Deocampo v. Potts, No. 14-16192 (9th Cir. 2016)
Annotate this CaseThe City of Vallejo petitioned for Chapter 9 bankruptcy in 2008. Two years after the bankruptcy court confirmed Vallejo's debt-adjustment plan, a federal jury found that two police officers employed by Vallejo used constitutionally excessive force when they arrested Jason Eugene Deocampo. The district court entered a judgment for money damages against the officers in their personal capacities, and awarded Deocampo his attorney’s fees. The court noted that, under California law, Vallejo is generally obligated to indemnify its employees for claims against them arising from their employment. The court held that where, as here, the plan confirmed by the bankruptcy court did not expressly encompass claims or judgments against the city’s employees, the indemnification statutes do not subject such claims or judgments to adjustment by operation of law nor by the fact of the public employment itself. The court affirmed the district court’s denial of the officers’ Rule 60 motion for relief from judgment, and agreed with the district court that neither the judgment nor attorney’s fee award was discharged by Vallejo’s bankruptcy proceedings.
Court Description: Civil Rights/Bankruptcy. The panel affirmed the district court’s denial of a Rule 60 motion for relief from judgment, and agreed with the district court that neither a judgment against individual City of Vallejo police officers for excessive force nor a subsequent attorney’s fee award in favor of plaintiffs was discharged by the City of Vallejo’s bankruptcy proceedings. Plaintiffs filed this action against Vallejo police officers and others asserting excessive-force and other constitutional claims under 42 U.S.C. § 1983 and state law. Subsequently, Vallejo filed for Chapter 9 bankruptcy and the district court stayed the § 1983 action. After Vallejo’s plan for adjustment of debts was confirmed by the bankruptcy court, the district court lifted the stay in the § 1983 action, and a jury returned a verdict, finding that the officers used excessive force and awarding plaintiffs $50,000 in compensatory damages and attorney’s fees under § 1988. The officers moved for relief from judgment, asserting that the judgment and fee award DEOCAMPO V. POTTS 3 were effectively claims against the City of Vallejo that were subject to adjustment under the bankruptcy adjustment plan. The panel noted that under California law, Vallejo was generally obligated to indemnify its employees for claims against them arising from their employment. The panel held that California’s indemnification statutes did not render a judgment or concomitant fee award against an indemnifiable municipal employee a liability of the municipal employer for purposes of adjusting or discharging the debts of a Chapter 9 debtor. The panel further held that the bankruptcy court’s plan confirmation did not release any debtor but the City of Vallejo and did not expressly encompass claims or judgments against the City’s employees. Accordingly, the panel held that the judgment in the § 1983 action was the officers’ personal liability, not Vallejo’s. The panel emphasized, however, that its conclusion that the judgment was against the officers personally, and not Vallejo, did not relieve Vallejo of its obligation to indemnify the officers under California law.
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