Number
031131
Version
ORIGINAL
Reference
Sponsor
THE CHAIR
Title
Resolution authorizing the Department of City Development, working with the City Attorney, to retain outside counsel to represent the City and its affiliated departments and agencies in the investigation of available insurance coverage for monies expended by the City in performing environmental testing, investigation and remediation activities and to represent the City and its affiliated departments and agencies in litigation and other efforts to recover monies previously expended in conjunction with such activities. (DCD)
Analysis
The Wisconsin Supreme Court, in Johnson Controls, Inc. v. Employers Insurance of Wausau, 2003 WI 108, 264 Wis.2d 60, 665 N.W.2d 257, has recently determined that costs expended for the performance of environmental testing, investigation and remediation activities may be recovered by insureds and other parties covered by pre-1986 comprehensive general liability ("CGL") policies. This resolution will authorize the Department of City Development and the City Attorney to develop and disseminate a Request for Proposals and, based upon responses to that Request, to engage outside counsel for the following purposes: (a) to investigate available pre-1986 CGL and other insurance coverage that may be available to the City and its affiliated departments and agencies to defray costs expended for environmental testing, investigation and remediation activities; and (b) to represent the City and its affiliated departments and agencies in litigation and other efforts to recover funds from insurance carriers to defray those costs. Given that the outside counsel so retained will be engaged on a purely contingency basis, this resolution will have no fiscal impact, apart from the costs of preparation and dissemination of the Request for Proposals.
Body
Whereas, The Wisconsin Supreme Court in the case of Johnson Controls, Inc. v. Employers Insurance of Wausau, 2003 WI 108, 264 Wis.2d 60, 665 N.W.2d 257, has determined that costs expended for the performance of environmental testing, investigation and remediation activities may be recoverable under pre-1986 comprehensive general liability ("CGL") insurance policies; and
Whereas, The City of Milwaukee ("City") and its affiliated departments and agencies regularly and frequently engage in the performance of environmental testing, investigation and remediation activities, both with respect to contaminated or potentially contaminated real estate and in other contexts; and
Whereas, The costs expended for such purposes are frequently very significant, and, in the case of the City and its affiliated departments and agencies, have aggregated over the years into the millions of dollars; and
Whereas, It is possible that the City or its affiliated departments and agencies may have come within the scope of coverage of pre-1986 CGL insurance policies as referenced in the Johnson Controls decision, and thus may be in a position to assert claims against insurance carriers that issued those policies for recovery of funds to defray expenses incurred in the performance of environmental testing, investigation and remediation activities; and
Whereas, It is not possible to ascertain whether, or to what extent, such insurance coverage may be available to the City or its affiliated departments and agencies without engaging in an extended investigation as to the sources, nature and potential extent of such coverage; and
Whereas, If potential coverage is uncovered as a consequence of such an investigation, litigation or other efforts to assert claims against affected insurance carriers and to recover proceeds from those insurance carriers may become necessary; and
Whereas, The Department of City Development and the City Attorney have determined that it is in the best interests of the City to have these investigatory claims and litigation activities performed by outside counsel, working on a purely contingency basis; and
Whereas, The Department of City Development and the City Attorney concur that it will be necessary to disseminate a Request for Proposals to obtain responses from potential candidates for this work, to interview those candidates and to select an appropriate outside counsel for this purpose as a consequence of these selection procedures; and
Whereas, Section 304-23 of the Milwaukee Code of Ordinances requires Common Council authorization to retain outside counsel in an engagement pursuant to a written agreement; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee, that the Department of City Development and the City Attorney are authorized and directed to disseminate a Request for Proposals to identify outside counsel to represent the City and its affiliated departments and agencies in conjunction with those activities specified within the scope of this resolution; and, be it
Further Resolved, That the Department of City Development and the City Attorney are authorized and directed to engage outside counsel to represent the City and its affiliated departments and agencies in conjunction with those activities within the scope of this resolution, purely on a contingency basis; and, be it
Further Resolved, That such engagement shall be pursuant to a written agreement entered into by the City Attorney on behalf of the City.
Requestor
Department of City Development
Drafter
CA:SSM:mfh
11/25/03/B