Fernandez v. City of Miami

• Decision Date: 04 June 2014
• Docket Number: 3D11–1253,Nos. 3D11–2735,3D11–1904.,s. 3D11–2735
• Citation: 147 So.3d 553
• Parties: Jorge L. FERNANDEZ, Appellant, v. The CITY OF MIAMI, Appellee.
• Court: Florida District Court of Appeals

147 So.3d 553

Jorge L. FERNANDEZ, Appellant
v.
The CITY OF MIAMI, Appellee.

Nos. 3D11–2735
3D11–1253
3D11–1904.

District Court of Appeal of Florida, Third District.

June 4, 2014.
Rehearing Denied Oct. 9, 2014.

147 So.3d 554

Ross & Girten and Theresa L. Girten, Miami, for appellant.

Stearns Weaver Miller Weissler Alhadeff & Sitterson, and Gerald E. Greenberg, Robert T. Kofman and Geri Fischman Satin, Miami, for appellee.

Before SHEPHERD, C.J., and WELLS and SALTER, JJ.

Opinion

SALTER, J.

Former City of Miami City Attorney Jorge L. Fernandez appeals a final judgment and orders on attorney's fees and costs entered against him after a non-jury trial. Mr. Fernandez, plaintiff below, sought $274,721 in severance, vacation, and sick leave payments from the City in a breach of contract action. Mr. Fernandez's lawsuit followed his plea of nolo contendere and adjudication of guilt on two charges of knowingly making false claims for reimbursement to the City's Finance Department while serving as City Attorney, and the termination of his employment following the adjudication of guilt.

The City denied liability to Mr. Fernandez, raised numerous affirmative defenses against his claim, and counterclaimed for breach of fiduciary duty, fraud, breach of oath of office, civil theft, and conversion. Following three days of trial, which featured numerous documentary exhibits and the testimony of nine witnesses, the trial court entered a detailed final judgment denying Mr. Fernandez's claim and awarding damages to the City on its counterclaims. Judgments against Mr. Fernandez for attorney's fees and costs followed. For the reasons described below, we affirm each of the judgments and orders.

I. The Facts Established at Trial

A. Appointment and Initial Salary/Benefit Summary

The City Commission appointed Mr. Fernandez to serve as City Attorney in July 2004. A complete written employment agreement was not prepared and signed; instead, the City Commission approved the appointment in a resolution with a single page summary listing a salary, leave time allowance, insurance benefits, expense allowance amounts, deferred compensation, retirement, severance, and relocation and household goods moving expenses. The provision regarding severance stated:

At time of separation, the City Commission may consider the payment of six months compensation as severance, at its discretion.

The 2004 summary also provided for expense reimbursement of Mr. Fernandez's “reasonable expenses not to exceed $5,000 per year.” The single page summary did not include such terms as a description of duties, prohibition of other work and income, status following death or disability, effect of conviction for crimes or incarceration, breach, or dispute resolution, for example. The single page summary was approved in September 2004. In December 2005, the Commission reappointed Mr. Fernandez.

City policy and practice with respect to expense reimbursement for its key officers required an election between two alternatives: the officer could have the monthly amount included in the regular salary checks (in which event it would be subject

147 So.3d 555

to federal income taxes), or the officer could provide itemized reimbursement requests for only those expenses allowed by City policies and incurred in connection with the officer's official business for the City. Under the latter alternative, which Mr. Fernandez elected for the years at issue here, purely personal expenses and certain categories of expenses (alcoholic beverages, for example) were not reimbursable.

B. Expenses Incurred Before the July 2006 Renewal

Mr. Fernandez's assistant testified that Mr. Fernandez would keep receipts at home and bring them to the office after several months, and his assistant would then organize them chronologically. Mr. Fernandez instructed the assistant to pick out the larger ones and then others to add up to the maximum pro rata amount allowed for the months. The objective was to consume the allowed amount without itemizing the receipts or indicating the relationship to the City's business.

