115 Wash. App. 740 | Wash. Ct. App. | 2003
State law requires municipalities to provide counsel at public expense to defend officials in suits arising from the performance of their official duties. RCW
FACTS
Stephen Eugster is an attorney and an elected member of the Spokane City Council. He sued the city of Spokane and the developers of the River Park Square project both in his private and official capacities. In June 2001, the developers answered and counterclaimed against the city council members and the mayor in their official capacities. The developers also sued former mayor John Talbot and his wife, and city council members Steve Corker and Cherie Rodgers, as well as Mr. Eugster and his wife as individuals.
Mr. Eugster responded to the counterclaim by asserting the defense of citizen immunity: “A person who in good faith communicates a complaint or information to any agency of federal, state, or local government... is immune from civil liability for claims based upon the communication. . . .” Former RCW 4.24.510 (1999).
He notified the city attorney of the action against him and requested indemnification under Spokane Municipal Code
On August 23, the city attorney responded to Mr. Eugster’s request by explaining that both the municipal code and the city charter prohibit the city from appointing Eugster Law Offices, PSC. Spokane City Charter section 36 prohibits the city from entering into a contract with a city officer from which the officer benefits directly or indirectly. The city attorney acknowledged that the city’s interest in minimizing its liability created a conflict of interest. The developers’ claims against Mr. Eugster asserted tortious conduct both within and exceeding his official duties. But the exact nature of their complaints was not clear from the pleadings. The city was not responsible for conduct outside the actual or good-faith-belief scope of official duties.
The city attorney offered to retain independent counsel to represent the Eugsters’ interests, subject to a reservation of rights. The city offered to provide the Eugsters with independent counsel on the same terms as counsel had been offered to Mr. Corker, Ms. Rodgers, and Mr. Talbot.
The city council rejected a proposed council resolution offered by Mr. Eugster to retain his firm, Eugster Law Offices, of which Mr. Eugster is the sole shareholder. The city relied on the anti-corruption provisions of city charter section 36. Mr. Eugster engaged his own firm, nonetheless.
Mr. Eugster petitioned for direct review by the Supreme Court, which denied his petition and transferred the case to us.
DISCUSSION
Mr. Eugster contends that, because it does not expressly provide otherwise, RCW 4.96.041 operates to:
(1) guarantee him the right to retain counsel of his choice and
(2) require that the city must either:
(a) contract directly with his chosen counsel to conduct the defense, or
(b) reimburse Mr. Eugster for expenses he incurs by contracting with counsel himself.
The city responds that RCW 4.96.041 does not give Mr. Eugster the absolute right to represent himself.
Statutory Interpretation
Standard of Review. Statutory (and municipal code) interpretation is a question of law. So our review here is de novo. State v. Keller, 143 Wn.2d 267, 276, 19 P.3d 1030 (2001), cert. denied, 534 U.S. 1130 (2002). We must construe legislative enactments to carry out their manifest intent. City of Seattle v. Fontanilla, 128 Wn.2d 492, 498, 909 P.2d 1294 (1996). We read the statute as a whole, giving effect to all its terms and harmonizing related provisions wherever possible. Id.
State Statute. RCW 4.96.041(1) permits an officer or employee of a local governmental entity (city) who is sued for damages for “acts or omissions while performing or in good faith purporting to perform his or her official duties” to
RCW 4.96.041 thus requires legal representation at public expense. But it is silent on the procedures by which this is to be achieved. The statute leaves it to each local government entity to devise appropriate procedures. The legislature could have permitted a municipal officer to be represented by private counsel of choice whenever a conflict of interest exists. But it did not do so. See, e.g., Mothersell v. City of Syracuse, 952 F. Supp. 112, 115 (N.D.N.Y. 1997) (discussing N.Y. Pub. Off. Law § 18(3)(b) (McKinney 1988)).
Once the city accepts the defense, it is obligated to pay any adverse judgment. RCW 4.96.041(2). In the usual case, therefore, the official seeking protection will have no further interest in whether the city attorney or outside counsel is retained. The statute simply does not address the possibility of a conflict of interest between the agent and the city. There is, therefore, no reason for the legislature to specify the precise mechanism by which a local government entity must accomplish representation.
