Dillon v. City of Davenport, 84-691

• Decision Date: 17 April 1985
• Docket Number: No. 84-691,84-691
• Parties: William DILLON, Appellee, v. CITY OF DAVENPORT, Iowa, Appellant.
• Court: Iowa Supreme Court

Page 918

366 N.W.2d 918

William DILLON, Appellee, v. CITY OF DAVENPORT, Iowa, Appellant.

No. 84-691.

Supreme Court of Iowa.

April 17, 1985.

James L. Abshier, Sioux City, and Scott Hartsook, Acting Corp. Counsel, Davenport, for appellant.

Robert A. Van Vooren and Dana M. Craig of Lane & Waterman, Davenport, for appellee.

Considered by UHLENHOPP, P.J., and McCORMICK, SCHULTZ, CARTER and WOLLE, JJ.

SCHULTZ, Justice.

This is an appeal and cross-appeal from the judgment ordering specific performance of an agreement between the City of Davenport, as employer, and William Dillon, a city employee. The trial court ordered the City to honor an agreement entered into by its attorney to pay $150,000 to its employee in settlement of his workers' compensation claim. On appeal the City asserts the agreement is not enforceable. The employee cross-appeals and claims he was entitled to an award of interest. We affirm.

On May 15, 1982, Dillon, the City's Director of Purchasing, suffered a heart attack. He maintained it was compensable under workers' compensation and with the aid of his attorney, John J. Carlin, filed a claim for arbitration with the Iowa Industrial Commissioner. The employee had worked closely with the City's legal department. To avoid any conflict, the city council hired a private attorney, Elliot R. McDonald, Jr., to represent the City on the compensation claim. McDonald specializes in litigation involving personal injury claims in workers' compensation and tort.

McDonald proceeded to investigate the claim by deposing the employee's physician. The doctor opined that the heart problem was job related. At the time of the deposition the attorneys discussed settlement possibilities; however, Carlin did not wish to enter negotiations unless McDonald had authority from the City to make a settlement. As a result of this conference, Carlin addressed a letter to McDonald asserting a demand of $186,000. McDonald met with the City Council in a session closed pursuant to Iowa Code section 28A.5(1)(c). ¹ The Council discussed a letter that McDonald had written outlining his evaluation of the case and requesting settlement authority up to the sum of $150,000. The Council voted on two alternatives and by a 6-2 vote favored giving McDonald the following authority:

[W]e give him direction and authority to settle up to the amount of $150,000 as recommended in his letter on the condition that he deal with the settlement in terms over a period of time, and announce in the negotiation in the settlement that we do not have $150,000 or $130,000 or $125,000 or whatever figure he would discuss at this point.

Following his meeting with the Council, McDonald made a written offer of settlement of the employee's claim for the sum of $85,000. Carlin was concerned about whether McDonald was authorized to settle the case because he had previously received some settlement overtures from the City Attorney that were contingent on council approval. Carlin indicated that he did not wish to bid against himself. McDonald advised Carlin that he had met with the City Council and had been authorized to settle the case. The attorneys proceeded to negotiate the case, arriving at a settlement in the amount of $150,000, to be paid in installments.

McDonald and Carlin prepared a joint application for submission to the Industrial Commissioner, pursuant to Iowa Code section 85.35, providing that the City would pay $150,000. An additional provision that would have allowed the employee to continue participating in the City's health insurance program at his own expense was also placed in the agreement. This later provision was added after the original settlement agreement and was cleared with the City Attorney and City Administrator who indicated this had been done in other cases in which employees had been terminated. When the joint application was presented to the City Council acting as the City of Davenport, the terms of the settlement were rejected, and McDonald was instructed to withdraw all offers of settlement.

The employee commenced the present equitable action seeking specific performance of the settlement agreement. Prior to trial, through discovery ordered by the court over objection, plaintiff was permitted access to a transcript of tape recordings of closed sessions of the City Council at which his case was discussed. At trial McDonald and Carlin testified that they understood the agreement to be within the scope of the authority given to McDonald, while council members testified they understood that any negotiated agreement was to be submitted to them for approval.

