Municipal Insurance Collective Won’t Cover Adelanto’s Herrera & Elliot Suit Liability

The sheer number of lawsuits filed against the City of Adelanto by its former and current employees taken together with the poor prospect of the city prevailing in the vast majority of those suits so unnerved the collective of municipalities and public agencies that have banded together to insure themselves against employee-related liability that in November the board of directors of that cooperative acted to revoke Adelanto’s membership in the pool.
A substantial number, indeed a majority, of those suits stem from the terminations of city employees who objected to both the accelerated pace of processing and the suspension of rules and city codes governing the permitting and licensing of commercial-cannabis operations in the city. That policy was championed by the then-controlling majority of the city council, which consisted of then-Mayor Rich Kerr and then-councilmen Jermaine Wright and John Woodard, sometimes augmented with the votes and support of then-councilman Charles Glasper.
In short, medium or slightly longer order following the clean sweep at the polls in the November 2014 Adelanto municipal election in which then-Mayor Cari Thomas and councilmen Steve Baisden and Charles Valvo were displaced, respectively by Kerr, Woodard and Glasper, former City Manager Jim Hart, former City Engineer/Public Works Director/interim City Manager Tom Thornton, Senior Management Analyst Mike Borja, Conservation Specialist Belen Cordero and Public Works Superintendent Nan Moore, former City Clerk/City Manager Cindy Herrera, former City Manager Gabriel Elliott, former City Attorney Todd Litfin, former City Attorney Julia Sylva, former City Attorney Curtis Wright, former interim City Manager Brad Letner, former contract City Engineer Wilson So; former Assistant City Engineer Aaron Mower; former Senior Planner Mark De Manincor; former information technology division employees Ben Pina, Ibriham Abudluld and Adam Watkins, and a former public works employee, Jose Figueroa, left of their own volition, were forced or persuaded to leave or were fired. Their firings resulted in Borja, Moore, Cordero, De Manincor, Pina, Watkins, Abudluld, Figueroa, Elliott and Herrera filing suit against the city. The shabby treatment accorded city code enforcement officers Steve Peltier, Roman Edward De La Torre, Apolonio Gutierrez, Amber Tisdale, and Gregory Stephen Watkins has pushed them to the brink of suing the city, though they have yet to do so.
The City of Adelanto belongs to a municipal self-insurance pool comprised of various public agencies providing employment liability coverage for its members and managed by the Employment Risk Management Authority. On November 5, 2018, the board of directors of the Employment Risk Management Authority voted to terminate Adelanto’s status as a member of the Employment Risk Management Authority effective July 1, 2019. The Employment Risk Management Authority Board made this decision because of significant concerns regarding the city’s governance, risk management practices, the adequacy of training, claims history and employment practices. Additionally, the Employment Risk Management Authority Board informed the city that it would not make disbursements from the pool to cover Adelanto’s liability relating to the lawsuits filed against it by Herrera, whose 31 years with the city made her the longest serving employee in city history, and Elliott. The city appealed the collective’s refusal to cover the cost of the city’s potential or anticipated losses as a consequence of the Elliott and Herrera suits.
On January 10, 2019, the city requested reconsideration of the Employment Risk Management Authority’s decision to terminate its membership as a member of the collective. In response, the board of directors agreed to reconsider its decision to terminate Adelanto’s participation as a member in the pool if the city entered into, and met the terms stipulated in, a performance improvement plan.
Under the terms of the plan, Employment Risk Management Authority staff are to meet with the city manager to discuss the terms of the plan prior to consideration by the Employment Risk Management Authority Board of Directors, and all council members and the city manager are required to complete specific training on council relations regarding the scope and limits of public official authority no later than 30 days after adoption of the plan. All council members and the city manager are required to complete specific training on preventing discrimination, harassment and retaliation as identified by the Employment Risk Management Authority no later than 30 days after adoption of the plan.
Under the plan, the city manager is required to retain and actively partner with an adviser via the League of California Cities Senior Advisor program within 30 days of the agreement going into effect, and all city management staff members are required to complete “Management 101″ training as identified by the Employment Risk Management Authority no later than 60 days after adoption of the plan.
The city is to retain an Employment Risk Management Authority-recommended employment attorney from the Employment Risk Management Authority defense panel to provide the city ongoing advice and counsel on any/all personnel matters that have the potential to become an Employment Risk Management Authority claim. Those personnel matters include termination, lay-off, job/position elimination, demotion, transfer, significant discipline, administrative leave, Americans With disabilities Act/religion interactive process communication, and personnel investigation. The plan requires that the city seek advice and counsel services before the city takes personnel action. If the city wants to disregard any specific advice and counsel recommendation, it is required to first confer with the Employment Risk Management Authority’s lLitigation manager prior to taking the particular personnel action.
The city manager is required to to meet with Employment Risk Management Authority staff telephonically no later than 30 days after the city council’s adoption of the plan to establish timelines for completion of identified actions in the plan prior to June 11, 2019, and the city manager is required to meet with the Employment Risk Management Authority staff telephonically every 30 days in order to review the status and progress.
