Action Alameda News has learned that, despite coverage through the California Joint Powers Risk Management Authority, (CJPRMA) the City of Alameda is still potentially on the hook for $2 million in four employment related lawsuits. This is due to a $500,000 “retained limit” amount in the City’s coverage through the authority. Should former firefighter Ronald Vanderheiden, former Alameda Fire Chief David Kapler, former Interim City Manager Ann Marie Gallant, and former City Attorney Teresa Highsmith succeed in their employment-related cases against the City, the total the City would have to pay out before the CJPRMA steps in would be $2 million.
Officials at the CJPRMA confirmed that the $500,000 retained limit amount, stated in the declaration of coverage provided to the City of Alameda, functions like a deductible on an individual’s home or car insurance policy. Action Alameda News has obtained copies of the declaration of coverage, the CJPRMA Memorandum of Coverage, and other documents pertaining to the City of Alameda’s risk coverage through the Authority. The declaration of coverage states that the limit of coverage is “$40,000,000, subject to a retained limit of $500,000, ultimate net loss, for each occurrence as defined in the Memorandum of Coverage.” (There is an $8 million limit on employment practices related liability.)
In practical terms, this means that the City would have to pay out $500,000 of the $680,000 judgment against the City in favor of former firefighter Ronald Vanderheiden; the CJPRMA would pay the balance, or $180,000. Sources have indicated to Action Alameda News that the City of Alameda has appealed the judgment in the Vanderheiden case, but the City has not yet responded to a public records request seeking copies of the appeal brief.
Earlier this year, former Fire Chief David Kapler filed a $4 million wrongful-termination lawsuit against the City of Alameda. Both Highsmith and Gallant filed wrongful-termination suits as well. The City pays hundreds of thousands of dollars per year into the risk pool to maintain coverage.