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Town counsel: Danvers library trustees generally not indemnified under state Tort Claims law
Summary
Town counsel told the Danvers Library Trustees the Massachusetts Tort Claims Act and the retirement-board statute do not generally extend indemnification to library trustees whose primary role is managing a private trust fund; trustees were advised to consider private insurance or reorganizing duties if indemnification is a priority.
Town counsel Kate Connolly told the Town of Danvers Library Trustees that state law does not generally indemnify library trustees for actions tied to management of private trust funds.
"The statute only protects retirement boards, however, so it has no application to the library trustees," Connolly said, citing General Laws Chapter 32, Section 20A and the Massachusetts Tort Claims Act (Chapter 258). She explained that courts have distinguished retirement boards and other municipal bodies from trustees whose main function is administering private trust funds.
The guidance came during a trustee question-and-answer session prompted by concerns about potential liability for trust management and personnel matters. Trustees asked whether they could adopt a bylaw to indemnify themselves or rely on the town's insurance; Connolly said indemnification by local bylaw is not a substitute for the statutes and that the Tort Claims Act protections apply only in particular circumstances when municipal functions and town ownership of funds align.
Connolly said an alternate path would be securing municipal-style liability insurance through cooperative insurers or associations that work with local governments. "You can have private insurance, but it's a different type of insurance," she said, pointing to options such as MIIA (Massachusetts intermunicipal insurance associations) and similar providers that underwrite municipal exposures.
Trustees pressed on specific scenarios: whether personnel-related claims naming trustees would expose them to individual liability and whether reorganizing the board's duties could change the legal outcome. Connolly said routine personnel complaints are typically narrow exposures, and that the board's most significant legal risk would arise from gross mismanagement of the trust fund rather than ordinary personnel matters. She advised trustees to consult the town's labor counsel for employment-related exposures and noted that case law outcomes can differ on factual grounds where trustees perform substantial town-management functions beyond trust administration.
Several trustees noted the retirement board has accepted the statutory protection Connolly described; trustee Mike Hagan said he raised the matter because the retirement board manages a much larger pool of assets and he wanted parity of protection. "I was the one that originally brought it up," Hagan said during the discussion, describing why the subject merited a legal review.
No formal action was taken to change governance or to purchase insurance at the meeting. Trustees indicated they will review the town manager's memo and follow up with the town manager and the town's finance staff about whether a structural change or private insurance procurement is appropriate.
The town counsel also provided practical guidance about open meeting law and related procedures during the same presentation, cautioning trustees about serial communications and the need to post meeting notices and agendas in accordance with statutory requirements.
The board's discussion of indemnification did not result in a vote; trustees said they expect further review with the town manager and town staff.
