Title: Handverger v. City of Winooski and O'Brien

State: vermont

Issuer: Vermont Supreme Court

Document:

Handverger
v. City of Winooski and O'Brien (2011-028)
 
2011 VT 134
 
[Filed 15-Dec-2011]
 
NOTICE:  This opinion is
subject to motions for reargument under V.R.A.P. 40 as well as formal revision
before publication in the Vermont Reports.  Readers are requested to
notify the Reporter of Decisions, Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801 of any errors in order that
corrections may be made before this opinion goes to press.
 
 
2011 VT 134 
 
No. 2011-028
 
Joshua Handverger
Supreme Court
 
 
 
On Appeal from
     v.
Superior Court, Chittenden
  Unit,
 
Civil Division
 
 
City of Winooski and William
  O'Brien, Esq.
May Term, 2011
 
 
 
 
Helen
  M. Toor, J.
 
John L. Franco, Jr.,
  Burlington, for Plaintiff-Appellant.
 
Christopher D. Ekman of Heilmann, Ekman & Associates, Inc., Burlington, for 
  Defendant-Appellee O'Brien.
 
 
PRESENT:  Reiber, C.J.,
Dooley, Johnson, Skoglund and Burgess, JJ.
 
 
¶ 1.            
BURGESS, J.  Plaintiff, the former city manager of Winooski,
appeals from the trial court's summary judgment in favor of the Winooski city
attorney.  Plaintiff sued the city attorney, individually, for breach of
fiduciary duty in the course of municipal infighting over plaintiff's
performance as manager and the city's decision to dismiss him. 
Plaintiff's complaint is that contrary to the fealty owed him by the city attorney, the attorney embarrassed and humiliated him by
threatening cross-examination at a municipal hearing concerning his suspension
of the city's police chief, and by signing a disparaging letter and press
release calling for his resignation.  Plaintiff claims compensation for
personal anguish, humiliation, embarrassment, and nightmares resulting from the
city attorney's actions.  The trial court determined that the city
attorney owed plaintiff no fiduciary duty beyond the attorney's duty to the
city.  We affirm.
¶ 2.            
The trial court found the following facts, except where otherwise
noted.  The city hired plaintiff as manager in 2007, when the city
attorney was already in office.  Plaintiff and the city attorney clashed
over plaintiff's second suspension of the Chief of Police in 2008, which led to
a city council hearing on the chief's status.  Plaintiff retained
independent counsel for the proceedings.  The city attorney represented
and advised the city council during the hearing, cross-examined witnesses, and
stated an intention to cross-examine plaintiff, although he did
not do so.  Plaintiff later described this public declaration as
humiliating, and in his deposition expressed an impression that the city
attorney's questioning of other witnesses reflected confidential conversations
between him and the city attorney in breach of the attorney's fiduciary duty to
him.  
¶ 3.            
Relations between plaintiff and the city attorney deteriorated. 
The attorney was one of eighteen city employees who signed a letter criticizing
plaintiff's leadership and calling for him to resign. The city attorney also
signed a press release saying that if plaintiff did not resign, the letter
would be presented to the city council.  Plaintiff did not resign, and the
letter was presented at the next council meeting.  In his deposition,
plaintiff expressed his belief that the purpose of the letter was to cause him
public humiliation and embarrassment.  At the meeting, the council voted
to place plaintiff on paid administrative leave and remove him from office,
effective eight days later.  Ultimately, plaintiff was terminated. 
After being fired, plaintiff sued the city for wrongful dismissal and filed
this action against the city attorney personally for breach of fiduciary duty.*
¶ 4.            
Plaintiff maintained that, during the course of his employment, the city
attorney implied that he represented plaintiff "as manager" and acted as
plaintiff's "attorney of the administration."   Plaintiff could not,
however, refer to any expression to that effect.  The court found, and it
is not disputed, that the city attorney never said he and plaintiff had an
attorney-client relationship. 
¶ 5.            
Alternatively, plaintiff relied on the text of the city charter to
establish a fiduciary duty running from the attorney to himself.  The
Winooski City Charter defines the city attorney's role as follows:
 
There shall be a legal officer of the city, known as the city attorney
appointed by the city manager as provided in this charter who shall serve as
chief legal advisor to the council, the city manager and all city departments,
offices and agencies, and shall perform any other legal duties prescribed in
this charter or by ordinance.
 
