08-1153Council File #
Green Sheet # 7
CITY OF
Presented by
RESOLUTION
NT,RAUL, MINNESOTA
0
1 WHEREAS, the settlement beriveen the City and Penn-America Insurance Company will result in a full,
2 final and complete settlement of the lawsuit brought by the City against Penn-America Insurance
3 Company; and the council having fully considered the same;
4
5 BE IT RESOLVED, that the City of St. Paul through the proper City officers is hereby authorized and
6 directed to accept into its funds the sum of $475,000 in full settlement of the action entitled City of St. Paul
7 v. Penn-America Insurance Company, United States District Court, File No. 04-885, DWF/SRN.
Requested by Department of:
Office ofCity Attorney
BY� �i�p��j-e�i�._-As'st. City Attorney
Approve,�l by the Office q�Financial Services _
g �-e� t, � �
Approved by City Attomey
By:
Date /�//�� Approved
Adoprion Certified by Co cil Secretary gy:
By: �
Approved r: Date �� U b
By:
Council
Adopted by Council:
� Green 8heet Green Sheet Green SheeYGreen Sheet Green Sheet Green Sheet �
D�`t 1�
)epartrnentlOffice/Council: Date Initiatetl:
CA — CityAttomey ,�� , Green Sheet NO: 3060857
Contact Person 8 Pho�e:
Louise Toscano Seeba
266$772
Musf Be on Courecil Agentla by (Date):
22
Type: RESOLUTION W!$
TRANSACTtON
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Assign
Number
For
Routing
Order
1 �L7tvAttarnev II DeDarhmentDirector I
2 ancial Scrvices ce Ntima�val Services �
E-Document Required: N
DocumentConWct:
Contact Phone:
ToWI # oF Signature Pages _(Clip NI locations for S ign a t u re)
Action Requested:
The CAO recommends approval of a resolurion auihorizing acceptance of payment in "The City of SY. Paul v. Penn-America
Inswance Company", United States Dishict Court, File No. 04-885, DWF/SRN in the amount of $475,000.
Recommendafions: Approve (A) or Reject (R):
Pianning Commission
CIB Committee
Civil Service Cwnmission
Personal Service Contracts Must Mswer the Foliawtng Questions:
'I. Has this person/firtn ever worked untler a contrad for this department?
Yes No
2. Has this personlfirtn ever been a city employee?
Yes No
3. Does this person/firtn possess a skill not normally possessetl by any
curcent ciry employee? -
Yes No
Explain all yes answers on separate sheet and attach to green sheet.
Initiating Problem, Issues, Opportunity {VIVho, What, When, Where, Why):
The City iniriated this acrion against Penn-America Snswance Company in 2004 to recover its attorney's fees and indemnification
from Pean-America in an amount that could not be detertnined until the Town Square Realty, LLC v. City of St. Paul lawsuit was
completed. On July 22, 2005, the Court found that the Ciry was en6tled to its attomey's fees, but a quesrion of fact remained
regarding whether or not Penn-America had a dury to indemnify the City. In August, 2008, the City settled the Town Square Realry
lawsuit for $150,000. The City continued to pursue its insurance coverage from Penn America Insurance Company. On October 14,
2008, Penn-America Insurance Company agreed to pay the City of St. Paui a fotal of $475,000 for its attomey's fees incurred and
indemnification expended
Advanfages If Approved:
By accepting this settlement the City will recover 9b of its out-of-pocket attomey's fees, costs, and indemnificafion expended.
DisadvanWges If Approvetl:
None.
QisadvanWges If Not Approved:
If not approved, the City will continue to litigate this lawsuit and incur additional attorney's fees. If this case proceeds to trial and
then to the 8th Circuit Court of Appeals, it would be unlikely that the Ciry would receive as much as it does by way of this settlement.
TotaiAmountof �475,000.00
Transac
Funding so8f�'e a 09070-0511
Financial informallon:
(Explain)
CostlRevenue Budgeted: �`
AMivity Number:
October 15, 2008 11:59 AM Page 1