Fannon v. City of LaFollette

• Decision Date: 21 December 2010
• Docket Number: No. E2008-01616-SC-R11-CV.,E2008-01616-SC-R11-CV.
• Citation: 329 S.W.3d 418
• Parties: Bob FANNON, Individually and as a City Councilman for the City of LaFollette v. CITY OF LAFOLLETTE, et al.
• Court: Tennessee Supreme Court

329 S.W.3d 418

Bob FANNON, Individually and as a City Councilman for the City of LaFollette

v.CITY OF LAFOLLETTE, et al.

No. E2008-01616-SC-R11-CV.

Supreme Court of Tennessee, at Knoxville.

Sept. 2, 2010 Session.

Dec. 21, 2010.

David H. Dunaway, LaFollette, Tennessee, for the appellant/plaintiff, Bob Fannon.

J. Stephen Hurst, LaFollette, Tennessee, for the appellants/defendants, Hansford Hatmaker, Mike Stanfield, and Ken Snodderly.

Jon G. Roach and Emily A. Cleveland, Knoxville, Tennessee, for the appellee/defendant, the City of LaFollette.

OPINION

GARY R. WADE, J., delivered the opinion of the Court, in which CORNELIA A. CLARK, C.J., JANICE M. HOLDER, and SHARON G. LEE, JJ., joined. WILLIAM C. KOCH, JR., J., filed a separate opinion concurring in part and concurring in the judgment.

GARY R. WADE, J.

An elected council member of the City of LaFollette filed a declaratory judgment action alleging that three other members of the council had violated the terms of the Open Meetings Act in the process of adopting a resolution to increase the pay of various city employees. The trial court, after a hearing, granted a temporary restraining order, restricting implementation of the pay raises until the City complied with the procedural requirements of the City Charter. The order did not address the Open Meetings Act allegations. At a subsequent meeting, the Council, apparently in accordance with the requisite guidelines, approved the pay raises. After the Plaintiff filed a motion for summary judgment and then a motion seeking attorney's fees and costs, the trial court dismissed the Open Meetings Act claim as moot, but awarded fees and costs to the council member who had initiated the suit. The order did not address a challenge by the City to the council member's standing to sue. On direct appeal by the City, the Court of Appeals confirmed that the council member had standing as a taxpayer, rather than in his official capacity, but reversed the award of attorney's fees and costs. Because the litigation involves issues of public interest, this Court granted an application for permission to appeal. We hold that the council member had no standing to sue as a council member or a taxpayer, but that he did have standing based upon his allegations of an Open Meetings Act violation. As the prevailing party, he is entitled to an award of discretionary costs, but not attorney's fees. The judgment is, therefore, affirmed in part and reversed in part, and the cause is remanded to the trial court for further proceedings consistent with this opinion.

Facts and Procedural History

On July 10, 2007, Bob Fannon (the "Plaintiff"), a councilman for the City ofLaFollette, filed a suit for declaratory judgment,¹ contending that councilmen Hansford Hatmaker and Mike Stanfield, named as defendants individually and in their official capacities (the "Defendants"), violated the Tennessee Open Meetings Act, Tenn.Code Ann. §§ 8-44-101 to -111 (2002 & Supp.2010),² by meeting informally with certain city employees to discuss pay raises and to consider candidates for vacancies in the offices of City Clerk and Treasurer. A third council member, Ken Snodderly, who ultimately voted in favor of the pay raises, was also named as a Defendant, both individually and in his official capacity; the City of LaFollette (the "City") was also included as a defendant.³ As to the informal meeting at issue, the Plaintiff more specifically alleged as follows:

[P]rior to June 28, 2007, and at a time when the City Administrator was away from the City ..., the Defendants, Hansford Hatmaker and Mike Stanfield, met with various employees at [a City] meeting room, at which time raises were planned for certain employees of the City ... and discussions were held for the filling of the positions of City Clerk and City Treasurer. That at the end of the meeting, a decision was made that a motion would be introduced at the next City Council meeting ... to include pay raises, as well as the filling of positions by the City ....

(Emphasis added).

The Plaintiff contended that "the discussions concerning pay raises and the filling of positions with the City ... were of such pervasive importance that proper notice concerning these discussions should have been given to the general public, as well as to the Mayor, the entire City Council, and the City Administrator ... in accordance with" the Open Meetings Act, which requires "adequate public notice" prior to meetings of a governmental body. Tenn.Code Ann. § 8-44-103(a). The Plaintiff, who also sought attorney's fees and costs as a part of the claim, demanded that the actions be declared void and that a temporary restraining order be issued prohibiting the Defendants from granting pay increases to the selected employees.

