Filippone v. Mayor of Newton

• Decision Date: 30 September 1983
• Parties: Vincent FILIPPONE et al. v. MAYOR OF NEWTON et al.
• Court: Appeals Court of Massachusetts

Page 239

452 N.E.2d 239

16 Mass.App.Ct. 417

Vincent FILIPPONE et al. v. MAYOR OF NEWTON et al.

Appeals Court of Massachusetts,

Middlesex.

Argued April 14, 1983.

Decided July 28, 1983.

Further Appellate Review Granted Sept. 30, 1983.

Arthur H. Goldsmith, Boston, for plaintiffs.

Edward J. Barshak, Boston (Daniel M. Funk, City Sol., Helaine E. Honig, Asst. City Sol., Natasha C. Lisman and Judy Meyers, Boston, with him), for defendants.

Before GREANEY, CUTTER and PERRETTA, JJ.

GREANEY, Justice.

The plaintiffs, taxpayers of the city of Newton, commenced this action in the Superior Court, seeking to enjoin and declare invalid an appropriation of $10,000 by the Newton board of aldermen (board) to pay Mr. Edward J. Barshak, an attorney, for legal services. The services were rendered by Mr. Barshak in defense of a civil suit presently pending against Theodore D. Mann, the mayor of Newton. The taxpayers' action named the mayor, the city, Mr. Barshak, several city officials and the board as defendants, alleged that the appropriation was improper on several grounds, and asserted a violation of the open meeting law, G.L. c. 39, § 23B. On cross-motions for summary judgment, a judge of the Superior Court, in a detailed memorandum of decision, dismissed the count of the complaint alleging a violation of the open meeting law on the ground that the complaint was not timely filed as to that claim; held the subject appropriation invalid for lack of any evidence that the expenses had in fact been incurred; and declared that "upon proper receipt of a bill for services rendered by Edward Barshak, the Mayor of Newton and Board of Aldermen shall approve payment unless the fees are found to be unreasonable." Judgment entered, and the plaintiffs perfected this appeal. We reverse the judgment.

The pertinent facts are not in dispute. On March 7, 1980, the mayor fired his secretary, Diana Ossinger. Criminal complaints issued on that same day, charging Ossinger with forty-four counts of larceny, all stemming from the cashing of paychecks by Ossinger for the mayor over a period of several years. Ossinger was acquitted on all the charges later in 1980. She thereafter made a written demand for reinstatement to her job, back wages and benefits. Failing to obtain relief, Ossinger commenced an action against the mayor and the city on June 11, 1981, seeking damages and reinstatement, alleging that her termination was accomplished in a manner which denied her procedural due process of law. In March of 1981, in the interim between Ossinger's written demand and the filing of her lawsuit, the board adopted, and the mayor approved, Newton ordinance no. R-129, ¹ providing for the indemnification and legal defense of certain municipal officers, including the mayor, in civil rights actions.

The mayor was initially represented in the Ossinger litigation by the Newton city solicitor. The city was removed from the lawsuit in July, 1981, when its motion to dismiss was allowed. This left the mayor as the sole defendant. On August 11, 1981, the city solicitor withdrew his appearance, and Mr. Barshak appeared for the mayor in the case. The city solicitor sought an appropriation of $10,000 to cover Mr. Barshak's legal fees. An assistant city solicitor appeared before the board's finance committee on November 23, 1981, in support of that request. The committee went into executive session at the assistant city solicitor's suggestion after she represented to the committee that the appropriation was necessary because of a conflict of interest on the part of the city solicitor and that explanation of the conflict would reveal litigation strategy. After meeting in executive session for about fifteen minutes (these private deliberations constituting the basis for the open meeting law claim ultimately dismissed by the judge) the committee reconvened in open session, held further discussions, and voted in favor of the appropriation. The appropriation was subsequently approved by the full board. The present action was commenced after the board rejected a motion to reconsider its vote.

After judgment entered in the Superior Court invalidating the appropriation and directing the payment of future bills if reasonable, Mr. Barshak submitted an itemized bill for legal services rendered in both the Ossinger litigation and this action in the amount of $13,624.29. The bill was presented to the board by the mayor for approval of payment pursuant to the judgment and the ordinance. A single justice of this court stayed the provision of the judgment ordering payment upon receipt of a bill for Mr. Barshak's services and enjoined the mayor and Mr. Barshak from receiving money from the Newton treasury on account of the bill pending disposition of this appeal.

