Gillispie v. City of Miami Twp.

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ROGER DEAN GILLISPIE, Plaintiff, v. THE CITY OF MIAMI TOWNSHIP, et al., Defendants.

No. 3:13-cv-416

United States District Court, S.D. Ohio, Western Division, Dayton

July 31, 2023

ENTRY AND ORDER DENYING PLAINTIFF'S MOTION TO BE JOINED AS A NECESSARY PARTY OR INTERVENE IN THE TOWNSHIP'S ACTION AGAINST MOORE WITHIN THIS ACTION (DOC. NO. 480)

THOMAS M. ROSE UNITED STATES DISTRICT JUDGE

Pending before the Court is Plaintiff's Motion to be Joined as a Necessary Party or Intervene in the Township's Action Against Moore within this Action (“Motion”) (Doc No. 480), filed by Plaintiff Roger Dean Gillispie (“Gillispie”). Gillispie moves this Court to either: join him as a necessary party under Fed.R.Civ.P. 19 or, in the alternative, to allow him to intervene under Fed.R.Civ.P. 24 in Intervenor-Plaintiff Miami Township Board of Trustees' (“Township”) declaratory judgment action against Intervenor-Defendant Matthew Scott Moore (“Moore”). The declaratory judgment action involves whether the Township has a duty to defend or indemnify Moore pursuant to Ohio Rev. Code § 2744.07 for claims made against him by Gillispie in the underlying action. (Doc. No. 480 at PageID 15578-79; Doc. No. 397.) The Township argues that Gillispie does not have a “substantial legal interest in th[e] declaratory action.” (Doc. No. 483 at PageID 15689.)

For the reasons explained below, the Court DENIES the Motion.

I. BACKGROUND

The Court assumes that the parties are familiar with the factual background of this case and will not delve into its extensive history. The Court will briefly address the procedural posture of this case as it is relevant to this Motion.

On September 23, 2022, the Township filed its Motion to Intervene. (Doc. No. 370.) In the Motion to Intervene, the Township argued that it had a “substantial legal interest in any determination as to whether Moore was not acting in good faith or was acting outside of the scope of his employment or official responsibilities” at the relevant time(s) in the underlying action. (Id. at PageID 12701.) The Township requested “limited participation in the trial of this matter.” (Id. at PageID 12694.) This was because Ohio Rev Code § 2744.01 and § 2744.07 could require the Township to pay the costs of Moore's defense and indemnify him for any compensatory damages awarded against him. (Id. at PageID 12701.) The Township further argued that § 2744.07 provides exceptions that would relieve the Township of its duties if Moore did not act in good faith or if he was acting outside the scope of his employment or official responsibilities at the relevant time(s) in the underlying action. (Id.) The Township argued that the questions of good faith and scope of employment aligned directly with Gillispie's claims against Moore that would be addressed at trial. (Id. at PageID 12701-702.)

On October 11, 2022, the Court granted the Township's Motion to Intervene, with certain parameters. (Doc. No. 392.) Aligning with its request (Doc. No. 370 at PageID 1267), the Township's participation at trial was limited to questioning, argument, and submitting proposed jury instructions and interrogatories on the discrete issues of good faith and scope of employment consistent with Ohio Rev. Code § 2744.07. (Doc. No. 392 at PageID 13693-94.) Gillispie and Moore were also allowed to question, argue, and submit proposed jury instructions on the issues of good faith and scope of employment. (Id. at PageID 13694.)

On October 13, 2022, in compliance with the Court's order (Doc. No. 392 at PageID 13693) and Rule 24(c), the Township filed Miami Township Board of Trustees' Intervenor Complaint for Declaratory Judgment and Relief. (Doc. No. 397.) In that Intervenor Complaint, the Township seeks a declaratory judgment that it does not owe a duty to defend or indemnify Moore for claims made against him in Gillispie's Amended Complaint. (Id. at PageID 13763.)

Trial began on November 7, 2022 and concluded on November 21, 2022. (Doc. Nos. 455, 474.) At the conclusion of the trial, the jury found for Gillispie on his two remaining claims against Moore and awarded Gillispie $45,000,000. (Doc. No. 475 at PageID 15561-63.) The jury further found that it had not been proven that Moore was not acting in good faith, was acting manifestly outside the scope of his employment or official responsibilities, or was not acting within the scope of his employment or official responsibilities. (Id. at PageID 15564-65.)

On December 7, 2022, Gillispie filed the present Motion. (Doc. No. 480.) The Township filed its opposition on December 23, 2022 (Doc. No. 483), and Gillispie filed his reply on January 6, 2023 (Doc. No. 487). Moore did not file any response to the Motion. The Motion is fully briefed and ripe for review and decision.