The Plaintiff also filed a motion for a temporary injunction, requesting that the Defendants be restricted from granting the pay raises or otherwise amending the budget "without compliance with [the] Open Meeting Act." While the caption of the motion used the term "temporary injunction," the Plaintiff's supporting memorandum made reference to a "temporary restraining order." ⁴ At the hearing onthe Plaintiff's motion, Brad Myers, the Data Processing Manager for the City, acknowledged that Hatmaker and Stanfield had initiated a meeting to discuss his salary shortly before a regularly scheduled Council meeting on June 28, 2007. Myers, who confirmed that the meeting was not a "called meeting" because the public had not been invited to attend, testified that the Defendants participated in the discussions and that Hatmaker offered him a salary of $25,000, which Myers refused.

David Young, the City Administrator, testified that he had not made any recommendations with regard to the pay raises at issue. The LaFollette City Charter, which was made a part of the record during Young's testimony, provides that one of the City Administrator's duties is to make recommendations to the Council for salary adjustments to city employees.⁵

Other Charter provisions were pertinent to the ruling by the trial court. Article IV establishes the City Council, consisting of the City Mayor and four members of Council, and vests the Council with "all corporate, legislative, and other powers of the city, except as otherwise provided in this charter." Section 4 of Article IV requires that "[t]he City Council ... exercise its powers only in public meetings." Article V of the Charter, which allows the Council to appoint an Administrator and lists the requirements of that position, specifically provides that "[i]t shall be the duty of the Administrator to supervise and coordinate all administrative activities of the affairs of the city under the City Council." Section 4 of Article V further specifies that the Administrator has the duty to (a) "recommend to the City Council the employment, dismissal, promotion, or demotion of any employee, and to keep personnel files on all employees," and (b) "review, approve, and recommend to the City Council a budget for each department...." Section 5 of Article V directs that the "City Council and its members shall deal with the administrative services of the city only through the City Administrator."

The minutes of the meeting of the City Council on June 28, 2007, also made a part of the record at the hearing, indicate that Defendant Snodderly made the motion to amend the budget to include the pay raises that had been discussed at the earlier "meeting" involving Hatmaker, Stanfield, and other city employees. After some debate, including the strenuous objections of Mayor Cliff Jennings, Snodderly, Hatmaker, and Stanfield voted to approve the motion. The Plaintiff was the lone dissenting vote.

At the conclusion of the proof, the trial court, observing that the Plaintiff had a "twofold argument" (in reference to the Open Meetings Act and the Charter provisions), found that the Defendants had violated Article V of the Charter by failing to advise the City Administrator of the proposed pay raises prior to meeting with the employees and by subsequently approving the raises at the meeting on June 28, 2007. After restricting "any further action to grant these pay raises until there has been compliance with the City Charter ... and a review by the City Administrator and the City Council," the trial court made further observations as follows:

If you look back at Article V ... of the charter, and what the city charter does is they basically incorporate ... the Tennessee Code Annotated language that says what the duties and responsibilities of the city administrator is. Shall have the duty "[t]o administer, supervise and coordinate all administrative activities of the affairs of the city." ... [Y]ou see the word "all," that means all.

....

Nothing is ever said [by the Defendants] to the administrator prior to that meeting. That has to be in conflict with Article V of the charter.

(Emphasis added). The trial court did not make a ruling as to the Open Meetings Act claim.

On August 7, 2007, at the next meeting of the Council following the issuance of the temporary restraining order, the Council approved the proposed pay raises by the same vote of three to one with the Plaintiff dissenting. No issue has been made as to the propriety of the public notice for this meeting or to any lack of compliance with the Charter provisions. On August 13, 2007, the Plaintiff filed a motion for summary judgment with regard to the alleged Open Meetings Act violation. In response, the Defendants claimed that there were genuine issues of fact as to whether the Open Meetings Act had been violated and alleged that no testimony had been presented on the issue. In the alternative, the Defendants asserted the doctrine of mootness, contending that the City Council's action on August 7, 2007, approving the budget amendments was in accordance with law. Holding that the Open Meetings Act claim had become moot as a result of the resolution adopted at the City's August 7,...