1. In the Superior Court, the plaintiffs sought, among other relief, a declaration concerning "the entitlement of Mayor Mann to be indemnified under G.L. c. 258, § 9, and Ordinance No. R-129." With respect to the ordinance, the plaintiffs' arguments below focused on whether the city solicitor had a conflict of interest and whether the mayor's action in terminating Ossinger fell within the scope of his employment or was of a character which would preclude indemnification under the ordinance. The judge rejected the plaintiffs' arguments on the scope of employment and conflict issues. He ruled that the second paragraph of ordinance no. R-129 was intended to provide covered officials with a free defense in civil rights cases, either by the city solicitor or by private counsel, without regard to whether those officials would qualify for indemnification under the provisions in the first paragraph of the ordinance dealing with judgments and settlements. As we will explain, the judgment, in effect, approved a plan for the payment of fees for certain legal services which differs from provisions for such payments contained in G.L. c. 258, §§ 9 and 13. These two statutes deal in some detail with the subject of indemnification of public employees and were used as a model for the ordinance. The difference between these statutes and the ordinance raises an important question of law as to the validity of the local provision under principles of home rule. Because of the public interest involved and the uncertainty which would likely result if the question is left unresolved, and to avoid an unjust result, we think the case presents the uncommon situation where an issue first briefed and argued on appeal, and neither raised nor passed upon below, should be decided. See McLeod's Case, 389 Mass. 431, 434, 450 N.E.2d 612 (1983). Cf. Wellesley College v. Attorney Gen., 313 Mass. 722, 731, 49 N.E.2d 220 (1943).

General Laws c. 258, § 9, ² permits public employers to indemnify public employees acting within the scope of their official duties or employment "from personal financial loss and expenses, including legal fees and costs" arising out of intentional torts or civil rights violations. ³ Indemnification under § 9 is prohibited, however, in civil rights cases if the employee "acted in a grossly negligent, willful or malicious manner." General Laws c. 258, § 13, provides for mandatory indemnification of municipal officials on terms virtually identical to those of § 9, in cities and towns which have accepted either § 13 or a predecessor statute (the former G.L. c. 41, § 100I, inserted by St.1975, c. 753, § 3). Newton accepted neither § 13 nor G.L. c. 41, 100I. Accordingly, we confine our discussion of the validity of the ordinance under home rule powers to the interplay between § 9 and the ordinance.

There are several differences between § 9 and the ordinance. First, § 9 contemplates an indemnity from "financial loss and expenses," expressly including "legal fees" within the concept of loss and expense. ⁴ Apart from this indemnity, the statute contains no provision for the payment of legal fees. The statute also expressly forbids indemnification in any civil rights case involving grossly negligent, willful or malicious conduct. As the judge observed, the determination whether this exception to indemnification applies "cannot be made until the verdict is rendered in the Ossinger case." We note that a general verdict for the plaintiff in that case might leave the issue in doubt (as would a settlement). In any event, it appears that the mayor's entitlement to indemnification under § 9 cannot be determined until several pending questions in the Ossinger case are decided. ⁵ The ordinance, however, as interpreted by the judge, allows payment of attorney fees prior to any decision on the exception's applicability and without any provision for recovery of monies paid in cases where it is determined that the exception applies. Indeed, as construed, the ordinance confers the right to payment of attorney fees even on those who are not eligible for indemnification for judgments or settlements because of the exception.

Second, § 9 allows indemnification from "loss and expenses " (emphasis supplied), as distinguished from indemnification from liability. There is, in the law of other jurisdictions, a clear, pervasive and well-established distinction between obligations of indemnity "from loss" and "from liability." Under this distinction, the rights of an indemnitee "from loss" mature only when he has sustained a loss by actual payment, whereas an indemnitee "from liability" has a right to indemnification when that liability becomes fixed and established, without regard to whether an actual loss through payment has occurred. ⁶ See Gribaldo, Jacobs, Jones & Associates v. Agrippina Versicherunges A.G., 3 Cal.3d 434, 446, 91 Cal.Rptr. 6, 476 P.2d 406 (1970); Moberly v. Leonard, 339 Mo. 791, 800, 99 S.W.2d 58 (1936); North v. Joseph W. North & Son, 93 N.J.L. 438, 441, 108 A. 244 (1919); Potter v. Wilson, 609 P.2d 1278, 1280 (Okl.1980); National Sur. Corp. v. First Natl. Bank, 424 S.W.2d 27, 29 (Tex.Civ.App.), rev'd on other grounds, 431 S.W.2d...