Powers v. Goodwin

• Decision Date: 17 May 1982
• Docket Number: Nos. 15445,15446,s. 15445
• Citation: 170 W.Va. 151,291 S.E.2d 466
• Court: West Virginia Supreme Court
• Parties: Cecil POWERS, et al. v. James R. GOODWIN, et al. (Two cases).

Page 466

291 S.E.2d 466

170 W.Va. 151

Cecil POWERS, et al. v. James R. GOODWIN, et al. (Two cases).

Nos. 15445, 15446.

Supreme Court of Appeals of West Virginia.

May 17, 1982.

Syllabus by the Court

1. In order to determine the standard of proof required to remove a member of a county commission or to hold him personally liable for misappropriated funds, W.Va. Code, 11-8-26 [1963], 11-8-29 [1933] and 11-8-31 [1933] must be read in pari materia. Under these sections a commissioner may be removed from office upon proof of negligent misappropriation and can be required to reimburse the county upon proof of wilfull misappropriation.

2. Where a county official incurs a loss in the discharge of his official duty in a matter in which the county has an interest, and in the discharge of a duty imposed or authorized by law and in good faith, the county has the power to appropriate funds to reimburse him, unless expressly forbidden.

3. The rules governing whether a public official is entitled to indemnification for attorneys' fees are the same in both the civil and criminal context. In order to justify indemnification from public funds the underlying action must arise from the discharge of an official duty in which the government has an interest; the officer must have acted in good faith; and the agency seeking to indemnify the officer must have either the express or implied power to do so.

4. Where a neutral public body elects to indemnify one of its employees or another elected public official for attorneys' fees incurred as a result of their official duties there is a presumption that such indemnification was made in good faith; however, no such presumption of good faith arises where a public body elects to indemnify one or all of its own members for attorneys' fees absent an attorney general's opinion or a court order.

5. The public as a whole has an interest in seeing duly elected officials continue in office and where members of a county commission are made defendants in a removal proceeding as a result of actions taken or omitted in the good faith discharge of their official duties, they are entitled to reimbursement for their attorneys' fees.

William L. Jacobs, Parkersburg, for appellants in 15445 and appellees in 15446.

Peter A. Hendricks, Madison, for appellees in 15445 and appellants in 15446.

NEELY, Justice:

We have before us a case involving alleged official misconduct that raises complex issues about the payment of attorneys' fees by a local fiscal body when actions are brought against members or employees of that body in their official capacity. This case is important because we have not previously spoken in West Virginia to the issue of attorneys' fees incurred in litigation arising from the performance of official duties.

This is an appeal from an order of the Circuit Court of Boone County in a case where plaintiffs below, Cecil Powers, etc., sought to remove defendants below, James R. Goodwin, Ed Cooke, and James W. Armstrong from the County Commission of that county. The grounds asserted for removal were that the members of the Boone County Commission, with defendant James R. Goodwin abstaining, voted to pay $14,547.64 to defendant James R. Goodwin to reimburse him for attorneys' fees expended in defense of preliminary criminal proceedings before a Boone County grand jury and subsequently in defending a petition to remove Commissioner Goodwin from office. The threatened criminal action arose from Commissioner Goodwin's alleged misuse of a county commission telephone credit card.

The court below concluded that the defendants Ed Cooke and James W. Armstrong authorized an unlawful expenditure of county money for an unauthorized purpose under the provisions of W. Va. Code, 11-8-26 [1963], but that since such expenditure was arguably made in good faith in reliance upon an erroneous written opinion on the matter from the assistant prosecuting attorney of Boone County, the expenditure was not a removable act under W. Va. Code, 11-8-31 [1933]. The plaintiffs below now appeal this determination on the grounds that if the expenditure was unauthorized, the defendant commissioners should have been removed.

The defendants below, however, did not survive this proceeding unscathed. The trial court concluded that since the expenditure for attorneys' fees was unauthorized, defendant James R. Goodwin is primarily liable for the repayment of that amount and the other defendant commissioners are secondarily liable and must repay the county $14,547.64 in event that James R. Goodwin defaults on his primary obligation. Defendants below appeal the money judgment on the grounds that the attorneys' fees were paid in good faith upon reliance on a written opinion from the statutory attorney for the county commission, and that, therefore, defendants Armstrong and Cooke are not personally liable for expenditures approved by them in good faith.

