Matthews v. City of Atlantic City

• Decision Date: 19 April 1984
• Parties: Michael J. MATTHEWS, as Mayor of the City of Atlantic City, and Michael J. Matthews, Individually, Plaintiff, v. CITY OF ATLANTIC CITY, Henry Tyner Arnold Orsatti, James Wheelan, Harold Mosee, Walter Collette, Gene Dorn, John Whittington, John Mooney and James Sykes, Defendants.
• Court: New Jersey Superior Court

Page 145

196 N.J.Super. 145

481 A.2d 842

Michael J. MATTHEWS, as Mayor of the City of Atlantic City and Michael J. Matthews, Individually, Plaintiff, v. CITY OF ATLANTIC CITY, Henry Tyner Arnold Orsatti, James Wheelan, Harold Mosee, Walter Collette, Gene Dorn John Whittington, John Mooney and James Sykes, Defendants.

Superior Court of New Jersey, Law Division Atlantic County.

Decided April 19, 1984.

Edwin J. Jacobs, Jr., Atlantic City, for plaintiff (Tort, Jacobs, Gross & Todd, Atlantic City).

Dennis J. Braithwaite, P.A., Atlantic City, for defendants.

GRUCCIO, A.J.S.C.

This action seeks to compel the defendants to authorize the payment of legal expenses incurred by plaintiff in his successful defense of an election contest. Both parties have filed motions for summary judgment on the issue of whether the City of Atlantic City must pay the legal expenses of plaintiff.

Plaintiff is the former mayor of Atlantic City, New Jersey and was serving in that capacity when the election contest was filed. The contest consisted of three separate suits, which were consolidated for trial. The first suit alleged malconduct, fraud, mismanagement, and negligence; the second alleged violations of New Jersey campaign laws; and the third alleged violations of New Jersey election laws and specifically challenged the right of plaintiff to simultaneously hold the offices of mayor of Atlantic City and assemblyman of the State of New Jersey. After a trial lasting in excess of four months, judgment was entered in favor of plaintiff in all three actions.

Plaintiff was represented in the prior actions by Richard Alten, Esquire. Alten is an attorney in the Atlantic City area engaged in private practice and unaffiliated with the Atlantic City solicitor's office. Plaintiff claims that he was required to retain private counsel due to the inability of the solicitor's office to provide adequate representation at trial. An affidavit submitted by Matthew H. Powals, City Solicitor of Atlantic City supports plaintiff's contention. Subsequent to the conclusion of the trial, Alten submitted to plaintiff a bill in the amount of $80,710.27 representing costs and attorney's fees. Plaintiff then requested the city council of Atlantic City to authorize payment. City council refused to authorize any payment whatsoever whereupon plaintiff initiated this lawsuit.

In the present case plaintiff is not seeking to enforce an action already taken by defendants but instead is seeking relief in the nature of mandamus to compel them to take action which plaintiff deems nondiscretionary; that is, payment of plaintiff's legal expenses. The determination of whether plaintiff is entitled to the relief requested requires the resolution of two issues; the first being whether defendants could have authorized payment of plaintiff's counsel fees, and the second being whether defendants could be compelled to authorize said payment.

In support of the present motion, plaintiff relies on New Jersey case law, Federal and State Equal Protection provisions, and public policy considerations. For the reasons which follow, however, all of plaintiff's arguments must fail.

The rule in New Jersey is that a municipality has the authority to contract with private individuals for the performance of services which the municipality itself may render. N.J.S.A. 40:48-5. Thus, the first issue is narrowed to whether the office of the city solicitor could have defended the plaintiff in the election contest if it had had sufficient resources at the time. The defense of these actions by the solicitor would have obviously required the expenditure of public funds on the plaintiff's behalf. Such action by the solicitor is only allowed where the defense of the suit constitutes a public purpose. Roe v. Kervick, 42 N.J. 191, 207, 199 A.2d 834 (1964). In Roe, supra, the New Jersey Supreme Court stated that the term "public purpose":

... connotes an activity which serves as a benefit to the community as a whole, and which, at the same time is directly related to the functions of government.... In each instance where the test is to be applied the decision must be reached with reference to the object sought to be accomplished and to the degree and manner in which the object affects the public welfare. (citations omitted). [Id.]

There are no cases in New Jersey which specifically deal with the issue of whether a mayor who successfully defends against an election contest can be compensated by the city for his legal expenses. There are cases, however, which deal generally with the obligation of a municipality to pay the legal fees of its officials.