The trial court ordered specific performance of the agreement with the exception of the term concerning plaintiff's continued participation in the City's health insurance plan. The court found that this term exceeded the scope of McDonald's negotiation authority. No interest was awarded on the judgment.

The City appeals and plaintiff cross-appeals from the trial court's decree enforcing the oral agreement to settle the workers' compensation case for the sum of $150,000. The City asserts: (1) that the court should not have permitted discovery of a transcript of a tape recording of a closed session of the city council; (2) that the agreement is not enforceable when not formally adopted by the city council in open session; (3) that the settlement agreement was beyond the actual or apparent authority of the attorney who negotiated it on the City's behalf; (4) the City had a right to a reconsideration or rescission of authority granted its attorney to settle, assuming arguendo that it was otherwise enforceable; (5) that under Iowa Code section 85.35 the agreement was invalid when not approved in writing; and (6) that the approval of the Industrial Commissioner required by section 85.35 constitutes a condition precedent rendering the agreement unenforceable in the absence of approval. Plaintiff's only complaint is that the order of specific performance of the agreement constitutes a money judgment upon which interest should have been awarded pursuant to Iowa Code section 535.3.

I. Discovery of transcript of closed session. The City challenges the trial court's pre-trial ruling granting plaintiff's request for production of a transcript of the closed session of the City Council meeting when the Council met with McDonald. The court concluded that the minutes of this meeting with its attorney were discoverable because an issue in the case concerned the authority of the attorney to negotiate the settlement. The court did provide a protective order preventing disclosure by counsel and allowed the City the opportunity for an in camera hearing with the court concerning protected attorney work product. The City urges that Chapter 28A (1983) requires that the records be sealed and unavailable for public inspection and that a plaintiff should not be able to examine a confidential record merely by filing a lawsuit and issuing a subpoena.

While section 28A.5 provides specific direction concerning the preservation of the occurrences in a closed session and details the extent to which the minutes or a recording of the meeting may be disclosed, it does not specify that the discussions at the closed meeting acquire the status of confidential communications which are privileged from any use other than that specified. Subsection 28A.5(4) does provide that such matters "shall be sealed and shall not be public records open to public inspection," except in an enforcement action after examination by the court in camera; this is not an enforcement action. On the other hand, our discovery rule provides that the parties "may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action." Iowa R.Civ.P. 122(a). Unquestionably the oral authority provided by the Council to its attorney is relevant evidence on the issue of the attorney's authority to settle the case in question. The City does not raise the question of confidential communication between attorney and client as an issue in this appeal.

We must resolve whether the requirement of a sealed record under subsection 28A.5(4) should give way to the broad right of discovery allowed by rule 122(a). Under the limited circumstances of this case, we conclude the trial court correctly denied the City's attempt to shield its action in closed session from discovery by reliance on subsection 28A.5(4). In so doing we are aware that the tape recording of the session does not become a public record open to public inspection. Telegraph Herald, Inc. v. City of Dubuque, 297 N.W.2d 529, 535 (Iowa 1980).

We have conflicting statutes which provide opposite messages. When statutes conflict we attempt to harmonize them in an effort to carry out the meaning and purpose of both statutes as the legislature intended. One obvious legislative purpose of a closed session law is to give the legislative body the opportunity to discuss litigation strategy with counsel without providing the information to litigation opponents. § 28A.5(1)(c) This is especially vital in establishing settlement strategy. The need for secrecy, including sealed tapes and minutes of the meeting, no longer exists when the negotiations cease, which happened in this case when the parties' attorneys consummated a settlement. At the same time, the need to lift the veil of secrecy comes into being when settlement negotiations end with a settlement which is rejected and new litigation, in the form of a suit to enforce the settlement, erupts. The trial court carefully weighed the statute providing for sealed records against the discovery rule allowing an adverse party access to information and struck a proper balance by accommodating the right to discovery without jeopardizing the purposes of section 28A.5(4). Under these limited facts we find no error.

II. Validity of closed session action. The City asserts that plaintiff cannot rely...