.- City of Cincinnati

[Pages:20].-

' City of Cincinnati

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Offi~xof Ciy Solicitor

April 1,1994

O'dell M.Owens, M.D., Chairman

Board of !hmtees University of Cincinnati 201 Administration Building Cincinnati, Ohio 45221-0062

Dr.Joseph A. Steger, President

Of6ce of the Resident University of Cincinnati

P.O.Box 210063 Cincinuati, Ohio 45221-0063

RECEIVED d?R 6 t994

PRES. OFF,

Ohio Board of Regents

L EIaine Hairston,Chancellor 30 E. Broad Street, 36th Floor Columbus, Ohio 43266-0417

CERTIFIED MAIL

h y D. Dupuis C1f.v .Y*fi,frw

Re: City of Cincinnati's Demand for Defense and I n L - d c a t i o n

ShufFv. Saenrrer. et al.; Case No. C-1-94-123;

Haaer. et al. v. Univeraitv of Cincinnati, et al.; Case No.C-1-94-146;

. C h r i s ~ . e t a l . v . U n i v e m* t v of Cincinnati et al.; Case No. C-1-94-149;

. Convers v. Univeraib of Cinu'nnati et al.; Case No. C-1-94-179;

United Stat- District Court, Southern District of Ohio, Western Division

Dear Dr.Owens, Dr.Steger, and Chancellor Hairston:

Demand ia hereby made upon the University of Cincinnati, ita Board of Trustees and the Ohio Board of Regenta to defend and indemnify the Ciw of Cincinnati in regard

to the above captioned lawsuits.

..

Dr.Owens, Dr.Steger and Chancellor 'Hairston

April 1,1994 Page 2

In addition to the defense of the City of Cincinnati in this matter, various other individual defendante have made demands upon the City of Cincinnati for a defense and/or indemnification in regard to these cases. A demand has been made upon the City of Cincinnati to provide a defense andlor indemnification on behalf of the following individuals in the above-captioned consolidated cases:

1. Eugene L. Saenger, M.D. 2. Edward B. Silberstein, M.D. 3. Bernard S. Aron, M.D. 4. Harry Horwitz, M.D. 5. James G. Kereiakes, Ph.D. 6. Harold Perry, M.D.; and 7. Ben I. Friedman, M.D.

To the extent that these individual defendants may have some legitimate claim for

a defense and/or indemnity from the City of Cincinnati, the City of Cincinnati

demands a defense and/or indemnity on their behalf from the University of

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Cincinnati, its Board of Trustees and the Ohio Board of Regents. Copies of the demand letters from those individuals are enclosed for your review.

The City of Cincinnati's demand is based in part on a review of the lawsuits and information which indicates that all of the claims a r i o~ut of a research project undertaken by employees and agents of the University of Cincinnati, Board of

Directors pursuant to a Negotiated Contract, effective January 1, 1960 with the United States Government. (Contract No. DA-49-146-Xz-029) to which the City of Cincinnati was not a party.

Also,the 1976 Agreement whereby the University of Cincinnati was converted to a

- state university, (a copy of which is enclosed) the Ohio Board of Regents acting on

behalf of the University of Cincinnati (state university) and the Board of Trusteesof the University of Cincinnati (state university) agreed to defend and indemnify the former Board of Directors of the University of Cincinnati *om lawsuits of this type.

I specifically refer to Section 2 of said Agreement which was executed on April 9, 1976. The pertinent language from the Agreement is as follows:

"Section2. Assumptions of Obligations. Subject to the termsand

conditions of this Agreement, and to the exceptions and

exclusions provided in this section, the Trustees shall, and do

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hereby, as of the Conversion Date, specifically assume and agree to perform and pay when due all debts, liabilities and obligations,

Dr. Owens, Dr. Steger and Chancellor Hairston

April 1,1994 Page 3

contractual or otherwise, of the Directors, of everykind, character or description, whether accrued, absolute, contingent or otherwise, as the same exist on the Conversion Date, but only ta the extent such are or would be enforceable debts, liabilities and obligations of the Directors and may lawfully be assumed,

performed and paid by the Trustees; ... "

. It is clear the Ohio Board of Regents, the University of Cincinnati (stateuniversity)

and the University of Cinchhati (state university) Board of Trustees did ".,

specifically assume and agree to perform and pay when due all debts, liabilities, and

obligations, contractual or otherwise, of the Directors, of every kind, character or description, whether accrued, absolute, contingent or otherwise, as the same exist on

the Conversion Date, . . .'I

Based upon the express assumption of such obligations by the Board of Trustees of

University of Cincinnati, the City of Cincinnati further demands that the University of Cincinnati, pursuant to U.S. Army Contract No. DA-49-146-XZ-029, make a demand forthwith upon the Department of Defense,the Department of the Army,the Defense Atomic Support Agency, its successorthe DefenseNuclear Agency and/or the otherwise appropriate federal agency or officer for a defense and indemnification of the University of Cincinnati andor the City of Cincinnati and/or individual defendants in the above-captioned lawsuits.

