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Attorney General's Opinion

Attorney General, Richard Blumenthal

July 5, 2002

Michael Pace, Chairman
Connecticut Resources Recovery Authority
100 Constitution Plaza
Hartford, CT 06103-1722

RE: Separation Agreement Between CRRA and Robert E. Wright

Dear Chairman Page:

This letter responds to the June 25, 2002 letter from Ann Stravalle-Schmidt, CRRA Director of Legal Services, seeking our opinion on several questions concerning the Separation Agreement between CRRA and former CRRA President Robert E. Wright that was approved by the previous CRRA Board of Directors. In particular, Stravalle-Schmidt asked: (1) whether the previous Board had the authority to enter into the agreement; (2) whether the language of ¶7 of the agreement — the provision concerning indemnification and reimbursement for legal expenses — was legally permissible; and (3) whether ¶7 of the agreement is enforceable against CRRA.

In sum, our opinion is as follows: (1) the previous Board acted ultra vires in approving ¶7 of the agreement to the extent ¶7 of the agreement requires CRRA to indemnify and pay the legal fees and costs associated with criminal matters that may involve Mr. Wright and (2) ¶7 is not legally enforceable against CRRA to the extent it allows for indemnification and the payment of legal fees and costs that may be related to possible criminal law violations and investigations. The reasons for our conclusions are set forth below.

First, the CRRA Board, like all other public instrumentalities, may only act within the specific authority granted to it by the General Assembly. Wilson v. Town of West Haven, 142 Conn. 646, 653 (1955). In this regard, there are two statutory provisions that deal expressly with the indemnification and payment of legal fees and costs for directors, officers and employees of CRRA in lawsuits that may be filed against them arising from the performance of their duties. Under Conn. Gen. Stat. §1-125 directors, officers and employees of quasi-public agencies are indemnified in very specific circumstances:

"…The agency shall protect, save harmless and indemnify its directors, officers or employees from financial loss and expense, including legal fees and costs, if any, arising out of any claim, demand, suit or judgment by reason of alleged negligence or alleged deprivation of any person's civil rights or any other act or omission resulting in damage or injury, if the director, officer or employee is found to have been acting in the discharge of his or her duties or within the scope of his or her employment and such act or omission is found not to have been wanton, reckless, willful or malicious."

Conn. Gen. Stat. §1-125 (emphasis added). The particular statutes governing CRRA contain a similar provision relating to indemnification:

…[N]or shall any director, member or officer of the authority be personally liable for damage or injury, not wanton or willful, caused in the performance of his duties and within the scope of his employment or appointment as such director, member or officer.

Conn. Gen. Stat. §22a-261(m) (emphasis added).

Under these statutory provisions, CRRA does not have the authority to indemnify a director, member, officer or employee for expenses incurred in connection with criminal matters. Significantly, directors, officers, members and employees who engage in conduct that is wanton or willful, outside of the performance of the employee's duties or outside of the scope of employment -- as violations of the state's criminal laws certainly would be -- are not entitled to indemnification or payment of legal fees or costs. Indemnification and payment for legal representation in criminal matters are not provided for in the statutes relating to indemnification of CRRA's directors, officers, members and employees. In fact, the General Assembly has only authorized indemnification for the defense of criminal charges in very limited circumstances, such as in Conn. Gen. Stat. §53-39a concerning prosecution of police officers.1 Even in those circumstances, payment of legal fees for criminal matters is conditioned on the charges being dismissed or a finding of not guilty. In the absence of specific statutory authority, therefore, indemnification for expenses incurred regarding criminal matters is simply not available to CRRA's directors, members, officers and employees.2

Finally, we have also evaluated ¶7 of the Separation Agreement against Article IX of the CRRA Bylaws. The CRRA Bylaws do allow for indemnity and payment for legal representation in criminal matters if approved either by the directors by a written consent signed by a majority of those directors who were not parties to the action or by independent legal counsel selected by a consent in writing by a majority of those directors who were not parties to the action. However, those provisions of the Bylaws exceed the statutory authority granted by the General Statutes concerning indemnification for directors, officers, members, and employers of all quasi-public agencies, in general, and CRRA, in particular. Consequently, they are invalid.

For all of the foregoing reasons we have concluded that the CRRA Board lacked the authority to enter into ¶7 of the Separation Agreement to the extent ¶7 authorizes indemnification and the payment of legal fees and costs for criminal matters and that such indemnification and payment of legal fees and costs would be contrary to law. Therefore, ¶7 of the agreement is not enforceable against CRRA to the extent it authorizes indemnification and the payment of attorneys fees and costs related to possible criminal law violations and investigations. Because such payments under the provisions of ¶7 would be contrary to law, CRRA should immediately demand that Mr. Wright refund any moneys previously paid under ¶7 for such purposes. If you have further questions in regard to this matter do not hesitate to contact this office.

Very truly yours,

RICHARD BLUMENTHAL

1Conn. Gen. Stat. §53-39a (emphasis added) provides: "Whenever, in any prosecution of an officer of the Division of State Police within the Department of Public Safety, or a member of the Office of State Capitol Police or any person appointed under section 29-18 as a special policeman for the State Capitol building and grounds, the Legislative Office Building and parking garage and related structures and facilities, and other areas under the supervision and control of the Joint Committee on Legislative Management, or a local police department for a crime allegedly committed by such officer in the course of his duty as such, the charge is dismissed or the officer found not guilty, such officer shall be indemnified by his employing governmental unit for economic loss sustained by him as a result of such prosecution, including the payment of any legal fees necessarily incurred."

2In reaching the conclusion that ¶7 of the separation agreement provides Mr. Wright with benefits in excess of those authorized by statute, we are mindful that the law firm of Cummings & Lockwood previously provided CRRA with written advice that CRRA's "commitment in the Separation Agreement is no greater than what it would otherwise be obligated by law to provide…" To the extent the separation Agreement provides for payment of legal fees and costs for criminal matters, the conclusion reached by Cummings & Lockwood is erroneous.

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