80 Hawai'i 425, Harris v. DeSoto

• Decision Date: 05 February 1996
• Docket Number: No. 18072,18072
• Citation: 911 P.2d 60
• Parties: 80 Hawai'i 425 Jeremy HARRIS, 1 in his official capacity as Mayor of the City and County of Honolulu; Russell W. Miyake, in his official capacity as Director of Finance, City and County of Honolulu; Malcolm J. Tom, in his official capacity as Chief Budget Officer, City and County of Honolulu; and Darolyn Hatsuko Lendio, in her official capacity as Corporation Counsel, City and County of Honolulu, Plaintiffs-Appellants, v. John DeSOTO, Duke Bainum, John Henry Felix, Mufi Hannemann, Stephen A. Holmes, Donna Mercado Kim, Rene Mansho, Andrew K. Mirikitani, and Jon C. Yoshimura, in their official capacities as members of the City Council, City and County of Honolulu; City Council, City and County of Honolulu, Defendants-Appellees.
• Court: Hawaii Supreme Court

Page 60

911 P.2d 60

80 Hawai'i 425

Jeremy HARRIS, ¹ in his official capacity as Mayor of the City and County of Honolulu; Russell W Miyake, in his official capacity as Director of Finance City and County of Honolulu; Malcolm J. Tom, in his official capacity as Chief Budget Officer, City and County of Honolulu; and Darolyn Hatsuko Lendio, in her official capacity as Corporation Counsel, City and County of Honolulu, Plaintiffs-Appellants, v. John DeSOTO, Duke Bainum, John Henry Felix, Mufi Hannemann Stephen A. Holmes, Donna Mercado Kim, Rene Mansho, Andrew K Mirikitani, and Jon C. Yoshimura, in their official capacities as members of the City Council, City and County of Honolulu; City Council, City and County of Honolulu, Defendants-Appellees.

No. 18072.

Supreme Court of Hawai'i.

Feb. 5, 1996.

Appeal from the First Circuit Court, City and County of Honolulu (Civ. No. 93-4615).

Ronald B. Mun, Former Corporation Counsel, and Robin M. Kishi and Hazel G. Beh, Former Deputies Corporation Counsel, on the briefs, Honolulu, for plaintiffs-appellants.

Paul Devens of Devens, Lo Youth, Nakano & Saito, on the briefs, Honolulu, for defendants-appellees.

Before MOON, C.J., KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.

MOON, Chief Justice.

Plaintiffs-appellants Jeremy Harris, Russell W. Miyake, Malcolm J. Tom, and Darolyn Hatsuko Lendio, in their respective official capacities as Mayor, Director of Finance, Chief Budget Officer, and Corporation Counsel of the City and County of Honolulu [hereinafter, collectively, the administration] appeal the First Circuit Court's order granting summary judgment in favor of defendants-appellees John DeSoto, Duke Bainum, John Henry Felix, Mufi Hannemann, Stephen A. Holmes, Donna Mercado Kim, Rene Mansho, Andrew K. Mirikitani, and Jon C. Yoshimura, in their official capacities as members of the City Council, City and County of Honolulu (the city), and the City Council [hereinafter, collectively, the City Council or the council]. By granting summary judgment in favor of the council, the circuit court upheld the validity of an ordinance recently passed by the council, over the mayor's veto, that effectively vests authority in the council to settle claims, demands, debts, disputes or other matters involving the city, except when settlement would not involve or require payment in excess of $5,000.00.

On appeal, the administration argues essentially that the circuit court erred in granting the council's motion for summary judgment because the ordinance conflicts with and contravenes the provisions, object, purposes, and policies of the Revised Charter of the City and County of Honolulu [hereinafter, the RCH, the charter, or the city charter].

To the extent that the circuit court's award of summary judgment in favor of the council grants exclusive authority in the council to settle or compromise a claim in exchange for consideration other than: (1) the commitment of city funds; or (2) an exercise of municipal authority vested exclusively in the council by the charter, we reverse the circuit court's order on the ground that it is inconsistent with the provisions, object, and purposes of the city charter. The circuit court's order is affirmed in all other respects.

I. BACKGROUND

On September 29, 1993, Bill No. 91 (1993), entitled "A Bill For an Ordinance Relating to the Settlement of Claims Against the City," was passed on third reading by the City Council. Bill No. 91 proposed to amend Article 3, Chapter 2 of the Revised Ordinances of Honolulu 1990 (ROH), to vest exclusive authority in the City Council to settle all claims against the city, and provided in pertinent part that:

The council finds that under the Revised Charter of Honolulu 1973, as amended, the council has the exclusive authority to settle claims made by private parties or government agencies against the city or the city's agencies, officers, or employees. The council has the sole power under the charter to adopt the city budget and to appropriate money for city purposes. No claims against the city can be settled or paid without council appropriation. The charter expressly provides for council review of claims against the city. In contrast, no provision in the charter gives to the executive branch or any official of the executive branch the authority to approve of the settlement of claims or to prevent the council from settling claims.

