MUNICIPAL ATTORNEYS NEWSLETTER

Missouri Municipal Attorneys Association

1727 Southridge Drive, Jefferson City, MO 65109                                                                               

573-635-9134, Fax: 573-635-9009                                                                                           

January 08, Issue #1/08

Editor Howard C. Wright

Asst. Editor Ragan Wright          

BEST LAWYERS IN AMERICA 2008. We would like to congratulate municipal attorney Kevin O’Keefe of the Curtis, Heinz, Garrett & O’Keefe law firm, who was selected by his peers for inclusion in The Best Layers in America 2008 in the field of municipal law. Kevin serves as city attorney for many municipalities. He also graciously lends his expertise to the MML and our members through training courses, seminars, and legal research.

CASE OUTLINES (MISSOURI)

SEVERANCE PAY CASE COSTS VILLAGE $400,000. The village of Claycomo (Village) entered into a contract dated March 11, 2003, with the fire chief (Employee) that provided if the Village terminated the Employee without cause as defined in the contract the Employee was entitled to a severance package of five years pay plus benefits. The agreement provided that it could not be amended except by mutual agreement. No term of expiration was provided in the contract although the Employee could be terminated at any time for the reasons stated in the agreement or without cause if severance pay was provided. The Village trustees were concerned that the severance package was too rich and needed to be modified. After negotiating in vain with the Employee, the Village adopted a resolution that declared that the agreement was “void and for naught” and tendered the Employee a new contract with a one-year severance package. The resolution further provided if the new contract was not accepted within 30 days that the new contract would constitute the terms of continuing employment until further changed by the Village. The day after the Village adopted the resolution, the Employee sent a letter stating that the action of the Village in adopting the resolution terminated his employment, demanding his severance pay and refusing to accept the terms of the new contract. Employee brought suit for severance pay. The parties stipulated to the facts and motions for summary judgment were filed. The circuit court granted the Employee’s motion for summary judgment and the Village appealed. The Western District affirmed the holding that granting of severance pay was not unreasonable and the language in the resolution that the agreement was “void and for naught” was a unilateral repudiation of the agreement resulting in the termination of the employment relationship. Stephenson v. City of Claymoco, (WD67533, 12/11/07).

     Comment Howard. Apparently, right before an election the Village trustees increased the severance package from three years to five years. The newly elected trustees were not wild about the terms of agreement and while they could fire the Employee without cause they did not want to compensate the employee with five years of severance pay. This is a bitter pill for the Village to swallow, as the severance pay was approximately $400,000. The case is a stark reminder that all employment contracts need to have a fixed term and provide for renegotiation of all provisions at the end of the term. The bigger policy question is how to prevent negotiation of sweet heart deals by one city council that binds another city council. This is not going to be easy in this brave new world of binding employment agreements. I would avoid if possible individual employment contracts for department heads using this case as the poster child.

ALL PARCELS IN TIF PROJECT DO NOT NEED TO BE INDIVIDUALLY BLIGHTED. The Tax Increment Financing Commission of Kansas City (Commission) condemned land, utilizing provisions of the Real Property Tax Increment Allocation Redevelopment Act (Act). Under the new eminent domain law adopted by the General Assembly in 2006, the Commission had to satisfy provisions of Section 523.274 RSMo, which governs eminent domain and the blighting of property. The circuit court entered judgment authorizing the condemnation of the owner’s property, which was appealed. The owner of the property asserted that the circuit court erred because the condemning authority did not prove that the two parcels that were condemned were individually “considered” and that the City Council did not determine that a preponderance of the individual parcels were blighted. The Eastern District noted that the Act permits a municipality to develop a tax increment project for the purpose of redeveloping an area. Section 523.274 RSMo provides that the condemning authority shall first “individually consider each parcel” with regard to whether or not the property meets the definition of blight in order to condemn the property. If the condemning authority finds a preponderance of the defined redevelopment area is blighted it may proceed with the condemnation. A plain and ordinary reading of the statute discloses that the condemning authority must “individually consider each parcel of property in the defined area with regard to whether or not the property meets the relevant definition of blight.” While the condemning authority is required to “consider” individually each parcel, it is not obligated to find each parcel to be blighted. Second, the condemning authority must find a “preponderance” of the redevelopment area to be blighted. Preponderance means that the total square footage of blighted property is greater than the square footage of the area not blighted. The court also held that the statute does not prevent the condemning authority from using a blight study that is older than five years. What is prohibited is commencing a condemnation action later than five years from the date of the legislative determination of blight. Allright Properties, Inc. v. Tax Increment Financing Commission of Kansas City, (WD68406, 12/18/07).