The city argues that RCW 4.96.041 does not require an indemnification policy broader than that provided by SMC 3.07.200. It is correct.
Spokane Municipal Code. SMC 3.07.200 is the Spokane indemnification policy which implements RCW 4.96.041. SMC 3.07.200(A) provides that the city will provide “defense and legal representation” for its agents who are sued for acts or omissions arising out of their official duties.
The ordinance outlines a procedure roughly as follows. When a city agent tenders a defense, the mayor, assisted by
A city council member is an agent for the purposes of indemnification. SMC 3.07.210(A)(2); SMC 1.02.080(C)(1). The indemnification coverage extends to the agent’s spouse and the marital community. SMC 3.07.210(C).
“Unless and until it is determined that the City is not responsible for the agent’s conduct, the City defends, settles and pays on behalf of the agent any amounts for which the agent is liable to the extent the liability arises from acts or omissions within the scope of this chapter.” SMC 3.07-.200(C) (emphasis added).
SMC 3.07.200 requires that the city defend and provide representation for claims for acts or omissions in the performance of an agent’s duties. The city attorney is the legal advisor of the city officers. He or she conducts all cases in court and all other actions and proceedings not in charge of special counsel, to which the city may be a party or in which it may be interested. Spokane City Charter § 29.
But here, it was not possible to determine whether the allegations against Mr. Eugster fell, even arguably, within the scope of his council duties. Therefore, the city of Spokane defended the Eugsters appropriately. Recognizing the potential conflict of interest, the city attorney offered to defend via special counsel retained under charter section 33.
This is more than RCW 4.96.041 requires. Mr. Eugster insists, nonetheless, that SMC 3.07.200 conflicts with RCW 4.96.041 to the extent that it does not guarantee him the absolute right to retain his own counsel. But the plain
Mr. Eugster’s wife, Ms. Roloff, also does not have the right to her own independent counsel. SMC 3.07.210(C) includes her and the marital community in the indemnification offered to Mr. Eugster. To the extent that her legal interests may diverge from his, the city owes her no defense.
Spokane City Charter Section 33. The city council, at any time, may employ other or special counsel to take charge of special matters or to assist the city attorney. Spokane City Charter § 33.
The city maintains that section 33 is the only authority under which the mayor may appoint and the city council approve any special counsel retained by the city. Mr. Eugster argues that the authority to engage special counsel under section 33 does not apply. He argues that, under RCW 4.96.041, the city council does not employ counsel for the Eugsters; the Eugsters employ counsel for themselves.
The city charter contemplates two categories of legal proceedings: those conducted by the city attorney, and those assigned to special counsel. Under charter section 29, as the legal advisor of the city officers, the city attorney conducts “all cases in court and all other actions and proceedings not in charge of special counsel, to which the city may be a party or in which it may be interested.” If special circumstances preclude the city attorney’s office from defending, section 33 permits the city council to retain special counsel.
Here, the city clearly has an interest in the litigation. It is obligated to pay any adverse judgment if its officers acted in good faith. The circumstances are also special because claims are asserted against Mr. Eugster both in his capacity as a council member and as an individual. And SMC 3.07.200 does not provide for the situation in which an agent is sued in both official and unofficial capacities. To
The city attorney is, then, conflicted out of the representation. The municipal code and city charter provide for special counsel to be appointed under charter section 33. Section 33 unambiguously provides that the mayor and city council — not the agent-defendant — will retain counsel, i.e., contract with counsel for services.
Spokane City Charter Section 36. Officers or employees of the city may not have any interest in city contracts. Spokane City Charter § 36. The relevant subsection is (c): “All contracts of the city shall be free from all influence of or benefit to, any officer or employee of the city.” This applies to “any contract to which the city shall be a party,” except for contracts to pay the lawful compensation or salary. Spokane City Charter § 36(c).
Mr. Eugster contends that charter section 36 does not apply because the city would not be a party to the contract between himself and Eugster Law Offices. And, even if section 36 did apply, it would take away what RCW 4.96.041 grants.
