Indemnification

AG Position A state entity may not agree to an indemnification provision that is: (1) a contingent liability; (2) not merely incidental to the transaction; and (3) without legislative authorization. See Reimer v. Town of Holyoke, 27 P.2d 1032 (1933) en banc.; Johnson v. McDonald, 80 P.2d 1017 (1935); Montgomery v. City and County of Denver, 80 P.2d 434 (1938); City of Trinidad v. Haxby, 315 P.2d 204 (1957). All based on Constitutional prohibition on debt

AG Position An indemnification clause which results in the University accepting liability for the intentional acts of its employees or agents waives governmental immunity.

Legislative Indemnities § 35-50-114. Indemnification of livestock owners To meet the emergency caused by any outbreak of contagious or infectious disease, the governor may cause to be issued the state’s certificate of indebtedness with which to indemnify owners of property destroyed to pay the necessary costs and expense of exterminating and eradicating such contagion or infection.   § 29-5-111. Liability of peace officers Notwithstanding the doctrines of sovereign immunity and respondeat superior, a city, town, county, or city and county or other political subdivision of the state or a state institution of higher education employing peace officers in accordance with article 7.5 of title 24, C.R.S., shall indemnify its paid peace officers and reserve officers.

Legislative Indemnities  § 29-1-204.2. Establishment of separate governmental entity to develop water resources, systems, facilities, and drainage facilities The general powers of such entity shall include the following powers. . . To justly indemnify property owners or others affected for any losses or damages incurred, including reasonable attorney fees, or that may subsequently be caused by or which result from actions of such corporations.   § 24-32-2303. State liability Permission is given for suits against the state for recovery of compensation in that behalf, and for the indemnification of any person appointed and regularly enrolled as a civilian defense worker while actually engaged in civil defense duties or as a member of any agency of the state or political subdivision thereof engaged in civilian defense activity under the “Colorado Disaster Emergency Act of 1992.”

Legislative Indemnities § 24-30-1510. Risk management fund--creation--authorized and unauthorized payments State fund may . . . pay liability claims and expenses related thereto when a state agency has contracted to defend and hold harmless the owner of property leased to the state agency for a state purpose if such contract limits the state’s obligation to claims arising from alleged negligent acts or omissions of the state agency and of its public employees which occurred or are alleged to have occurred during the performance of their duties and within the scope of their employment, except where such acts or omissions are willful and wanton.

Legislative Indemnities If the Constitution prohibits indemnity, how can the legislature allow it by statute? Public Purpose Exception Applies to Anti Donation, Anti Debt, Anti Appropriation Clauses DOES NOT APPLY to TABOR, Spending Clause

Public Purpose Exception The test is whether the power, if exercised, will promote the general objects and purposes of the municipality, and of this the legislature is the judge in the first instance; and unless it clearly appears that some constitutional provision has been infringed, the law must be upheld.

AG Opinion on TUIC I conclude that the Regents may legally find that the proposed conveyance falls under the public purpose exception . . . . The purpose of the conveyance is to allow TUIC's assets to be put to more productive and lucrative use for the benefit of the educational mission of the University, promote higher education, create employment opportunities for the citizens of the State of Colorado, and generate revenues for the University.

23-5-106. Authority of governing boards - contracts of indemnity. (4)  The governing board of a state institution of higher education that is designated as an enterprise pursuant to section 23-5-101.7 may contract to indemnify and hold harmless a contractor if the governing board determines that the contract serves a valid public purpose and any risks to the institution that may arise from entering into the contract are sufficiently limited and outweighed by the benefits of the contract. Notwithstanding any other provision of law to the contrary, a liability claim or expense that arises from a contract to indemnify or hold harmless entered into by a governing board pursuant to this subsection (4) shall not be payable from the [state] risk management fund

4.3 LICENSEE shall at all times during the term of this License Agreement and thereafter, indemnify, defend and hold PSRF, UNIVERSITY, their trustees, directors, officers, employees and affiliates, harmless against all claims, proceedings, demands and liabilities of any kind whatsoever, including legal expenses and reasonable attorneys' fees, arising out of the death of or injury to any person or persons or out of any damage to property, resulting from LICENSEE’s production, manufacture, sale, use, lease, consumption or advertisement of the PATENT RIGHTS or SOFTWARE or arising from any obligation of LICENSEE hereunder. NOTWITHSTANDING THIS ARTICLE 4.3, WHEN LICENSEE IS PROHIBITED BY LAW FROM PROVIDING INDEMNIFICATION, THE INDEMNIFICATION REQUIREMENTS SPECIFIED ABOVE SHALL NOT APPLY TO RECIPIENT

11.3. Subject to the limits and without waiving any immunities provided under applicable law (including constitutional provisions, statutes and case law) regarding the status, powers and authority of the Institution or the Institution’s principal(s), Institution shall indemnify, hold harmless and defend Sponsor, its directors, officers, employees and agents, (“Sponsor’s Indemnitees”) from and against only those third party Claims to the extent directly attributable to Institution’s negligence in its conduct of the Study.

It is NOT a debt Given the nature of this transaction and the university’s obligations, the likelihood of a contingency that would result in a university expenditure to indemnify is so remote, it cannot fairly be said to be reducible to a sum certain and is merely incidental to this contract.