24 V.S.A.
Appendix Chapter 17, § 4.4.  Treating this provision as obliging
the city attorney to represent the municipality only, the court found no
fiduciary duty running to plaintiff.  See In re Advisory Comm. on Prof'l Ethics, Docket No. 18-98, 745 A.2d 497, 501
(N.J. 2000) (explaining that when "the municipal attorney counsels the
municipal administrator, he or she is really giving legal advice to the
municipality itself").   
¶ 6.            
Plaintiff also contended that, absent an attorney-client relationship, a
fiduciary duty still arose from the nature of dealings between him and the city
attorney.  In support, plaintiff cited a number of cases recognizing an
actionable fiduciary duty arising from privity
relationships aside from an attorney-client relationship.  Acknowledging
the case law, the court nevertheless found no analogous privity
under the facts presented here. 
¶ 7.            
We review summary judgment de novo.  The same standard employed by
the trial court applies here.  Nordlund
v. Van Nostrand, 2011 VT 79, ¶ 9, ___ Vt. ___, 27 A.3d 340.   Summary judgment is appropriate "if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with
the affidavits . . . show that there is no genuine issue as to any material
fact and that any party is entitled to judgment as a matter of law." 
V.R.C.P. 56(c)(3).  
¶ 8.            
The trial court was correct in construing the city charter as obligating
the city attorney to represent the city's interests only.  Though the
charter designates the city attorney as legal advisor to the city manager, it
is settled in Vermont and other states that the actual client of the city
attorney is the municipality.  The Vermont Rules of Professional Conduct
provide that a "lawyer employed or retained by an organization represents the
organization acting through its duly authorized constituents."  V.R.Pr.C.
1.13(a).  An organization's lawyer, such as a city attorney or
corporate counsel, works only for its constituents, including its employees and
officials, in order to serve the organization, not to serve those individuals
personally.  See Bovee v. Gravel,
174 Vt. 486, 487, 811 A.2d 137, 140 (2002) (mem.) (affirming "the general rule
that an attorney representing a corporation owes a duty of care solely to the
corporation, not to its separate shareholders, officers or directors"); see
also V.R.Pr.C. 1.13 cmt. 9 (applying rule to government lawyers).  
¶ 9.            
Similarly, other jurisdictions confirm that a municipal attorney is not
in a personal attorney-client relationship with municipal staff.  See Salt
Lake Cnty. Comm'n v. Salt Lake Cnty. Attorney,
1999 UT 73, ¶¶ 16-17, 985 P.2d 899 (interpreting Rule 1.13 to mean that where
attorney is by statute "legal adviser of the county" he or she represents
county not county commissioners individually).  This is so even when the
enabling law charges the lawyer to "represent" municipal officers.  Ward
v. Superior Court, 138 Cal. Rptr. 532, 537 (Cal.
Ct. App. 1977) (explaining that county counsel's only client was county despite
county charter's requirement that county counsel represent county officers
acting in their official capacity).  By extension, the Winooski city
attorney had no fiduciary duty to any city official separate from his duty to
the city.  
¶ 10.         In
any event, there were neither findings nor evidence that the city attorney,
implicitly or explicitly, represented plaintiff individually or in any capacity
other than as city manager.  Moreover, there was no evidence that the city
attorney undertook, as a private lawyer, to represent plaintiff.   Lacking
any lawyer-client relationship, or any other relationship evident between the
parties in their private capacities, it cannot follow that the city attorney
owed plaintiff a duty of faithful conduct for the personal benefit of
plaintiff, as claimed.
¶ 11.         We
next consider plaintiff's argument that notwithstanding a lack of
attorney-client status, a fiduciary duty existed by
operation of law due to the parties' dealings.  There does arise a fiduciary relationship when one person "is
under a duty to act for or to give advice for the benefit of another upon
matters within the scope of the relation."  Cooper v. Cooper, 173
Vt. 1, 7, 783 A.2d 430, 436 (2001) (quoting Restatement (Second) of Torts § 874
cmt. a (1979)).  Although plaintiff raises this
as a distinct argument, the essential question is still whether the city
attorney was obligated "to act for or give advice for the benefit" of plaintiff
personally either as an ally, or a neutral, in the plaintiff's employment
dispute with the city.  Absent any language to that effect in the charter,
or some evidence that the attorney otherwise entered upon such a role on behalf
of plaintiff, the answer remains no.
¶ 12.         In Bovee, cited by plaintiff, we acknowledged
relaxation in some jurisdictions of the strict attorney-client privity basis for legal malpractice where injured third
parties could show the "client's purpose in retaining the attorney was to
directly benefit a third party."  174 Vt. at 488, 811 A.2d  at 140.  This Court declined to extend such standing to bank
shareholders seeking damages from corporate counsel for malpractice in
prosecuting an earlier civil claim on behalf of the bank against the
shareholders.  See id. at 487-89, 811 A.2d 
at 139-42.  We recognized, however, that "a few courts have evinced a
willingness to recognize an attorney's duty of care to the shareholders of a
closely held corporation . . . based on circumstances demonstrating a
relationship between the attorney and a small number of shareholders
approaching that of privity."  Id. at
489, 811 A.2d  at 141.  They did so, we explained,
because in closely held corporations "the line between individual and corporate
representation can become blurred."  United States v.
Edwards, 39 F. Supp. 2d 716, 731-32 (M.D. La. 1999) (cited in Bovee).  Plaintiff presents nothing
approaching such a relationship of privity between
himself and the city attorney.  There is no evidence that the attorney was
appointed or retained to serve plaintiff's personal interests.  Nor is
there evidence of surrounding circumstances, or interaction between the
parties, suggesting a blurring of municipal objectives with plaintiff's own. 
¶ 13.         Plaintiff
also urges that we follow several decisions recognizing a fiduciary duty
arising between parties in a relationship of agency or co-ownership of
property.  Contending that his situation with the city attorney was
analogous, plaintiff posits that the city attorney breached his trust by
participating in the effort to force his resignation and then humiliating him
when he did not.  We disagree, seeing no actionable fiduciary relationship
arising between the city's attorney and plaintiff personally.
¶ 14.         Plaintiff's
reliance on Cooper v. Cooper, 173 Vt. 1, 783 A.2d 430 (2001), is
misplaced.  In Cooper, the Court identified a fiduciary
relationship between co-tenants of land.  Id. at 7, 783 A.2d  at 436.  We explained that:
 