The charter prohibition does not, however, apply solely to contracts to which the city is a signatory. It applies to every transaction in which the city engages. Whether by paying Mr. Eugster directly or by retaining him as his own special counsel, charter section 36 prohibits the city council from approving an agreement from which Mr. Eugster derives financial or other benefit, either directly or indirectly. This interpretation harmonizes charter section 6, which precludes any elective official of the city from engaging in “any other capacity in city employment or office.” This would preclude Mr. Eugster, an elected official, from accepting an appointment even if one were offered.
Equal Protection
Mr. Eugster argues that, if charter section 36 does apply and if it is not superseded by RCW 4.96.041, then it is unconstitutional as applied to him. He contends it operates
Statutory classifications are subject to the equal protection clauses of both state and federal constitutions: those who are similarly situated with respect to legitimate purposes of the laws must receive like treatment. Medina v. Pub. Util. Dist. No. 1 of Benton County, 147 Wn.2d 303, 312, 53 P.3d 993 (2002). But unless a protected class is involved, judicial scrutiny is minimal. The challenged provision will be upheld so long as it applies equally to all members of the class, is based on reasonable distinctions between class and nonclass members, and bears a rational relationship to the purpose of the regulation. Am. Network, Inc. v. Utils. & Transp. Comm’n, 113 Wn.2d 59, 77-78, 776 P.2d 950 (1989).
The right to bring suit against political subdivisions of the state and its municipalities was created by statute in 1967 when the legislature waived sovereign immunity. Medina, 147 Wn.2d at 312 (citing Laws of 1967, ch. 164, §§ 1, 4). The right to sue the state is not a fundamental right; it is statutory. Id. It follows then that the state can place limitations upon that right. Id. The Washington State Constitution, moreover, expressly reserves to the legislature the right to regulate lawsuits against governmental entities. “The legislature shall direct by law, in what manner, and in what courts, suits may be brought against the state.” Const. art. II, § 26; Medina, 147 Wn.2d at 312.
Mr. Eugster does not contend the statute, ordinance, or charter provisions at issue here are unconstitutional as written. He does not claim to be a member of a protected class. The class to which RCW 4.96.041, SMC 3.07.200, and charter section 36 apply is city officers and employees. And their provisions apply equally to all mem
Moot Question
The city suggests that this appeal is moot because the court can no longer grant a writ of mandamus compelling the city to comply with Mr. Eugster’s requirements that his own law firm be recognized as counsel for the purposes of indemnification in this matter. Mr. Eugster and the city have now reached an agreement. Mr. Eugster has selected independent counsel at the city’s expense.
An appeal is technically moot if we cannot provide the basic relief sought. Orwick v. City of Seattle, 103 Wn.2d 249, 253, 692 P.2d 793 (1984); Eugster v. City of Spokane, 110 Wn. App. 212, 228-29, 39 P.3d 380, review denied, 147 Wn.2d 1021 (2002). We may, however, decide a moot appeal that involves matters of continuing and substantial public interest. Westerman v. Cary, 125 Wn.2d 277, 286, 892 P.2d 1067 (1994).
We consider three primary factors: (1) the public or private nature of the issue, (2) whether an authoritative determination is desirable for the future guidance of public officers, and (3) whether the issue is likely to recur. Hart v. Dep’t of Soc. & Health Servs., 111 Wn.2d 445, 448, 759 P.2d 1206 (1988).
This issue is not technically moot because, if we reverse the superior court and order that the writ of mandamus be granted, Mr. Eugster would receive the basic relief he seeks: recognition of the statutory and constitutional right of a city officer to represent himself.
Even if it were moot, however, the issue is a public one. An authoritative determination is desirable. And the situation is highly likely to recur, given the litigious relationship between Mr. Eugster and the city of Spokane.
We affirm the judgment of the trial court.
Brown, C.J., and Schultheis, J., concur.
Marilee K. Roloff is Mr. Eugster’s wife. We follow Mr. Eugster’s example and refer to Mr. Eugster, Ms. Roloff, and their marital community collectively as “the Eugsters.”