Summary
noting that many Ohio Attorney General Opinions found that the common-law incompatibility test was inapplicable to two positions of "public employment"
Summary of this case from State v. MurphyOpinion
No. 92-CIV-571.
Decided February 23, 1993.
William M. Fisher and David A. LaRue, for plaintiffs.
Andrew A. Beech and Lawrence W. Stacey, for defendants.
I. Case Review
On September 15, 1992, plaintiffs filed their complaint seeking a declaratory judgment, pursuant to R.C. Chapter 2721, and equitable relief. The defendants were appropriately served with summons and process on September 17, 1992.
The defendants jointly moved to dismiss the complaint on October 14, 1992 pursuant to Civ.R. 12(B)(6). Plaintiffs' opposition memorandum was filed on November 13, 1992. Said motion was noticed for non-oral hearing on November 13, 1992, and on November 16, 1992, the motion was overruled. The defendants subsequently filed their joint answer to the complaint on November 27, 1992.
A pretrial conference was convened on December 1, 1992, at which time it was agreed that all material facts would be submitted into the record by a joint written stipulation of the parties (obviating the need for a trial per se), and a briefing schedule was fixed on the substantive legal questions. The joint stipulations of fact were filed on December 31, 1992.
The parties' respective memoranda were timely filed on January 29, 1993. This case was deemed fully submitted for final adjudication on January 29, 1993 at 3:00 p.m.
II. Issues
The primary issue before the court is the plaintiffs' prayer for a declaratory judgment "that the position of Village Legal Counsel, of necessity, cannot be limited so as to avoid conflicts of interest with the position of assistant county prosecutor."
The remaining prayers for equitable relief ( i.e., mandamus, injunction) are ancillary to the above core issue.
III. Material Facts
The underlying material facts have been stipulated to per Joint Stipulations entered December 31, 1992, and are reproduced herein:
"1. A controversy exists between the Plaintiffs and Defendants.
"2. The Plaintiffs, WAYNE J. ROSE and NANCY DONOHUE ECKSTEIN, are proper Plaintiffs in this action, being taxpayers of the Village of Wellsville, Ohio.
"3. Defendant, ANDREW A. BEECH, serves as legal counsel to the Village of Wellsville, Ohio.
"4. Defendant, VILLAGE OF WELLSVILLE, is an Ohio municipal corporation situated entirely within Columbiana County, and which operates under the statutory form of government.
"5. On December 3, 1991, the Village Council voted to retain Defendant, ANDREW A. BEECH, as its legal counsel, as authorized by Ohio Revised Code 733.48. A true copy of the Ordinance No. 91-64 is attached to this joint stipulation as Exhibit `A'.
"6. ANDREW A. BEECH was at the time of the Village Council's December 3, 1991 vote, and at all times thereafter, employed by the County of Columbiana as an Assistant Prosecuting Attorney.
"7. Ordinance No. 91-64 authorizes and directs the Mayor to enter a contract with said legal counsel (Beech) under the terms and conditions set forth in the Ordinance. A true and correct signed copy of said contract is attached hereto as Exhibit `B'.
"8. Defendant Beech prepared or approved the drafts of both Ordinance No. 91-64 and his employment contract.
"9. Plaintiffs, by and through their counsel, WILLIAM M. FISHER and DAVID A. LaRUE, made written requests to Defendant Beech to proceed on the Taxpayer-Plaintiffs' behalf, before filing the complaint against the Defendants."
IV. Applicable Law and Opinion
A. Preface
At issue sub judice are the following identical provisions of both Wellsville Village Ordinance No. 91-64 and the Beech-Wellsville Professional Services Contract, to wit:
"That attorney shall represent the Village and its officers in certain legal matters, subject to the exceptions set forth below, including: providing legal advice to the Village and its officers in matters relating to their official duties; rendering legal opinions when requested in writing by Village officers; preparing legislation, contracts, and other written instruments in which the Village is concerned; and prosecuting or defending on behalf of the Village such complaints, suits, and controversies in which the Village is a party, except that attorney shall not be required to prosecute any action before the Mayor for the violation of an ordinance without first advising such action.
"That attorney shall not represent Village or its officers in legal matters involving the levy of taxes, issuance of bonds, examination and adjustment of tax budgets, allocation of tax proceeds, any other matters involving the Columbiana County Budget Commission, and any other legal matters which attorney determines, in his sole judgment and discretion, to constitute a conflict of interest.
