Memorandum

City of Lawrence

Legal Services Department

TO:	David L. Corliss, City Manager
FROM:	Toni Ramirez Wheeler, Director of Legal Services
CC:	Debbie Van Saun, Assistant City Manager and Frank S. Reeb, Director of Administrative Services and City Clerk
Date:	May 10, 2007
RE:	Liability of City Under Proposed Ordinance Establishing a Domestic Partnership Registration

The question has been raised whether the City could be implicated and subject to liability if a person files a declaration of domestic partnership with the City under the proposed ordinance establishing a domestic partnership registry, with the intent to defraud an insurance company (for the purposes of receiving insurance coverage or benefits).  It is staff’s opinion that the City would not be subject to liability under these circumstances.  First, Section 10-205(C) of the draft ordinance makes it clear that the City relies upon the information provided by the declarant / registrant.  It states:

(C) The City shall maintain the registry based upon the information provided by the individuals filing the Declaration of Domestic Partnership.  The City shall have no duty to independently verify the information provided by the individuals filing the Declaration of Domestic Partnership.

Under the draft ordinance, the City undertakes no duty to notify third parties when a request for removal from the registry is filed with the City.  Under the draft ordinance, the registrants must notify affected third parties of the removal of a domestic partnership from the City’s domestic partnership registry.  Section 10-204(B) states:

          (B)

(3)      A former domestic partner who has given a copy of the Declaration of Domestic Partnership to any third party to qualify for any benefit or right and whose receipt of that benefit or enjoyment of that right has not otherwise terminated, shall notify the third party in writing of the Request for Removal from the Domestic Partner Registry, at the last known address of the third party.

The ordinance seeks to clearly place responsibility on the individuals filing the Declaration of Domestic Partnership to provide accurate information to the City in registering and to provide timely notice to third parties of the filing of a request for removal from the registry.

K.S.A. 40-2, 118 defines “fraudulent insurance act” and provides the penalty therefor.  Under that statute a fraudulent insurance act is committed by a person who

knowingly and with the intent to defraud presents, causes to be presented or prepared or prepares with knowledge or belief that it will be presented to…an insurer, purported insurer, broker or any agent thereof, any written statement as part of, or in support of, an application for the issuance ...for personal or commercial insurance, or a claim for payment or other benefit pursuant to an insurance policy for commercial or personal insurance which such person knows to contain materially false information concerning any fact material thereto; or conceals, for the purpose of misleading, information concerning any fact material thereto.

Under the proposed ordinance, the City will not submit any statements, applications or claims for benefits to insurance companies on behalf of individuals.  The City will provide upon a specific request access to the domestic partnership registry and public records associated with it.  While it has not been litigated in Kansas because there are no domestic partnership registries in existence in Kansas, it is unlikely that the City would face liability if a person included in the domestic partnership registry commits a fraudulent insurance act as defined in the Kansas statute cited above.    An electronic search of case law nationwide disclosed no cases in which a municipality maintaining a domestic partnership registration was involved as a named party in litigation for a fraudulent insurance act.