     Comment Howard. This is a significant victory for economic development proponents. While Missouri does not recognize legislative history, the analysis by the court shows how to use legislative information on the state Web site to show what was added or dropped during the legislative process. From this, the court concluded that the General Assembly during the legislative process dropped certain provisions, or changed provisions allowing the court to conclude certain interpretations were not tenable.

County can not charge 4 PERCENT administrative fee to collect TIF taxes. The city of Desloge (City) filed mandamus action against St. Francois County (County) to collect a 4 percent administrative fee on the TIF revenues collected and retained by the County on TIF taxes. The County contends that an appropriation in the budget of the City showing a 4 percent expenditure for this item constituted authorization under the TIF statute. It also argued that the TIF statute mandating the collection of the revenues violated the mandates provision of the Hancock Amendment. The circuit court granted the writ and the County appealed. On appeal, the Eastern District held that an appropriation in the City’s budget did not constitute authorization under the TIF statute. The evidence was that the County never requested and the TIF commission never authorized this charge. On the Hancock mandates issue, the County failed to prove it had any additional costs since all it showed was the time required by existing personnel to administer the collection of the TIF taxes. The County failed to show that the administration required additional personnel or that it had other out of pockets costs. Judgment affirmed. State ex rel. City of Desloge v. St. Francois County, et al., (ED89807, 12/26/07).

     Comment Howard. If your city has a TIF and the county collects the TIF taxes you need to alert your top administrator about this case to determine if you are entitled to a refund. The court in its opinion, relies on an earlier Supreme Court decision that held that the distribution of tax revenues were part of the normal operations of the county and the additional work was de minimus; therefore no additional duties were imposed by requiring the County to collect TIF taxes. The County tried to distinguish this case from an earlier case by showing the actual costs of work based on allocation of workers to this task. The court held that this showing was not sufficient since the County did not show that it incurred additional costs by adding new employees. While the result in this case is good it seems like this opinion may go one step too far. Under this opinion, you are required to show additional costs in order to prove a violation of the mandates provision of the Hancock Amendment. All the court had to do in deciding this case was rely on the earlier Supreme Court case that held that the county had an existing duty to collect the TIF tax.

Reasonable Accommodation must be offered in disability case. Lomax worked at Daimler-Chrysler (Employer) on the assembly line where he attached a cable to the onboard computer beneath the steering wheel. This required him to continuously bend, kneel, and walk on the cement floor next to the vehicles moving down the assembly line. In December 2001, Lomax went on disability leave that continued until July 2003 when Employer terminated Lomax’s employment. Lomax claimed he had pain in his back, left arm, shoulder, and right leg and foot that prevented him from working. As a result of the pain in his foot, he used a “Cam Walker” boot. In January and October of 2002, he had surgery on his right foot and in 2003 he had surgery on his left elbow and shoulder. Lomax was scheduled for additional surgery in late June of 2003 just before he was terminated. He received disability benefits administered by ESIS. After receiving a tip, ESIS conducted surveillance and determined that Lomax was able to perform a number of tasks like working in the yard, carrying firewood without his Cam boot and without any obvious sign of a disability. Employer reviewed this and other information and fired Lomax for providing false information. Employer filed motion for summary judgment that was sustained and Lomax appealed to the Eastern District. On appeal, the court considered whether or not the Employer offered a reasonable accommodation. Since Employer never considered whether or not a reasonable accommodation was appropriate, Employer lost on the issue of reasonable accommodation which in this case could have been additional time off to recover. Employer claimed that Lomax was estopped to deny that he was disabled because as a condition of receiving social security disability he filed a statement stating that he was totally disabled, completely preventing him from working thereby making it impossible for the Employer to accommodate him due to the total disability. The court rejected this argument on the grounds that this is just one factor among many which must be considered; therefore, summary judgment was inappropriate. The court also reviewed the summary judgment decision under the “contributing factor” recently announced by the Missouri Supreme Court. A “contributing factor” is a condition that “contributes a share in anything or has a part in producing the effect.” Since the Employer did not review or consider all of the information, there were facts in dispute and motion for summary judgment should have been denied. Lomax v. Daimler-Chrysler Corporation, (ED88071, 12/18/07).