"That attorney shall be serving the Village and its officers as legal counsel in certain specified legal matters as set forth herein, and not as `village solicitor' as such term is used in the Revised Code or elsewhere." (Emphasis added.)
The essence of plaintiffs' declaratory judgment action is two-fold: (a) did the Council of the village of Wellsville abuse its discretion, under R.C. 733.48, by employing legal counsel for the village with contractual limitations upon the scope of his representation, and (b) under the facts of this contractual arrangement, are co-defendant Beech's positions as village legal counsel and as an Assistant Prosecutor for Columbiana County incompatible?
For the reasons set forth infra, the court answers both of these questions in the negative.
B. Application of R.C. 733.48
Villages in Ohio operate under the so-called "general statutory plan" of government unless, pursuant to R.C. 705.01 to 705.06, the electors therein organize the village under one of the alternative, so-called "optional plans" of government. Under the general plan, the legislative power is vested in a village council (R.C. 731.09) and the executive power is vested in a mayor (R.C. 733.23) and such other "officers" as may be created by law under R.C. Chapter 733. The optional plans include the "commission" (R.C. 705.41), "city manager" (R.C. 705.51), and "federal" (R.C. 705.71) forms of government. See, generally, Gotherman Babbit, Ohio Municipal Law (Baldwin 2 Ed. 1992), Text 4.10-4.18.
Under the "general plan," there is no statutory provision for the creation of the position of "village solicitor" or legal counsel as an "officer" of government. A general plan village obtains its legal counsel by contract only (R.C. 733.48) rather than by the appointment process. See Gotherman Babbit, supra, Text 8.15(B).
Under the optional "commission plan," a village solicitor is appointed to that office (R.C. 705.46). Under the other "optional" plans, village solicitors are also appointees and administrative officers (for city manager plans, at R.C. 705.56; for federal plans, at R.C. 705.78).
Under any of these "optional" plans of village government, the "village solicitor's" duties are the same and are expressly prescribed by statute (R.C. 705.11; see Gotherman Babbit, supra, Text 4.22). However, the duties imposed by R.C. 705.11 upon village solicitors as legal counsel only apply to "optional" forms of government, and they do not apply to "general, statutory" villages (see R.C. 705.07, making R.C. 705.07 to 705.32 inclusive, thus including R.C. 705.11, applicable only to "optional" plans of government created pursuant to R.C. 705.41 to 705.86, inclusive).
In our case sub judice, the parties have stipulated that the defendant, village of Wellsville, Ohio, is a municipal corporation which operates only under the "general, statutory plan" of government described supra (see Fact Stipulation No. 4). Consequently, it can obtain legal counsel only by contract under R.C. 733.48. That section provides:
" When it deems it necessary, the legislative authority of a village [its council, R.C. 731.09] may provide legal counsel for the village, or for any department or official thereof, for a period not to exceed two years, and provide compensation for such counsel." (Emphasis added; eff. Oct. 1, 1953, formerly G.C. 4220.)
The ordinance and contract at issue expressly state that they are made pursuant to R.C. 733.48 (see Exhibits A and B), and the parties have stipulated that this is the operative statute (see Fact Stipulation No. 5). Unlike R.C. 705.11, which expressly describes the duties of a "village solicitor" per se, R.C. 733.48 is silent as to nature and extent or the type(s) of representation to be furnished. Consequently, R.C. 733.48 may be construed very broadly.
A "general, statutory plan" village is not required even to have "legal counsel," but it " may" retain same whenever " it deems it necessary." The contract is between the village council and the attorney, and the contract must be authorized by ordinance or resolution passed by council (see 1927 Ohio Atty.Gen.Ops. No. 951, at 1665). The parties have stipulated this was done (see Fact Stipulation No. 5, Exhibit A). Plaintiffs raise no objection to the mechanics involved in retaining defendant Beech, but rather question the nature or scope of his employment duties.
