Opinion ID: 1157179
Heading Depth: 1
Heading Rank: 2

Heading: reliance on advice of counsel

Text: Commissioners Cooke and Armstrong strenuously argue that any negligence on their part should be excused as a matter of law because they acted on the advice of an assistant prosecuting attorney. Both testified that once the fee bill was presented by Commissioner Goodwin, they made no independent investigation of it, but simply turned the matter over to the assistant prosecutor. The circuit court found that at a commissioner's meeting on June 1, 1981, Commissioner Goodwin's bill for legal fees was taken up by Commissioners Cooke and Armstrong. Commissioner Goodwin was present at the meeting, but stepped down as commissioner to present his fee bill, which was not itemized. Shortly prior to the presentation of the fee bill, the assistant prosecutor gave the other two commissioners a legal memorandum, which, without reciting any facts surrounding Commissioner Goodwin's removal proceeding, indicated that payment of the fee bill would be proper. Included in the memorandum was the statement that the general rule of law [is] that a public body may indemnify a public official, who acts in good faith, for legal expenses incurred in suits brought against him for acts committed in the discharge of his duties. The trial court found that neither Cooke nor Armstrong questioned the assistant prosecutor regarding his memorandum and that the fee bill showed legal fees totaling more than $10,000 that were incurred by Goodwin prior to the time that any removal proceedings had been brought. The court also found that Cooke and Armstrong made no inquiry as to what the fees were incurred for, even though they were aware that Goodwin had been involved in earlier charges not connected with the credit card removal proceeding. The court also found that at the time the bill was authorized to be paid, Cooke and Armstrong had persuaded Goodwin to agree that he would reimburse the county if it were subsequently determined that the payment was illegal. These findings are supported by the record. We have not had occasion to discuss the question of what role the advice of counsel may have where a public official has been charged with neglect of duty. In Edwards v. Hylbert, 146 W.Va. 1, 118 S.E.2d 347 (1960), the issue was raised in a proceeding involving the removal of the mayor and certain city councilpersons, but was not discussed because the court found that they had not relied on advice of counsel. Our earlier case of Hamrick v. McCutcheon, 101 W.Va. 485, 133 S.E. 127 (1926), involved an attempted removal of the members of a board of education. Mention was made in the opinion that the board had consulted an attorney, but no discussion of the relevant legal principles was undertaken. [6] Reliance on advice of counsel as a defense is a subject that does not appear to have been extensively discussed by the courts. [7] It seems clear, though, that the party asserting this defense has the burden of showing that he: (1) made a complete disclosure of the facts to his attorney; (2) requested the attorney's advice as to the legality of the contemplated action; (3) received advice that it was legal; and (4) relied upon the advice in good faith. [8] SEC v. Savoy Industries, Inc., 665 F.2d 1310, 1314 n.28 (D.C.Cir.1981); see SEC v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1101-02 (2d Cir.1972); United States v. Custer Channel Wing Corp., 376 F.2d 675, 683 (4th Cir.), cert. denied, 389 U.S. 850, 88 S.Ct. 38, 19 L.Ed.2d 119 (1967); Hawes & Sherrard, Reliance on Advice of Counsel as a Defense in Corporate and Securities Cases, 62 Va.L.Rev. 1 (1976); Note, Advice of Counsel as a Defense, 28 Va.L.Rev. 26 (1941). We have recognized much this same law in cases involving suits for malicious prosecution where acting on advice of counsel can be an absolute defense. In Syllabus Point 8 of Truman v. Fidelity & Casualty Company of New York, 146 W.Va. 707, 123 S.E.2d 59 (1961), we said: `A suit, action or proceeding, prosecuted in good faith, and on advice of reputable counsel obtained after a fair and accurate disclosure to counsel of the facts on which advice is sought, may not serve as the basis of an action for malicious prosecution.' Hunter v. Beckley Newspapers Corp., 129 W.Va. 302, Pt. 5 Syl. [40 S.E.2d 332 (1946)]; Wright v. Lantz, 133 W.Va. 786, Pt. 2 Syl. [58 S.E.2d 123 (1950)]. See also Hogan v. Robert H. Irwin Motors, Inc., 121 N.H. 737, 433 A.2d 1322 (1981); Pallas v. Zaharopoulos, 219 Va. 751, 250 S.E.2d 357 (1979); Restatement (Second) of Torts § 666 (1977). However, acting under advice of counsel is not an absolute defense in other situations. In the contempt field, we have stated that it is not a defense, but may go to the mitigation issue. State ex rel. Walker v. Giardina, W.Va., 294 S.E.2d 900, 903 (1982); Bailey v. Bailey, 127 W.Va. 826, 829, 35 S.E.2d 81, 82-83 (1945). Except for malicious prosecution suits, it is generally held that reliance on advice of counsel is not an absolute defense to charges that a person is acting unlawfully or negligently. This issue has been raised in suits involving violations of civil rights under 42 U.S.C.A. § 1983, which are treated as federal tort actions. [9] Typical of most courts' approach in this area is this statement from Crowe v. Lucas, 595 F.2d 985, 992 (5th Cir.1979): Reliance on advice of counsel does not serve as an absolute defense to a civil rights action. Rather, it is among the calculus of facts that a jury is to consider on the issue of good faith. See also Dellums v. Powell, 566 F.2d 167, 185 (D.C.Cir.1974), cert. denied, 438 U.S. 916, 98 S.Ct. 3146, 57 L.Ed.2d 1161 (1977); Tillman v. Wheaton-Haven Recreation Ass'n, Inc., 517 F.2d 1141, 1145-46 (4th Cir.1975). From the foregoing law, we conclude that the circuit court acted properly in concluding that acting on advice of counsel is not a per se defense to charges that a public official has acted unlawfully.