     Comment Howard. There is a new sheriff in town and if you have not already informed your HR director you should let him/her know that winning employment discrimination cases in Missouri will be very difficult; therefore, extra care needs to be exercised before the decision is made. The definition of “contributing factor” adopted by the Court is extremely broad allowing as evidence being almost anything that can be connected to an alleged discriminatory act.

RIGHT TO ASSOCIATE WITH DISABLED PERSON PROTECTED UNDER Missouri discrimination laws. Francin began employment with Elsevier (Employer) in 1991. He worked as a production assistant, which entailed doing layouts of medical periodicals in preparation for printing. In 2003, Francin's wife was diagnosed with amyotrophic lateral sclerosis (“ALS”). He discussed his potential rights for leave under the Family Medical Leave Act with a representative from the human resources department. In 2004, Francin's direct supervisor, David Nissen, resigned who was replaced by A.M. Maheswaran. Maheswaran subsequently conducted interviews with several employees. During his interview, on August 17, 2004, Francin informed Maheswaran of his wife's illness and within days, Maheswaran started the process to terminate Francin. On September 21, 2004, Maheswaran informed Francin that he was discharged from his employment with Employer. Francin filed suit under the Missouri Human Rights Act, (Act) alleging that Employer discriminated against him because of his association with a person with a disability, in violation of Section 213.070 RSMo. Employer filed a motion for summary judgment, which was granted. The circuit court found that the undisputed material facts failed to create a genuine issue as to whether or not Francin's association with his wife was a contributing factor to his termination. As a result, the court concluded that Employer was entitled to judgment as a matter of law. Francin appealed to the Eastern District. The Act provided that it was unlawful to “discriminate in any manner against any other person because of such person’s association with any person protected by this chapter.” This provision is without any qualification and is clear and unambiguous. To the extent that the language is different from federal statutes on the same subject, Missouri courts are free to apply their own interpretation. As a threshold matter, the court determined that Francin stated a cause of action under the Act. The evidence showed that Francin had excellent performance evaluations until, the new supervisor arrived. In reviewing the new supervisor’s memorandums on the performance of Francin, the court noted they started with notations about Francin’s wife’s medical condition. Within three days after learning of the condition of Francin’s wife the supervisor puts into motion the process to terminate Francin. The close proximity in time of learning about the medical condition, to the decision to fire Francin is a factor for the trier of fact to consider. Summary judgment is reversed because the facts are in dispute. Under Missouri law, summary judgment in employment discrimination is not favored since these cases are fact based and “often depend on inferences rather than direct evidence.” Francin v. Mosby, Inc., (ED89814, 01/08/08).

     Comment Howard. This case adds significant safeguards to the right of association with persons who are protected under Missouri discrimination laws.

Reasonable grounds to believe driver was driving while intoxicated. When does an officer have “reasonable grounds” to believe that the driver was driving while intoxicated? In a refusal case, the Director was not required to prove that the driver was intoxicated. The Director needed to prove only that the officers involved had reasonable grounds to believe that the driver was driving while intoxicated. In this context, a reasonable ground is virtually synonymous with probable cause. Probable cause to arrest exists when the arresting officer's knowledge of the particular facts and circumstances is sufficient to warrant a prudent person's belief that a suspect has committed an offense. There is no precise test for whether probable cause exists; that determination is based on the particular facts and circumstances of each individual case. The quantum of evidence necessary to establish probable cause is considerably less than that required to prove guilt beyond a reasonable doubt. While mere suspicion is insufficient, absolute certainty is not required. Warner v. Missouri Director of Revenue, (WD67875, 12/11/07).