Moreover, the city is required under the terms of the plan to withdraw and dismiss coverage appeals to the Employment Risk Management Authority Board of Directors regarding the suits brought against the City of Adelanto by Elliott and Herrera.
Meeting a further requirement that the city council accept the terms of the plan by resolution no later than 30 days following adoption of the plan by the Employment Risk Management Authority Board of Directors, the city council did just that on March 5, voting, during a special meeting called to discuss the city’s deteriorating ability to secure indemnification and other insurance and liability issues, to enter into the four-month plan dictated to it by the Employment Risk Management Authority Board of Directors.
“Should the city’s membership in the insurance poll be canceled, it may adversely affect the city’s ability to participate in another insurance pool,” a staff report dated March 5 authored by City Attorney Victor Ponto forwarded to the city council by then-Acting City Manager Socorro Cisneros states. “The city could acquire insurance directly from insurance carriers, bu the cost may be prohibitive with high deductibles. If the city becomes self-insured without belonging to an insurance pool, all claims will have to be paid out of the general fund reserves.”
A host of policies initiated under the direction of the city council led by Kerr and dominated by the Kerr/Wright/Woodard troika have resulted in legal challenges that have proven costly to the city.
Initial success the city had in having the suits filed against it in September 2016 by Cordero, Moore and Borja alleging the creation of a hostile work environment, wrongful termination and retaliation dismissed in San Bernardino County Superior Court on the basis of an argument that the Kerr, Wright and Woodard were merely exercising their authority and First Amendment free speech rights was reversed by the Fourth District Court, which ruled unanimously that the cases had to be reinstated.
During the closed session of the specially-called March 5 meeting, the city settled another lawsuit against the city, one filed against it by Main Street California, LLC, the owners of the now-defunct High Desert Mavericks baseball team, three years ago.
The city agreed to pay Main Street California $3.8 million to bring to a close the litigation that was initiated against the city in January 2016.
In 2012, the city entered into a $1 annual lease with Main Street California to allow the Mavericks, who had been based in Adelanto since 1991 to continue to use the stadium as their home field. City officials at that time believed the deal was justifiable in that the Mavericks would draw crowds from outside Adelanto into the city and serve as a boost to the local economy. The facility was built by the City of Adelanto in 1990 and 1991 at a cost of $6.5 million, and opened as Mavericks Stadium on April 23, 1991 to accommodate the move of what had formerly been the Red Wave from Riverside. In 2007, Stater Bros. purchased naming rights for the venue, and it became known as Heritage Field at Stater Bros. Stadium. In November 2010, Main Street California purchased the team and wangled the $1 per year lease in 2012 by threatening to remove the ball club to Chico.
More than three years later, in 2015, the City of Adelanto’s finance division undertook a study of the city’s subsidization of businesses within the city. Even before that report was finalized and filed at the end of January 2016, the tentative findings contained within it brought into focus that the $1 annual contract with Main Street California, LLC for the stadium was costing the city a lot of money.
Based on those tentative findings, the city council on January 13, 2016 voted unanimously to void the agreement for the Mavericks to use the city-owned stadium. In making that vote, city officials asserted, the three-and-half-year old deal violated the state constitution in that the lease served no public purpose. Thus, they said, the arrangement was a “gift of public funds.”
Less than two weeks later the subsidization report was released, showing the city had subsidized the High Desert Mavericks by roughly $600,000 per year – more than $1.8 million since 2012. In breaking down costs the city had sustained as a consequence of the agreement that had been terminated, the city maintained it had covered an estimated $675,938 of the team’s rent costs, $486,635 for city personnel in support of the stadium operation, $157,500 in janitorial fees, $46,521 for insurance, $14,000 in parking fees, $229,688 for utilities and another $200,000 in miscellaneous costs including catering.
Main Street California countered that it was the city that had cost the ball club money.
On January 29, 2016 the Mavericks went to court, filing suit to force arbitration with the city. Two-and-a-half weeks later, on February 16, Main Street California filed another suit against Adelanto for breach of contract. In its suits, Main Street did not address the city’s contention that the facility use contract does not serve a public purpose or that the arrangement harmed taxpayers. Rather, it alleged the city’s action was damaging to the Maverick’s fans, players, charitable organizations, the Adelanto economy and the California League.
The Mavericks were able to continue for the 2016 season at Heritage Field. Nonetheless, on August 22, 2016, the California League announced the Mavericks would not return for the 2017 season and would cease operations. The team went out with a bang. Their final game ever played, on September 17, 2016, was a 7-4 win at home over the Visalia Rawhide in the California League 2016 Championship. After that victory, the team trashed its locker room, wreaking what the city said was $10,000 in damage.
Subsequently, the Yardbirds of the start-up Pecos League made their home at the stadium.
Main Street pressed forward with its litigation, claiming it was owed close to $11 million by the city.
As announced this week, the city will pay out $1.5 million to Main Street California from its general fund immediately, and will fork over $2.3 million more in 24 monthly installments of $95,800 each.
Mark Gutglueck

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