A copy of the contract between the University of:Cincinnati and the Defense Atomic Support Agency which gives rise to this obligation on the part of the United States of America and its departments andor agencies is enclosed herein.

- Specifically I refer to page 46 of said contract which is entitled INSURANCE-

LIABILITY TO THIRD PERSONS. Subsection (c) on page 46 under INSURANCELIABILITY TO THIRD PERSONS reads in pertinent part:

. . . 11 (c) the Contractor (University of Cincinnati) shall be

r e i m b m d . . . . (ii) for liabilities to third persons for the loss or damage to property . . . or for death or bodily injury, not

compensated by insurance or otherwise, arising out of the

performance of thia contract whether or not caused by the

negligence of the Contractor, agents, servants or employees,

provided such liabilities are represented by h a l judgments or by

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.." settlementsapproved in writingby the Government and expenses

incidental to such liabilities.

Dr.Owens, Dr.Steger and Chancellor Hairston

April 1,1994 Page 4

Subsection (d) on page 47 requires the Contractor (University of Cincinnati) to give the Gwernment or ita representatives immediate notice of any suit or action filed against the Contractor arising out of the performance of this contract.

This letter will serve to give you notice that you must forthwith contact the Government and notify it of these lawsuits and demand a defense and

indemnification.

Furthermore, by Ordinance No. 273-1978passed by the City of Cincinnati and Council approved by the Board of Trusteesof University of Cincinnati, the University of Cincinnati Board of Trustees is required "to protect, defend, indemnify and save harmless the City of Cincinnati and/or its employees" in the above-captioned

consolidated cases.

The ordinance is as foilows:

The trustees shallprotect, defend, indemnify and save the city of

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Cincinnati, ita agents and employees, harmleas from and against any and all loss, cost, expense, or damage with respect to any

claim, liability, demand, controversy, action or cause of action, at

law, equity, or administrative proceedings arising from any and

all acts or omissions of the trustees, its agents, employees,

licensees or invitees including but not limited to acts of

malpractice, except to the extent that such loss,cost, expense or

damage is related to any.control of the premises retained by the

city of Cincinnati under the terms of this agreement or the lease

referred to in Section 2043. (See 8204-17C.M.C.)

- Your prompt attention to this matter would be greatly appreciated since it is of the .

utmost importance to have legal counsel for the City of Cincinnati and the other

referenced individual defendants situated as soon as possible. Counsel for the City

of Cincinnati and the aforesaid parties should be secured immediately. Please copy

the undersigned with the notice and demand the University of Cincinnati Board of

Trustees makes upon the federal government.

Please advise us in writing within ten days of the receipt of this demand of your

intentions in regard to undertaking the City of Cincinnati's defense and your acknowledgement of the University of Cincinnati's obligation to indemnify the City of Cincinnati in this matter.

L. Further advise us within ten days of the receipt of thisdemand in writing as to your

Dr. Owens, Dr. Steger and Chancellor Hairstoh

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Page 5

intentions in regard to undertaking the defense of the referenced herein who have been named in the suit and your acknowledgement of the University of Cincinnati's obligation to indemnify those individuals. I will await your response. Thank you for your cooperation.

City ~

FDD/MCVlMSYlgec

cc: Sidney Wd,Esq.

TAFT. STETTINIUS & HOLLISTER

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WASWlNOTON. O.C. OPCICR ~ U l T I 4 0 0 - ~ 1 ~ I N D I A N A A V ~ N UW~.. N .

WA.*INOTONa.w - a aDm.C-.aauwea-awi

c u . aoa-s4?.a.aa

1800 STAR B A N K C E N T E R

425 W A L N U T STREET

CINCINNATI. OHIO 45202-3957

013-501 -2030 CA8LE: TAFTMOL TWX: mia-ami-aeaa

PAX: a-a-ani-oaae

WRITER'S DIPXCT L I n :

513-357-9313

March 15, 1994

Q-m

Fay D. Dupuis, Esq. city Solicitor The city of Cincinnati

801 Plum Street Cincinnati, Ohio 45202

Re: Shuff v. Saenger, et al.; Eager, et a l . , v. University of Cincinnati, et al.; Christy, et al. v. University of

-- Cincinnati, et a l . ; and Conyers V . University of

Cincinnati, et a l . Defense and Indemnity for Dr.

Euuene saenaer

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Dear Ms. Dupuis:

We represent Dr. Eugene L. Saenger in each of the above-

captioned cases, all of which have been filed recently in the United States District Court for the Southern District of Ohio.

