on federal habeas corpus claims in 2011. He then sued the City of Cleveland and two of its police detectives in federal court for violating his constitutional rights.

The federal court dismissed the claims against the city itself. The case against the two detectives went to trial, and the jury found that they had violated Mr. Ayers's federal constitutional rights. The court entered a judgment of $13,210,000 against the detectives, later increased by costs and attorney fees.

Then the collection problem began. The opinion recounts that the city did not step forward to indemnify the detectives, and the detectives did not ask it to. One detective died without paying anything. The other, represented by a lawyer the city retained for her, filed for Chapter 7 bankruptcy, and the bankruptcy court discharged her personal liability on the judgment.

The indemnification statute

Ohio's political-subdivision law has a provision meant to protect public employees from exactly this kind of financial ruin. At the time, R.C. 2744.07(A)(2) (the same rule now appears in R.C. 2744.07(B)) said that a political subdivision "shall indemnify and hold harmless an employee" for most compensatory judgments arising from the employee's work, if the employee acted in good faith and within the scope of employment. Punitive damages are excluded.

Mr. Ayers sued Cleveland in state court, arguing that the statute required the city to pay the judgment and that he, as the person holding the judgment, could enforce that obligation directly. The Cuyahoga County trial court agreed. The Eighth District Court of Appeals reversed, two to one.

What the Supreme Court held

The Supreme Court affirmed the court of appeals, six to one. Writing for the majority, Justice Fischer focused on the statute's wording: it requires the city to indemnify "an employee." The Court held that indemnification is a personal right of the employee, which "may be asserted only by the employee and it may not be asserted by a judgment creditor."

In other words, the injured person cannot make the city pay. Only the employee can, and if the employee never asks, or the debt is discharged in bankruptcy, the city's obligation may never be triggered.

The Court was careful to say how narrow its ruling was. It decided only the statutory question. It did not decide Mr. Ayers's separate argument that he had standing to enforce the detectives' rights under the circumstances of his case, and it noted that his other claims against the city, which had not yet been litigated, could be addressed in further proceedings.

The dissent

Justice Stewart dissented. She pointed out that the statute has no procedure for an employee to invoke indemnification, and that requiring an employee to pay first and seek reimbursement later is not "holding harmless" at all. She also questioned why the detectives, who had a clear right to have the city pay, offered instead to assign their indemnification claims to Mr. Ayers in exchange for his agreement to stop collecting from them personally. The statute, she wrote, cannot be applied in a way that "allows employees to control whether a legally qualifying judgment is paid."

That is the practical effect of the majority's ruling, and it is a bad result for injured people.

Why this matters beyond wrongful-conviction cases

Most of my clients will never be in Mr. Ayers's position. But the principle reaches any case in which the only defendant left standing is an individual government employee.

Ohio law already makes it hard to sue a city or county directly. Under R.C. 2744.02(A)(1), political subdivisions are generally immune, subject to a short list of exceptions. Individual employees are immune too unless, under R.C. 2744.03(A)(6)(b), they acted with malicious purpose, in bad faith, or in a wanton or reckless manner. And federal civil-rights claims, like the one I discussed in February's post on Montgomery County's jail settlements, often succeed against individual officers while the claim against the government entity is dismissed.

So it is easy to end up with a judgment against a person, not an institution. After Ayers, that judgment is only as good as the employee's willingness to invoke the right to be indemnified, or the employee's own assets, which are rarely enough to cover a serious injury. I wrote about a similar trap in the private sector in a 2016 post about a $2.9 million verdict with no insurance behind it.

"Who pays" comes before "who is at fault"

The lesson is that a claim involving a government employee has to be built, from the first day, around a source of payment. Some of the questions we ask at the start:

• Does a statutory exception make the entity itself liable? The clearest is R.C. 2744.02(B)(1): a city or county is directly liable for an employee's negligent operation of a motor vehicle within the scope of employment, subject to defenses for emergency runs. A direct claim against the entity does not depend on anyone's indemnification. My post on McConnell v. Dudley discusses the limits of that exception in police-cruiser cases.
• Is there a basis to hold the government entity responsible under federal law for its own policies, customs, or failures in training and supervision, rather than relying only on the individual?
• What insurance applies? Many local governments carry liability coverage or belong to risk-sharing pools. Your own uninsured or underinsured motorist coverage may also apply in a crash.
• Is there a private party involved? A contractor, a vehicle owner, or a private company working with the government has no governmental immunity.

Our guide chapter on what your case is worth makes the same point in plain terms: a case is worth what can be collected.

What this means for you

• If you were hurt by a police officer, a city driver, a jail employee, or another public worker, do not assume a judgment against that person will be paid.
• Talk to a lawyer before the claim is filed, so it can be structured to reach an entity or an insurance policy that will actually pay.
• Government claims carry immunity defenses and short deadlines. Our page on claims against the government explains the basics.