By reason of the common interest that arises from co-ownership, a relationship
of mutual trust with respect to the common estate is created.  From that
close relationship follows a duty on each co-tenant to protect the common title
and a duty not to directly or indirectly assault the interest of any one owner.
 
 
Id.  Here,
no such common and mutually dependent interest appears between the city
attorney and plaintiff beyond the attorney's ordinary obligation to represent
the municipality.   
¶ 15.         Similarly,
Carr v. Peerless Insurance Co., 168 Vt. 465, 724 A.2d 454 (1998), is
inapposite.  In Carr, a finance company agreed to pay the
plaintiff's annual business liability insurance premium in return for the
plaintiff's timely installment payments, while the finance company also
reserved power-of-attorney (POA) to terminate coverage in the event of the
plaintiff's nonpayment.  The company cancelled the plaintiff's insurance
after he failed to make a monthly payment, and the plaintiff sued the company
when the insurer refused to defend or indemnify him against a subsequent
negligence claim.  In terminating the policy, the company failed to comply
with the statutorily required notice-of-cancellation-to-insured.  Id.
at 467, 724 A.2d  at 456.  This Court held that
the POA agreement between the plaintiff and the finance company created a
principal-agent relationship, resulting in a fiduciary duty on the part of the
agent and the company, to act "in accordance with the principal's manifestation
of consent" as set forth in the POA.  Id. at 475, 724 A.2d  at 560
(citing Restatement (Second) of Agency § 383 (1958)).  In turn, the POA
called for the company "to do all things necessary to effect cancellation,"
including complying with the notice statute.  Id. at 467, 724 A.2d  at 455.  Here, in contrast, plaintiff points
to neither acts of agency by the city attorney nor any agreement giving rise to
an agency relationship between them beyond the attorney's and plaintiff's shared obligation to act for the benefit of the
city.
¶ 16.         Plaintiff
is no more persuasive in contending that Perillo
v. Advisory Committee on Professional Ethics, 416 A.2d 801 (N.J. 1980),
establishes that a municipal attorney has a fiduciary duty to avoid acting
against the interests of city employees.  In Perillo,
the New Jersey Supreme Court held that an attorney likely to have worked in a
confidential capacity with a city employee was barred from representing the
city in administrative or judicial proceedings against the same employee. 
Id. at 803.  Perillo
did not address the issue of fiduciary duty and its primary rationale is
irrelevant to determine whether such duty was owed to the municipal
employee.  Rather, the lawyer's disqualification was "based substantially
upon the appearance of ethical impropriety."  Id. (emphasis
added).  The court explained that a municipal lawyer's close working
relationship with a police officer could "understandably foster the public
belief that, in an adversary prosecution of a municipal police officer by a
municipal attorney, there might well be an actual or subconscious temptation
for the attorney to compromise the public interest."  Id.
at 806.   The Perillo holding
implicates no fiduciary duty to the officer and thus does not apply here. 

Affirmed.
 
 
FOR THE COURT:
 
 
 
 
 
 
 
 
 
 
 
Associate
  Justice
 

* 
Partial summary judgment was issued on the claims against the City.  On
appeal, this Court upheld the partial summary judgment in Handverger
v. City of Winooski, 2011 VT 130, ___ Vt. ___, ___ A.3d ___. 
Plaintiff's claims against the City are not relevant to this appeal.