II. ANALYSIS

Gillispie argues that, under both Rule 19 and Rule 24, he has an interest in protecting the verdict. (Doc. No. 480 at PageID 15580.) Moreover, Gillsipie argues that Moore's testimony at trial may prevent him from making the types of arguments necessary to protect the verdict. (Id. at PageID 15581-82.) For instance, Gillispie argues that Moore denies any wrongdoing and that may make it difficult for him to fully embrace the jury verdict in order to defend it. (Id.) Finally, Gillispie argues that Ayers v. Cleveland, 2020-Ohio-1047, 156 N.E.3d 848 (Ohio 2020) presents no bar to his ability to be joined under Rule 19 or intervene under Rule 24. (Id. at PageID15584-85.)

a. Ayers v. Cleveland

Gillispie and the Township both raise the specter of Ayers, which hangs over the analysis of whether Gillispie has a legal interest in the Township's declaratory judgment action within the meaning of Rule 19 and Rule 24.

In Ayers, the plaintiff had been released from prison pursuant to a habeas corpus action and then filed a civil rights lawsuit against the city of Cleveland and the detectives who had been involved in his case. Ayers, 2020-Ohio-1047 at ¶ 2. The district court dismissed the claims against the city of Cleveland, but the plaintiff ultimately obtained a jury verdict against the two officers. Id. at ¶ 3. After the verdict, one of the detectives passed away and the other filed chapter 7 bankruptcy, but neither detective sought to enforce their right to indemnification. Id. at ¶ 4.

The plaintiff filed a second action against the city of Cleveland, alleging claims of statutory indemnification under Ohio Rev. Code § 2744.07(A)(2), and the case ultimately made its way to the Ohio Supreme Court. Id. at ¶¶ 6-10. The Ohio Supreme Court held that the plain language of Section 2744.07(A)(2) requires a political subdivision to indemnify an employee for any judgment qualifying under the statute. Id. at ¶ 18. However, the court held that the statute “provides that a political subdivision ‘shall indemnify and hold harmless an employee.' Thus, the right of indemnification is personal to the employee.” Id. at ¶ 21 (emphasis in original). The Ohio Supreme Court further held that, “[b]ased on the unambiguous language of the statute, which serves only to indemnify an employee and does not vest any rights in third parties connected to the employee, we conclude that R.C. 2744.07(A)(2) does not permit a judgment creditor to proceed directly against an indemnitor.” Id.

The court declined to address the issue of third-party standing because it was not properly before the court. Id. at ¶ 27. However, Ohio's Second District Court of Appeals has since weighed in on this very issue. In OTARMA v. Miami Township, 2023-Ohio-733 (Ohio Ct. App. 2023), the plaintiff, “a political-subdivision risk pool providing liability coverage to Ohio townships,” sought a declaratory judgment declaring that it had no duty to defend or indemnify the Township in relation to Gillispie's underlying federal action. OTARMA, 2023-Ohio-733 at ¶¶ 4-5. In evaluating the plaintiff's obligations to the Township, the court held:

Moreover, the Ohio Supreme Court has made clear that the statutory right to indemnification is a personal right held by the employee, not a judgment creditor. For that reason, a judgment creditor such as Gillispie may not assert an employee's indemnification right in an action directly against a political subdivision.

Id. at ¶ 25 (citing Ayers, 2020-Ohio-1047).

Gillispie argues that Ayers does not block his joinder or intervention in the Township's declaratory judgment action. (Doc. No. 480 at PageID 15585.) Indeed, Gillispie argues that the case “confirms that it does not apply to block third-party standing.” (Id.) The Township, on the other hand, argues that Ayers makes clear an officer's “right to indemnification related to any judgment against an employee is personal to the employee and arises specifically out of the employer-employee relationship.” (Doc. No. 483 at PageID 15692-93.)

The Court agrees that Ayers limits who may bring a claim under Ohio Rev. Code § 2744.07 to the employee seeking to be indemnified by a political subdivision. It is apparent that Gillispie would not be able to bring a claim under the statute directly against Miami Township. Indeed Ayers makes clear that § 2744.07 “does not vest any rights in third parties connected to the employee....” Ayers, 2020-Ohio-1047 at ¶ 21. To go beyond this rationale and hold that Gillispie possessed the standing to assert and enforce Moore's indemnification rights as a third party would expand Ohio law beyond where it presently sits. It is not the province of this Federal Court to do so. Imperial Hotels Corp. v. Dore, 257 F.3d 615, 620 (6th Cir. 2001) (a federal court must apply the substantive law of Ohio “in accordance with the then-controlling decision of the highest court of the State”). Indeed, the holding of OTARMA demonstrates that the Court's interpretation of Ay...