DRIVER DOES NOT NEED TO REFUSE BLOOD ALCOHOL TEST KNOWINGLY. Frick was driving a truck that overturned on a curve and went off the side of the road. When the officer arrived, emergency personnel were already at the scene administering emergency aid to Frick. The officer smelled a moderate odor of intoxicants coming from Frick. The truck contained an empty six pack of beer and one unopened can of beer. When asked by the office, Frick stated he had consumed three beers. The officer administered a partial gaze nystagmus test while Frick was strapped to a backboard and was receiving oxygen. The officer determined from this partial test that Frick’s left eye lacked smooth pursuit and there was nystagmus at maximum deviation. The officer testified that Frick’s answers to the questions by emergency personnel were not inappropriate or bizarre. The officer in light of this, concluded that Frick was intoxicated and read him the implied consent law requesting that Frick consent to a chemical test of his blood. Frick refused. The trial court, after hearing this evidence, ordered the state to reinstate Frick’s driver’s license. Frick testified that he could not remember any events at the scene of the accident. The trial court concluded that the officer did not have reasonable grounds to believe that Frick was driving while intoxicated and ordered the license reinstated. The Western District transfered on its own motion the case to the Missouri Supreme Court. With respect to the refusal the Missouri Supreme Court held that there is no requirement that the refusal be made knowingly. The evidence was sufficient to establish that the officer had reasonable grounds to believe Frick was driving while intoxicated. The fact that the driver did not remember anything is immaterial since the test is an objective test. Frick v. Director of Revenue, (SC88501, 12/18/07).  

     Comment Howard. Considering the route that this case took to the Supreme Court, this case is a very good case for prosecutors to keep in his/her trial file to show that amnesia by defendant does not defeat the officer’s objective of understanding the facts.

Denial of Use permit by BZA upheld. Martin Marietta Materials, Inc. (MMM) operates a rock quarry in Cass County near the boundary of the city of Peculiar, Missouri. MMM contracted to purchase or lease several pieces of property, totaling 648 acres, adjacent to its current quarry operation that were within an area proposed for annexation by the city of Peculiar. MMM submitted an application under the zoning ordinance of Cass County requesting a special use permit to expand its quarrying activities into this additional area. After adding several conditions to the proposed use, the planning board voted to recommend approval of the special use permit for MMM, though it expressly declined to consider evidence related to whether the proposed activity constituted a nuisance to surrounding landowners and deferred consideration of that evidence to the board of zoning adjustment (BZA). The BZA held a public hearing on MMM's application. It unanimously denied MMM's application for a special use permit, concluding that adequate provision had not been made for the “general compatibility with adjacent properties, other properties in the district, and the general safety, health, comfort, and general welfare of the community” and that the quarry should not be allowed to “expand toward surrounding residential development since this would accentuate the incompatibility of the two land uses.” MMM appealed the BZA's decision to the circuit court of Cass County. The circuit court reversed the decision of the BZA, concluding that the decision was not supported by substantial and competent evidence on the record as a whole and remanded the case to the BZA with instructions to issue the special use permit. This decision was appealed to the Western District. The Western District held that the BZA could consider general compatibility and general welfare when reviewing a special use permit application; that the evidence was sufficient to support determination that proposed expansion was not generally compatible with surrounding property or the general safety, health, comfort, and general welfare of the surrounding community; that the evidence was sufficient to support conclusion that the operator had not made adequate provisions with regard to general welfare or general compatibility; and the BZA decision was not inconsistent with board's findings identifying the conditions under which operator agreed to operate the quarry. The decision of the BZA was supported by competent and substantial evidence and the BZA’s decision denying the use permit was upheld. Martin Marietta Materials, Inc. v. Board of Zoning Adjustment of Cass County, (WD66637, 12/11/07). 