As observed supra, a village legal counsel hired pursuant to R.C. 733.48 is not a "public official," nor is his position an "office" (1915 Ohio Atty.Gen.Ops. No. 217, at 412; State v. Wilson, 29 Ohio St. 347). Thus, the duties of a village "legal counsel," not being prescribed by any statute, are purely contractual and fixed by contract ( Wilson, supra; 1976 Ohio Atty.Gen.Ops. No. 069, at 2-237; 1928 Ohio Atty.Gen.Ops. No. 1658, at 262; 1963 Ohio Atty.Gen.Ops. No. 121, at 203; 1967 Ohio Atty.Gen.Ops. No. 115, at 2-181; 1969 Ohio Atty.Gen.Ops. No. 39, at 2-70).
In the absence of some express or implied restriction or prohibition, a "statutory plan" village has the authority to employ legal counsel, pursuant to R.C. 733.48, whenever and wherever it is necessary to be represented for the preservation and protection of its interests (1967 Ohio Atty.Gen.Ops. No. 115, at 2-179). Under R.C. 733.48, if the manner in which payment for services rendered is made "discretionary" with the village council (see 1921 Ohio Atty. Gen.Ops. No. 2100, at 436), then, absent some statutory restriction, it follows that the nature of the contract services rendered is also discretionary, and is left to the parties' negotiations. As already observed, R.C. 705.11 is not applicable to village legal counsel engaged pursuant to R.C. 733.48 (R.C. 705.07).
Accordingly, the R.C. 733.48 employment contract may be as broad, or as narrow, as the village council and the attorney involved choose to make it. The attorney may be hired as "general counsel" to represent the village in all its legal matters, or his representation may be limited to certain on-going specific matters (as the contract sub judice is framed), one single matter or case, or to the village itself as an entity, or to just one single village official. Plaintiffs' characterization of Beech's employment as one of "general" legal counsel is not supported by the plain and unambiguous language contained in Exhibits A and B. Applying general rules of contract construction, words and phrases are to be given their plain and ordinary meaning. The intent of the parties to Exhibits A and B could not be more clear. Beech was retained only for "certain specified legal matters." Nothing prevents the Village of Wellsville from employing "additional" legal counsel (as presumably it did in hiring attorney Lawrence W. Stacey to represent it in this lawsuit), or "other" legal counsel to represent it in those matters excepted in Ordinance No. 91-64 (Exhibit A, Section 3).
Sub judice, the plaintiffs concede, that R.C. 733.48 "creates discretionary authority" in the village council to provide legal counsel for the village when it deems necessary. Plaintiffs also concede that "no indication is contained in the statute [R.C. 733.48] that a village legislative authority does not have discretion to employ legal counsel on any basis or for any compensation it wishes to any extent" ( id., plaintiffs' emphasis). In the area of public contracts and in the absence of fraud, illegality, bad faith, or an abuse of discretion, proven by a preponderance of the evidence, courts cannot, and should not, interfere with the exercise of discretion expressly vested in public authorities. See State ex rel. Bd. of Pub. Serv. of Columbus (1909), 81 Ohio St. 218, 225, 90 N.E. 389; Cleveland v. Thomas (1921), 15 Ohio App. 76, at 80, 82; Altschul v. Springfield (1933), 48 Ohio App. 356, 362-363, 1 O.O. 522, 193 N.E. 788. Plaintiffs herein do not allege fraud, illegality, or bad faith, but argue that the Wellsville Village Council abused its discretion in this matter.
The term "discretion" itself "`"involves the idea of choice, of an exercise of the will, of a determination made between competing considerations."'" Turowski v. Johnson (1991), 70 Ohio App.3d 118, 121-122, 590 N.E.2d 434, 436. An "abuse of discretion" is generally considered more than a mere error in judgment, but rather suggests an attitude of unreasonableness, arbitrariness, or unconscionability. In this case, there is no evidence, by a preponderance or otherwise, that the Wellsville Village Council committed an abuse of discretion in this matter. Therefore, this court cannot interfere with the contract with attorney Beech.
C. Incompatibility of Positions
Last, we turn to the question of whether Beech's positions as a Columbiana County Assistant Prosecuting Attorney and as Wellsville's "legal counsel" are incompatible and create an impermissible conflict of interest. Plaintiffs observe, and correctly so, that Beech, in preparing Ordinance No. 91-64 and the Professional Services Contract at issue, has attempted to "draft his way around" potential conflicts of interest between his positions. From a purely contract law aspect, there is nothing per se improper in his so doing. The court has already determined that the R.C. 733.48 contract of employment is not the product of fraud, bad faith, illegality, or an abuse of discretion. On its face, the contract is permissible.