Mr. Fernandez submitted the bundled receipts with a personal memorandum, which he initialed, stating:

Attached please find expenses incurred by me, which I have determined are necessary in the performance of my duties. I have attached receipts for a client meeting/dinner at which I hosted prospected [sic] applicants, expert witnesses, colleagues, clients and/or individuals with whom I have had the need to confer regarding issues which I am involved as the City Attorney. The total amount due me is $_______.

In May of 2005, the second sentence of Mr. Fernandez's cover memo for reimbursements was amended to: “I have attached receipts for meetings, dinners at which I hosted prospective applicants, expert witnesses, colleagues, clients or other individuals with whom I have had the need to confer regarding issues with which I am involved as the City Attorney.” The balance of the memo was not changed. When asked to provide more detail for meeting expenses, such as the identity of the attendees and the subject, Mr. Fernandez said that the meetings were privileged and confidential and that he could not provide those details.

By August 2006, the City finance director asked for an additional term in the reimbursement cover memo: “All expenses incurred and submitted herein for reimbursement were made in accordance with City policy.” The finance director testified that she relied on Mr. Fernandez to be truthful in his reimbursement requests to the City.

C. The July 2006 Modifications and Resolution

In mid–2006, Mr. Fernandez sought an increase in compensation and benefits. He prepared a memorandum evaluating his own performance, but to be sent by a City Commissioner to the other members of the Commission and the Mayor. The memorandum listed a number of perceived accomplishments and included a one-page “side by side” comparison of Mr. Fernandez's “present” and “proposed” salary and benefits. The single page comparison sheet included 20 categories relating to salary, leave time, insurance, and other benefits. Near the bottom of the list, the provision for severance was to be amended to state, “At time of separation, payment of six months compensation as severance.” As noted previously, that term had been conditional since 2004—“the City Commission may consider” the payment of a six-month severance.

In July 2006, the City Commission considered and adopted a resolution approving the new terms by a vote of three to two. The resolution did not include the

147 So.3d 556

“side by side” comparison, but was instead based on a single-page summary that listed only the proposed new terms. The minutes of the Commission's discussion and vote on Mr. Fernandez's new terms, thirteen pages, include a single comment by one Commissioner about the proposed change in the severance term: “I think it's [the proposed salary increase] around 15 percent, excluding the value of the increased vacation and the guaranteed severance change ....”

Unsurprisingly, there was no discussion regarding whether the severance would or would not be payable in the event Mr. Fernandez was convicted of a crime or theft involving City funds. There was no independent legal review, on behalf of the City, of the proposed changes. There was no suggestion by Mr. Fernandez that such a review would be appropriate. There was no disclosure during the Commission meeting that the memorandum from a Commissioner describing Mr. Fernandez's job performance had actually been authored by Mr. Fernandez. And importantly, the record includes evidence that only one person at that Commission meeting—Mr. Fernandez—was aware that he had been charging prohibited personal and family expenses for presentation to the City as allowed and reimbursable expenses.

D. The August and September 2006 Reimbursement Requests

Two false reimbursement requests later became the subject of Mr. Fernandez's criminal charges, plea agreement, and conviction.¹ An August 2006 memorandum sought (and resulted in) reimbursement for a $530.00 dinner at a Manhattan steak house for Mr. Fernandez, his wife, his son, and his son's girlfriend, on a Saturday night for a family celebration that did not involve any City business. The following month, Mr. Fernandez submitted a memorandum which sought (and resulted in) reimbursement for a 45–person Sunday brunch at a Miami restaurant for another family celebration that did not involve any City business.

The further evidence at trial presented by the City to prove expense account fraud showed that Mr. Fernandez had taken 27 out-of-state trips between September 2004 and September 2007, including conferences in Honolulu, Las Vegas, Washington, D.C. (eight trips), Chicago (five trips), and New Orleans. These trips by Mr. Fernandez resulted in travel and lodging expenses exceeding over $34,400, above and beyond the $10,000 per year expense allowance, and also took him away from the office for some 65 days (which were not charged to vacation or personal leave days).

E. Investigation, Negotiation, Termination

...