The trial court disposed of this case on summary judgment. The amount of attorneys' fees was stipulated; the reasons for Mr. Goodwin's incurring the attorneys' fees were stipulated; the written opinion of the assistant prosecuting attorney of Boone County was before the court; and, while the element of good faith was central to many of the conclusions necessary to the resolution of this case, neither plaintiffs nor defendants asked to introduce any evidence on that subject, relying instead on circumstantial evidence already before the court.

Unfortunately, the trial court's decision in this case is inconsistent with the law. Essentially, if the defendants were sufficiently culpable to be required to repay the money personally, they were sufficiently culpable to be removed from office. Under our statutes, a county commission member can be removed from office upon a lower standard of proof than that required to make him personally liable for misappropriated funds. Consequently, we must reverse and remand the case for further proceedings consistent with this opinion.

I

There are three statutes at issue in this case. The first is W. Va. Code, 11-8-26 [1963] that provides:

Except as provided in sections fourteen-b, twenty-five-a and twenty-six-a [ §§ 11-8-14b, 11-8-25a] of this article, a local fiscal body shall not expend money or incur obligations:

(1) In an unauthorized manner;

(2) For an unauthorized purpose;

(3) In excess of the amount allocated to the fund in the levy order;

(4) In excess of the funds available for current expenses.

Notwithstanding the foregoing and any other provision of law to the contrary, a local fiscal body or its duly authorized officials shall not be penalized for a casual deficit which does not exceed its approved levy estimate by more than three per cent, provided such casual deficit be satisfied in the levy estimate for the succeeding fiscal year.

The second statute at issue is W. Va. Code, 11-8-29 [1933] that establishes the standard of proof required to create personal liability on the part of a county commission member. That statute provides:

A person who in his official capacity wilfully participates in the violation of sections twenty-five [ § 11-8-25] and/or twenty-six [ § 11-8-26] of this article shall be personally liable, jointly and severally, for the amount illegally expended. [Emphasis supplied by Court]

The third statute at issue is W. Va. Code, 11-8-31 [1933] that sets forth the standard of proof for a criminal prosecution or removal from office. That statute provides:

A person who in his official capacity wilfully violates the provisions of this article shall be guilty of a misdemeanor, and upon conviction shall be fined not more than five hundred dollars, or confined in jail not more than one year, or both. Upon conviction he shall also forfeit his office....

The State, a taxpayer, or the tax commissioner may institute and prosecute to final judgment any proceeding for the removal of a member of a local fiscal body who has wilfully or negligently violated any of the provisions of this article.... [Emphasis supplied by Court]

When we read these statutes together it can be observed that a "wilful" violation is required for either a criminal prosecution or a successful action to establish personal liability against a county officer. However, Code, 11-8-31 [1933] allows removal of the county officer if he "negligently" misappropriates money. The court below found that the defendant commissioners acted in "good faith" and, therefore, could not be removed. However, the court went on to find that since the appropriation was unlawful, the defendant commissioners should be required to repay the money personally. Succinctly stated, the principle that the court misapplied is this: if the defendant commissioners were sufficiently culpable that they should be required to repay the money, they are obviously sufficiently culpable to be removed. On the other hand if the defendant commissioners acted both in good faith and non-negligently they should neither be removed nor required to repay the money. The intermediate ground is the exact opposite of what the court found: namely, that if the defendant commissioners acted in good faith, but negligently, they should be removed from office but should not be required to repay the money. Since no evidence other than the nature of the transactions themselves was introduced on the issue of "good faith" vel non, the court on remand must undertake a minute examination of this question in light of the guidelines set forth in this opinion.

II

The expansion of personal liability on the part of government officers during the last twenty years and the concurrent restriction of the defense of sovereign immunity has made the question of the indemnification of government employees for the expenses of litigation one of increasing public concern. See generally, Berman, "Integrating Governmental and Officer Tort Liability," 77 Colum.L.Rev. 1175 (1977); Shepsle, "Official Errors and Official Liability,"...