Several early New Jersey cases have held that a municipality may properly indemnify its officials so long as the expenses are incurred in the performance of official duties or in defense of actions challenging official acts. For example, in State, Lewis, Pros. v. Freeholders of Hudson County, 37 N.J.L. 254 (Sup.Ct.1874), the court held that the county freeholders could indemnify the county coroner for expenses arising from the arrest and transportation of an accused murderer. In a later case it was held that the town council of Hammonton could defend a malicious prosecution suit brought by the prosecutor against a council member who investigated the prosecutor's handling of public monies. State, Bradley, pros. v. Council of Hammonton, 38 N.J.L. 430 (Sup.Ct.1876). The Bradley Court based its holding on the fact that the council member was involved in the bona fide discharge of his duties. It has also been held that a mayor who successfully defended against a suit brought on behalf of the city seeking to compel the mayor to take official actions which he determined to be illegal was entitled to reimbursement for his legal defense. Barnett v. Paterson, 48 N.J.L. 395, 6 A. 15 (Sup.Ct.1886).

The recurring theme in the above line of cases is that an individual must be acting in an official capacity in order for indemnification of expenses to be proper. Indeed, in the Barnett decision, it was held that where the presentation of a legal defense was required of the mayor in fulfilling his official responsibilities, indemnification is not only permissible but mandated. Id. at 398. This court does not interpret the Barnett decision, however, to require that a mayor must be reimbursed by the city for legal expenses every time he is forced to defend against a lawsuit. Implicit in the reasoning of the above cases is the proposition that the mere fact that it is a public official who is involved in the suit is not dispositive. The courts have consistently looked to the subject matter of the underlying suit in determining whether the public may bear the burden of the expense. If the allegations of the law suit itself do not involve the exercise of or the failure to exercise an official duty, the public official is not entitled to indemnification and the appropriation of funds by a city council for such a purpose would be impermissible.

More recent New Jersey cases comport with the policy of indemnifying public officials only for expenses which arise in the performance of an official duty or from actions taken in an official capacity. O'Donnell v. Morris County Freeholder Board, 31 N.J. 434, 158 A.2d 1 (1960) (public body could authorize reimbursement of a public official for expenses incurred in the discharge of his duties); Cobb, et als v. City of Cape May, et al, 113 N.J.Super. 598, 274 A.2d 622 (Law Div.1971), (mayor compensated for expenses incurred in defense of libel suit for statements made in his capacity as mayor even though making statements on behalf of the city was not part of his official duties); Golaine v. Cardinale, 142 N.J.Super 385, 404, 361 A.2d 593 (Law Div.1976) (counsel fees had been allowed to municipal officials in the past "only where the officer required legal defense to justify an action taken in his official capacity and in the performance of his duties." (citations omitted).

An examination of the case law of other jurisdictions reveals a Florida case which arose on virtually identical facts. Markham v. State, Department of Revenue, 298 So.2d 210 (Fla.App.1974). The plaintiff there, the tax assessor of Broward County, Florida, successfully resisted a contest to his election based on a challenge to the validity of certain absentee ballots. In holding that the plaintiff was not entitled to have the attorney's fees he had incurred paid out of public funds, the Florida court made the following observation:

[T]he suit was a pure and simple election contest relating to the validity of certain absentee votes .... had the contestant been successful in his attack upon the votes the appellant would have ceased to be tax assessor and his opponent would have taken office. The office, functions and duties of tax assessor would not have been in any manner altered. There would simply have been another man filling the position. The legal battle between the political contestants in the election contest was purely personal. [Id. at 212.]

The Markham decision also referred to an earlier ruling, Peck v. Spencer, 26 Fla. 23, 7 So. 642 (1890), wherein the Florida Supreme Court held that a town council lacked authority to provide counsel for the acting mayor in an election contest on the ground that: "(S)uch power is not given in its charter, either expressly or by reasonable implication. These contests are personal and the corporation can have no interest in the result, and an appropriation to pay any one of the parties the expenses he may be put to is without legal authority." Peck, supra, 7 So. at 644.

The reasoning of the above cases is persuasive. One of the key issues in the Matthews election contest involved the sufficiency and validity of absentee ballots. In addition, there were allegations of fraud, mismanagement and negligence on the part of plaintiff. All of the wrongdoing charged was alleged to have occurred prior to the election. The...