In one of these cases, Eager v. The University of Cincinnati, the

City o f Cincinnati also has been named as a defendant. The

damages claims asserted in these four cases aggregate to more than $215,000,000. While we intend to vigorously defend br.

Saenger in these cases and firmly maintain that the claims

asserted by the plaintiffs are meritless, the cost of that

_ _ defense is likely to become extremely burdensome for Dr. Saenger.

Accordingly, I am forwarding copies of the complaints in each of

these cases and formally demanding that the City fulfill its

obligations under the Ohio Revised Code and applicable city

ordinances to reimburse Dr. Saenger for costs incurred by him in

defending the above cases and indemnify him in the unlikely event that damages are awarded against him in any of these cases.

You will note from a review of the enclosed complaints that

each is based upon events that are alleged to have occurred

between 1960 and 1972 and arise out of and in the course of Dr.

Saenger's duties as a City employee. While much of what is

alleged in the respective plaintiffs' complaints is patently

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inaccurate, each has correctly stated that, during the relevant period, Dr. Saenger was employed by the University of Cincinnati

as a Professor of Radiology and a physician with staff privileges

Fay D. Dupuis, Esq.

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March 15, 1994 Page 2

at Cincinnati General Hospital (the predecessor to the University of Cincinnati Hospital).

As you probably are aware, the University of Cincinnati did not become a State institution until 1977. During the pertinent 1960-72 period, both the University of Cincinnati and Cincinnati General Hospital were instrumentalities of the City of Cincinnati. During that time, the University and General Hospital were governed by a Board of Directors of the Municipal University. All or a majority of this Board were appointed by the Mayor of the City. In fact, the City's responsibility for medical practice performed at Cincinnati General Hospital was so clearly recognized that the City Solicitor regularly defended malpractice actions brought against Cincinnati General Hospital.

See Sears v. City of C i n c i n n a t i , 31 Ohio St. 2d 157 (1972); Hicks v. DeLaCruz, 52 Ohio St. 2d 71 (1977). Thus, both the University

of Cincinnati and Cincinnati General Hospital were instrumentalities of the City of Cincinnati during the relevant 1960-72 period, and accordingly, Dr. Saenger was an employee of the City during that time.

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AS a city employee, Dr. Saenger unequivocally is entitled to

reimbursement or his costs incurred in defending the above

lawsuits and indemnity in the unlikely event that damages are

awarded against him. The City's legal obligation to provide

defense and indemnity to Dr. Saenger arises out of Ohio Revised

Code 02744.07, among other provisions, which reads in pertinent

part:

( A ) ( l ) [A] political subdivision [the City]

provide for the defense of an emnlovee, in any state or

federal court, in any civil action or proceeding to

recover damages for injury, death, or loss to persons

or property allegedly caused by an act or omission of

the employee in connection with a governmental or

proprietary function if the act or omission occurred or

is alleged to have occurred while the employee was

acting in good faith and not manifestly outside the

scope of his employment or* *of*ficial responsibilities.

(2) [A] political subdivision -ifv

and

. . . . . . bold harmlesa an employee in the amount of any judgment

that is obtained against the employee in a state

or federal court

that is for damages for injury,

death, or loss to persons or property caused by an act

or omission in connection with a governmental or

proprietary function, if at the time of the action or

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omission the employee was acting in good faith and within the scope of his'employment or official

responsibility [emphasis added].

Fay D. Dupuis, Esq.

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March 15, 1994 Page 3

Moreover, the statutory defense and indemnity obligations imposed by R.C. 52744.07 apply to lawsuits such as these brought after 1985 (when 52744.07 was enacted) that arise out of conduct alleged to have occurred prior to 1985. See, e.g., Bachmayer v.

Toledo Board of Education, 44 Ohio App. 3d 105 (Lucas Cty. 1988); P a o l i s s o v. Edison Local Brd. of Educ., No. 90-5-36, 1992 Ohio

App. LEXIS 490 (Jefferson Cty. App. Feb. 5, 1992), copy attached. Payment of such defense costs and indemnity also is authorized by Municipal Code 5110-1.

In light of the above statutory obligations, we are hereby demanding on behalf of Dr. Saenger that the City recognize its obligation to pay Dr. Saenger's defense costs, by promptly beginning reimbursement of such costs, and acknowledge its duty to indemnity Dr. Saenger with respect to any potential damage awards that may arise out of the pending lawsuits. We look forward to your prompt response.

. RJP/JEB/bam

Encl

-- cc: Hon. Roxanne Qualls, Mayor hand delivered (w/encl.)

-- Mr. John Shirey, City Manager hand delivered (w/encl.) -- Mark Yurick, Esq., Asst. City Solicitor hand delivered

(w/encl. )

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