Opinion ID: 1676535
Heading Depth: 1
Heading Rank: 2

Heading: Health Insurance Benefits

Text: For her second point, Burke urges that the circuit court erred in finding that because Arnold Elmore acted in good faith, he should not be required to refund the amounts paid on his behalf by the mayor for his health insurance premiums. Burke directs this court's attention to Massongill v. County of Scott, 337 Ark. 281, 991 S.W.2d 105 (1999), where we held that even though the quorum court had acted in good faith in using county funds to pay their own health insurance premiums, those amounts paid had to be refunded to the county because they were not authorized by then existing state law. The appellees respond that the circuit court did not err in its finding on this point, because Elmore had indeed rendered services to the City in good faith. They further point out that like the other City officials who received health insurance benefits as part of their compensation packages pursuant to city council approval, Elmore, as the waste water operator, provided essential and similar services to the City. The City distinguishes the Massongill case by emphasizing that here the mayor authorized Elmore to receive insurance benefits and Elmore was not a part of that decision, whereas in Massongill the quorum court members voted to provide themselves with health insurance benefits. The circuit court did find in the instant case that the insurance premiums paid on behalf of Arnold Elmore were unauthorized by city ordinance and thus were illegal. However, the circuit court specifically found that Elmore did not need to refund the sums because he was not guilty of fraud or misrepresentation, but was the beneficiary of what the City thought was a justified payment. The court added that it would be unjust and inequitable to require repayment when Elmore had rendered services to the City in good faith. In Massongill v. County of Scott, supra , this court did deal with a similar issue. The quorum court had enacted an ordinance providing for payment of their insurance premiums, and we held that the quorum court members were recipients of benefits that were unlawfully paid, and as such, the members were required to refund the money unlawfully paid. We said: This case is not about the good faith of the quorum members. We do not question whether they acted in good faith in passing the ordinance at issue or in accepting the benefits received by the county. The simple fact is that monies were paid for insurance premiums to their benefit in accordance with City Ordinances 96-3 and 95-3 which were not authorized by the then existing state law. Our Constitution gives the people the right to seek recovery of such monies.... Recovery is permitted from the quorum court members not as a result of their legislative actions but because they were the recipients of benefits found to be unlawfully paid. No action would be against them personally had they received no personal benefit from expenditure of county funds. Id. at 286, 991 S.W.2d at 108. The City is right that the facts here are different in that Elmore, unlike the quorum court, had no role in the decision to provide him health insurance benefits as part of his compensation package. However, the fact remains that those benefits were not authorized by ordinance and were therefore improper and illegal. [3] Additionally, in Massongill , this court required repayment of the funds received by the quorum court members, not because they enacted the ordinance granting the benefits, but because they were recipients of benefits found to be unauthorized. We were absolutely clear that good faith does not matter in such an instance. What matters is whether the benefits were unlawfully paid. We conclude that the insurance premiums paid on behalf of Arnold Elmore were unlawfully paid by the mayor without city council approval. As was the case in Massongill , the premium amounts must be refunded to the City. We reverse the circuit court and remand the matter for further proceedings as required by this opinion.