The council's exclusive authority to settle claims also is supported by the general principle, found in the case law, that in the absence of a contrary provision the power to compromise a claim is lodged with the legislative branch of a municipality. Neither the State constitution nor the general laws of the State contradict the council's finding.

However, the council has been frustrated in its attempt to settle claims and terminate litigation in those cases where the mayor has refused to settle. The corporation counsel has opined that settlement of claims against the city requires the concurrence of both the executive and legislative branches of city government. As a result, the corporation counsel has in the past failed to transmit settlement offers to the council when the mayor has not approved of settlement. In one case, a written offer to settle a substantial case was transmitted by the plaintiff to the corporation counsel in November, 1991, but not transmitted to the council by corporation counsel until September, 1992, after the council became aware of its existence and specifically requested it from the corporation counsel.

This practice is unacceptable because it deprives the council of its decision-making responsibilities and permits the mayor, as head of the executive branch, to pursue and continue litigation which may have little or no merit and which commits needed resources from the city's budget and forces the council to appropriate funds for the litigation. The situation is further complicated and exacerbated in instances where the corporation counsel is disqualified from representing the city and the city retains private attorneys. Consistent with the opinion of the corporation counsel, private attorneys representing the city have been instructed that they have no obligation or duty to bring settlement offers to the council for decision unless the offer is first approved by the officials of the executive branch.

The council does not wish to "micro-manage" the conduct of litigation by the city's attorneys. Nor does it deem it either desirable or efficient for the council to review every single written settlement offer in all pending cases against the city, regardless of merit. There are claims, however, that, for reasons of policy or financial impact, call for greater review by the council as the city's chief policy-making body and the adopter of the city's budget. Further, it is imperative that, in those instances where the executive branch refuses, for whatever reason, to even consider settlement, but where the council determines that settlement should be pursued, one branch of city government must have the power to make and enforce a settlement decision on behalf of the city. That body is, by charter, the council.

Therefore, the purpose of this ordinance is to: 1) establish a procedure by which the council can specify those claims against the city for which all written settlement offers must be transmitted to the council for review and decision; 2) establish a time period for the transmittal of all such proposals to the council; 3) require the city's legal representative to obtain the recommendation of the city agencies and officials affected by the proposed settlement and transmit the recommendation in writing to the council; and 4) clarify and affirm that where the council makes a decision to settle a claim, the decision is binding on all agencies, officials and employees of the city, and the city's legal representative is required by law to carry out the council's decision without delay and without interference from the executive branch officials.

(Emphasis in original.)

Then-Mayor Fasi vetoed Bill No. 91 on October 13, 1993, and the council overrode the mayor's veto by an eight-to-one vote on October 20, 1993. Bill 91 then became Ordinance No. 93-78, which, as passed, read in pertinent part as follows:

Procedure governing council approval for the settlement of claims against the city.

(a) Except as otherwise provided in Section 2-3.1(d), ² no claim shall be adjusted, settled, or compromised without the prior approval of the council.

(b) The council shall determine and specify from time to time, by resolution, claims for which all written offers of settlement are to be transmitted to the council by legal counsel....

....

(c) The council may, after deliberation in executive session, accept or reject the offer, or propose a counter-offer. If the council decides to accept the offer of settlement, the council shall do so by adopting a committee report or a resolution specifying the terms of settlement.... The decision of the council to accept a settlement offer shall be binding on the city and on legal counsel....

....

(e) Definitions. For the purposes of this section:

....

"Claim" includes any claim, demand, debt, dispute or other matter in favor of or against the city, its agencies, officers or employees, initiated, brought or made by any person as defined in Section 1-4.1, or any federal or state agency. The term includes claims for injunctive, declaratory and extraordinary relief.

Ordinance No. 93-78 (1993). ³

Thus, in combination with ROH § 2-3.1(d), which vests power in the corporation counsel to settle claims against the city for $5,000.00 and less, Ordinance No. 93-78 (1993) effectively vests exclusive power in the council to settle claims in excess of $5,000.00, as well as suits for injunctive, declaratory, and extraordinary relief.

Prior to October 20, 1993, when the ordinance at issue in the present case was passed by the City Council, the...