Plaintiffs place much reliance upon 1989 Ohio Atty.Gen.Ops. No. 007, at 2-27 (discussed infra). While there is a dearth of case law on the issue of compatible and incompatible positions, there are a plethora of Ohio Attorney General Opinions on same. Unfortunately, the court's own independent research suggests that these opinions result in a morass of inconsistency and contradiction. Mercifully, Ohio Attorney General Opinions, while perhaps useful as guidance, lack any precedential value and do not bind the courts of Ohio as controlling authorities. This court, therefore, declines either to list these various opinions or to make any attempt to harmonize them, indeed if that is even possible.
"In determining whether or not two positions or offices may be held by one person, courts are first bound by statutory prohibitions and second, where no statutory prohibitions exist, by the common law." (Emphasis added.) Pistole v. Wiltshire (C.P. 1961), 90 Ohio Law Abs. 525, 22 O.O.2d 464, 189 N.E.2d 654, headnote one. As in Pistole, the only relevant statute is R.C. 3.11, which is facially inapplicable to our case sub judice. The court has not located any other relevant statutes, nor have counsel cited any. Therefore, our analysis involves only the Ohio common law on incompatibility.
The fundamental Ohio common-law test of incompatibility, applicable to Attorney General Opinions as well as to judicial decisions, is found in State ex rel. Atty. Gen. v. Gebert (1909), 12 Ohio C.C. (N.S.) 274, 21 Ohio C.D. 355, to wit:
"Offices are considered incompatible when one is subordinate to, or in any way a check upon, the other; or when it is physically impossible for one person to discharge the duties of both." See 1965 Ohio Atty.Gen.Ops. No. 150; Chronister v. Trumbull Cty. Pros. Atty. (1988), 39 Ohio Misc.2d 10, at 11, 531 N.E.2d 785, at 786.
We observe at this point that whether it is physically possible for one person to discharge the duties of two public positions is a question of fact and not of law. As such, it is a question best resolved by the interested parties and determined at the local level. See 1961 Ohio Atty.Gen.Ops. No. 2043, at 98; 1979 Ohio Atty.Gen.Ops. No. 111, at 2-373; 1988 Ohio Atty.Gen.Ops. No. 017, at 2-68; Allison v. Baynes (C.P. 1953), 65 Ohio Law Abs. 495, 115 N.E.2d 62. Consequently, this court need not address this element further.
Over the years, whether two public positions are deemed incompatible has been determined by whether one or both positions are a public "office." See 1965 Ohio Atty.Gen.Ops. No. 150, applying Gebert, supra; 1979 Ohio Atty.Gen.Ops. No. 111, at 2-371. It was held that the Gebert common-law test of incompatibility was inapplicable to two positions merely of "public employment." If, arguendo, this distinction retains validity, then Beech's two positions are clearly compatible. We have already determined that "legal counsel" hired by a statutory plan village pursuant to R.C. 733.48 is not an "officer" and holds no public "office" (refer to prior analysis of R.C. 733.48). He is merely an "employee" of the village. Likewise, an assistant prosecutor is an appointee of the county prosecutor, and serves at his will. An assistant prosecutor is also merely a "public employee" ( Pistole, supra, applied).
A more recent focus has been upon the incompatibility of "functions" and not their designation as public "offices" (1979 Ohio Atty.Gen.Ops. No. 111, at 2-371). As re-stated in 1985 Ohio Atty.Gen.Ops. No. 042, at 2-150:
"One person may not simultaneously hold two public positions if he would be subject to divided loyalties and conflicting duties or exposed to the temptation of acting other than in the best interest of the public." (Emphasis added.)
This "functional" analysis seems to have been employed most recently by Ohio courts. See Chronister, supra; Esler v. Summit Cty. (1985), 39 Ohio Misc.2d 8, 530 N.E.2d 973.
The Esler court essentially recognized the standards first adopted by the Ohio Attorney General in 1979 Ohio Atty.Gen.Ops. No. 111, 2-367, in determining the incompatibility of "public positions," adding that "* * * the standard presently is to look to the degree of remoteness of a potential conflict [of interest], the ability or inability to remove oneself from the conflict, whether one exercises decision-making authority in both positions, whether the conflict involves primary functions of each position and whether the conflict involves budgetary controls. * * *" Id. at 10, 530 N.E.2d at 975.