Modot not liable for third party criminal act. MODOT is not liable for third party throwing objects off the overpass on I-70 that resulted in death of occupant of vehicle even though the overpass was not enclosed like other overpasses in the immediate area and that MODOT had noticed that incidents like this might occur. Tucker v. Missouri Highways and Transportation Commission, (WD67892, 01/02/08).

CASE OUTLINES (FEDERAL)

TWO STRIKES AND EMPLOYER IS OUT. You would like to think that being a compassionate employer would pay dividends but sometimes this can go too far. Engel a secretary for the Rapid City School District (Employer) was sexually harassed by Herrera a fellow employee. The Employer learned of the inappropriate actions of Herrera from another employee and asked Engel if she had been harassed by Herrera and Engel responded that she had been. Engel filed a written complaint documenting the harassment. The Employer conducted an investigation and determined that the complaint was justified. The evidence showed that the harassment was very extensive and covered multiple employees. Employer punished Herrera by not paying him for the time he was suspended while the investigation took place, which resulted in the loss of a little over one month’s pay, and placed Herrera on probation with conditions and a warning that future inappropriate behavior would result in his termination. When a second incident arose, Engel reported the incident to the Employer who investigated the incident and again suspended Herrera. Eventually, Engel resigned from her position and filed a claim alleging sex discrimination and constructive discharge under Title VII to the Civil Rights Act. The district court sustained Employer’s motion for summary judgment and Engel appealed. On appeal, the 8th Circuit held that the failure of the Employer to terminate Herrera after the second incident along with other evidence was sufficient to survive the motion for summary judgment to Engle’s Title VII claim of sex discrimination. Engel v. Rapid City School District, (8th Cir., 06-3936, 10/09/07).

No duty to accommodate under ADA unless employee informs employer of disability and limitations. an employer has no duty to accommodate an employee under the ADA unless the employee informs the employer of the disability and limitations. The point of requiring the employee to provide this kind of information is to allow the employer to understand that the employee suffers from a disability. Without this information the employer is unable to engage in the interactive process required to determine what accommodations might be appropriate and available. Because the employee did not inform employer of the specific limitations that her depression gave rise to, the employer had no duty to find an accommodation for her. Rusk v. Fresenius Medical Care North America, (8th Cir., 06-3923, 12/06/07).

LEGISLATION, NEWS, AND OTHER MATTERS

Proposition B - OVERTIME/Minimum Wage Decision. Judge Callahan, Cole County Circuit Court judge, recently entered judgment for the MML in this very important case on the grounds that the definition of “person” in the minimum wage law did not include local governmental entities. Congratulations to Paul Martin who headed up a team of lawyers who worked on this case. The opinion notes a long line of cases to the affect that in order to include local government within a definition, the definition of person must specifically include a reference to local government. The Court did not rule on any of the other grounds raised by the MML since the decision in effect mooted these issues. There is some speculation that the state may not appeal which would be a good result for local government and the state. By not appealing, the state would not have to take up the messy task of amending the state law. Last year what looked like a slam dunk at the outset, quickly bogged down into a battle between opponents of the minimum wage law and proponents particularly over the annual cost of living escalator in the minimum wage law. In effect, the MML interest in accomplishing what everyone seemed to support was held hostage to other interests. Also if the state appeals, the Court may get into the constitutional issues not decided by the Circuit Court which in the opinion of many could complicate other matters for the state if the state also loses on these issues. A copy of the opinion is on the MML Web site at www.mocities.com.

Congratulations to Carl Lumley, City Attorney for Creve COEUR. The December 24, 2007, edition of Missouri Lawyers Weekly had a nice Christmas present (a quarter-page article) on Carl Lumley for “letting the sun shine on ethics.” Carl was recognized for his outstanding work in winning a case that required the Missouri Ethics Commission to permit complaints filed against public officials to be made available to the person whom the complaint was filed against. Since the lawsuit victory, the state law has been amended.

TALK TO US Column

We are interested in your thoughts, comments, and opinions. If you have an interesting case, comment, or something that you think may be of interest to our members like a seminar, book, or case contact me at howardcwright@mchsi.com.

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