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July 27, 2003 Page 4 counsel, reimburse the city, town or county officer or employee for any costs and reasonable attorneys' fees incurred by the person to defend charges of a criminal nature brought against the person that arose out of the reasonable and lawful performance of duties for the city, town or county. Subd. 2. When judge must approve. If less than a quorum of the governing body is disinterested, the reimbursement under subd. 1 shall be approved by a judge of the district court. In September of2002, Roseville passed Ordinance No. 1269, adopting Chapter 1052 of the Roseville City Code, covering indemnification. Code ~ 105.02, entitled City Indemnification, paragraph 2 thereof, indicates that the City will provide defense or reimburse legal fees of its appointed and elected officials in proceedings which may be related to their service as City officials, including any legal action taken to enforce Chapter 105, to the same extent, and in accord with the state statutory provisions applicable to nonprofit corporations. Those provisions are found at Minn. Stat. Minn. Stat. ~ 317 A.521. There are some exceptions to indemnification set forth in Code ~ 105.07. It does not apply to action or conduct beyond the scope of a person's employment or responsibility. It does not apply to any intentional acts that violate criminal statutes, ordinances or regulations of the state, the federal government or the city, except as allowed pursuant to Minn. Stat. ~~ 317A.521 and 465.76. Under Minn. Stat. ~ 317 A.521, indemnification for nonprofit corporation officials occurs in criminal proceedings if it is found that the person seeking indemnification: (1) acted in good faith; (2) received no improper personal benefit; (3) did not have reasonable cause to believe the conduct was unlawful; (4) and in the case of acts involving a director (in this case that would be a Council Member) reasonably believed that the conduct was in the best interests of the corporation. Under this statute, in order for indemnification to occur, there must be a determination that the criteria set forth above have been satisfied. That determination is in the first instance to be made by a quorum of the governing body. A determination of quorum under this statute is by counting members of the governing body who are not "parties to the proceeding." Under this statute, if an adverse determination is made, the person seeking reimbursement may make an application to court for a reimbursement decision. 2 There are a number of instances where Chapter 105 ignores provisions of Minn. Stat. SS 466.07, or 465.76. This may give rise to a conflict, and an argument that the Code provision is void for conflicting with state law. Additionally, important definitional sections of S 466.07 are missing. One could readily argue that Chapter 105 is superfluous and unnecessary given the existence of Minn. Stat. SS 466.07 and 465.76.