This court is of the opinion that the best test for determining whether two public "positions" are incompatible under the current common law is to employ the seven factors outlined in 1979 Ohio Atty.Gen.Ops. No. 111, at 2-367, as expanded by Esler, supra. This test will be applied to the circumstances of the case sub judice.
The first factor questions whether either of the positions is a classified employment within the purview of R.C. 124.57. An assistant county prosecutor holds an unclassified position, R.C. 124.11(A)(11), and, therefore, he is not subject to the R.C. 124.57 prohibition. Persons employed by a village do not come within the scope of R.C. 124.57. See 1992 Ohio Atty.Gen.Ops. No. 041, at 2-161.
The second factor questions whether the empowering statutes of either position limit outside employment. Nothing contained in R.C. 733.48 prohibits a "statutory plan" village's legal counsel from having other employment. While there are statutory provisions limiting the outside employment of county prosecutors and their assistants, none of these provisions prohibits an assistant prosecutor from also serving as R.C. 733.48 "legal counsel."
The third factor questions whether one position is subordinate to, or in any way a check upon, the other ( Gebert, supra). R.C. 733.48 legal counsel is employed, through contract, by a "statutory plan" village council. He is therefore responsible to that legislative authority and serves at its pleasure. An assistant county prosecutor is appointed by the county prosecutor, per R.C. 309.06, and thus is accountable to him. Village legal counsel and an assistant county prosecutor serve different masters and are not subordinate to each other. Additionally, neither of these positions acts as a check upon the other ( Pistole, supra, applied).
The fourth factor asks whether it is physically possible for one person to discharge the duties of both positions. This question was addressed above. Assuming there is no direct conflict in working hours, it would appear likely that one person can physically serve as R.C. 733.48 village legal counsel and as an assistant county prosecutor.
Factors six and seven are matters of local concern only (1979 Ohio Atty.Gen.Ops. No. 111, at 2-368). The parties herein have not cited any Wellsville ordinances or county prosecutor departmental regulations which prevent an assistant prosecutor of Columbiana County from serving also as a "statutory plan" village's legal counsel. The court is itself unaware of any such local restrictions and, therefore, will assume that there are none.
The final factor, number five, questions whether there is a "conflict of interest" between the two positions at issue herein. One person should not hold two public positions if he would be subject to divided loyalties and conflicting duties or be exposed to the temptation of acting other than in the public's best interest (1985 Ohio Atty.Gen.Ops. No. 042, at 2-150). Restated, will dual positions compromise his objectivity? The determination of whether an individual who simultaneously holds two public positions is subject to an impermissible conflict of interest is limited to a factual analysis of the particular duties he performs in his respective positions (1988 Ohio Atty.Gen.Ops. No. 017, at 2-68). " Where possible conflicts are remote and speculative, common law incompatibility or conflict of interest rules are not violated." (Emphasis added.) 1979 Ohio Atty.Gen.Ops. No. 111, at 2-367.
As a general rule, an assistant county prosecutor is subject to the same limitations on holding additional employment as is the county prosecutor himself. The assistant may not hold any position that the county prosecutor is prohibited from holding (1992 Ohio Atty.Gen.Ops. No. 041, at 2-159). However, "when incompatibility is based on subordination of positions or a conflict of interest, * * * the facts can create an exception to the general rule. * * *" ( Id. at 2-164.)
Of importance to our analysis of conflict of interest is 1916 Ohio Atty.Gen.Ops. No. 2115, at 1919, which, construing the employment of a county prosecuting attorney as village legal counsel under G.C. 4220 ( now R.C. 733.48 ), held that such employment was not prohibited provided that "it would be proper to place in the contract of employment a provision to the effect that the employment by the village council shall not extend to any matter which may directly or indirectly conflict with the performance of the official duties of such prosecuting attorney." (Emphasis added.) Id. at 1921. Under these factual, contractual circumstances, a county prosecutor himself may be employed under R.C. 733.48 as a village's "legal counsel." Accordingly, if the prosecutor can hold these two positions, then it follows so may his assistant. The Attorney General, in his Opinion No. 2115, supra, has impliedly recognized, if not expressly, that potential "conflicts of interest," including those relating to taxes, budgets, or matters involving a county budget commission, may, in the absence of authority to the contrary, be "drafted away" in an R.C. 733.48 employment contract. This is exactly what the Wellsville-Beech contract provides for (see Exhibit B, Paragraph No. 2). The consequence, to which plaintiffs herein object, that Wellsville may, at some time, find it necessary to employ other, or additional, R.C. 733.48 "legal counsel" to represent it in such matters does not render the Beech contract invalid or an impermissible abuse of legislative discretion. See 1992 Ohio Atty.Gen.Ops. No. 041, supra, permitting an assistant county prosecutor to act as a mayor's court magistrate within the same county with similar limitations imposed.
Notwithstanding 1916 Ohio Atty.Gen.Ops. No. 2115, supra, or in ignorance of it, the Attorney General issued his 1989 Ohio Atty.Gen.Ops. No. 007, at 2-27, which states:
"The positions of village solicitor and assistant county prosecuting attorney are incompatible."
This opinion is devoid of any of the underlying facts or circumstances of the particular dual employment in question, but does make reference to R.C. 733.48. We can only assume from that reference that a "statutory plan" village was involved. This opinion concentrates primarily upon the potential conflict of interest between these two positions in conjunction with matters involving a county budget commission ( id. at 2-28). Given the facts and circumstances of the case sub judice and 1916 Ohio Atty.Gen.Ops. No. 2115, supra, this court finds Attorney General Opinion No. 007 to be overly broad, inapplicable to our case, and erroneously reasoned.
First, citing 1924 Ohio Atty.Gen.Ops. No. 1150, at 43, the Attorney General in Opinion No. 007 concludes that the terms "village solicitor" and "legal counsel" employed under R.C. 733.48 are synonymous for purposes of applying pertinent sections of the Ohio Revised Code. There is nothing contained in Opinion No. 1150, expressly or by implication, to support such a conclusion. While in that opinion the Attorney General was construing G.C. 4220 (now R.C. 733.48) and, granted, he used the word "solicitor" with reference to G.C. 4220 "legal counsel," it is clear from a careful reading of that opinion that "solicitor" was used in the context of the generic name or title commonly given to village attorneys everywhere. The Attorney General, in Opinion No. 1150, was not defining the term G.C. 4220 "legal counsel" to mean a "solicitor" as that term was otherwise employed in the statutes of Ohio. The terms "village solicitor" and village "legal counsel" had separate and distinct meanings within the General Code just as they do today in the Revised Code.
In his Opinion No. 007 and having erroneously reached the above conclusion, the Attorney General then compounded the error by also concluding that the duties of "statutory plan" village legal counsel, employed pursuant to R.C. 733.48, " are delineated by R.C. 705.11. * * *" (Emphasis added.) Id. at 2-27. However, as observed in this opinion, R.C. 705.11 prescribes the minimum statutory duties of a village "solicitor" appointed to that office in a village operating under one of the alternative ("non-statutory") forms of government permitted in R.C. Chapter 705. By the express language in R.C. 705.07, which the Attorney General ignored, R.C. 705.11 applies only to village "solicitors" appointed under governmental plans adopted under R.C. 705.41 to 705.86, inclusive. Clearly, R.C. 705.11 has no application to "statutory plan" villages or their "legal counsel" employed under R.C. 733.48. The duties of such "legal counsel" are not prescribed by statute, but rather are determined by contract. For these reasons, Opinion No. 007 is distinguished from application to our case, and plaintiffs' reliance thereon is misplaced.
V. Judgment
Therefore, the court finds and declares that the Wellsville-Beech R.C. 733.48 employment contract is permissible, and that under the stipulated material facts and circumstances of this particular case, there is no patent conflict of interest or incompatibility in defendant Beech's dual positions as legal counsel for the village of Wellsville, Ohio, and as an Assistant Prosecuting Attorney for Columbiana County, Ohio.
Having so decided, the plaintiffs' prayers for equitable relief are denied.
Court costs are taxed to the plaintiffs; apply deposit. See record.
So ordered.
WILLIAM J. MARTIN, J., of the Carroll County Court of Common Pleas, sitting by assignment.