COA shoots down Ureste/Kaplan suit over pay, appts.

The Michigan Court of Appeals has upheld a 2011 ruling by Oakland County Circuit Court Judge Rudy J. Nichols dismissing a declaratory lawsuit filed by West Bloomfield Township Supervisor Michele Economou Ureste and Trustee Steve Kaplan against four fellow Board of Trustees members.

The ruling that was released on Thursday, June 21 was centered on two issues: The board’s selection of Michael Patton as police chief; and Trustee Larry Brown having his $125 township board meeting stipend directed to the township’s Water Benevolent Fund to help needy township families pay their water bills.

The township, along with Brown, Trustees Gene Farber and Howard Rosenberg, and Clerk Catherine Shaughnessy, were named as defendants.

Kaplan said no further litigation is being planned at this point.

In the suit, the plaintiffs argued that only the township supervisor can appoint a police chief, citing Michigan Compiled Law (MCL) 42.12, which reads that “the township board in each charter township may provide for and establish a police force and authorize the supervisor to appoint, subject to the approval of the board, a township marshal and such other policemen.”

A township policy amendment came into play when the board selected and swore in Patton as the township’s new police chief to replace Ronald Cronin, who retired, in October 2010.

However, the Court of Appeals ruled against the notion that the power to appoint the police chief properly rests with the supervisor because an appointment is an administrative rather than a legislative act.

The court also stated that the language of MCL 42.12 clearly says that the board “may . . . authorize the supervisor” — not “shall authorize” — therefore giving the township board discretionary power.

Nichols also pointed out in his original ruling that the township’s ordinance code states that the police chief shall be appointed by the township board.

As far as Brown’s meeting stipend was concerned, the plaintiffs cited MCL 42.6a(6), which states that “the salary of an elected township official shall not be decreased during the official’s term of office as long as the responsibilities and requirements of that office are not diminished during the term of the official’s term of office.”

The township board did not issue tax documents to Brown reflecting compensation for the meetings he attended.

In its ruling, the Court of Appeals concluded that MCL 42.6a was inapplicable because it establishes alternative means for setting compensation through a commission and West Bloomfield does not use a commission to set compensation.

Instead, the court based its ruling on MCL 42.6, which states that “a trustee may receive, in addition to other emoluments provided by law for his service to the township, a sum per meeting of the board actually attended by him, as established by the township board to be paid upon authorization of the township board.”

The court ruled that while MCL 42.6 does not empower a trustee to decline compensation, it also “does not place specific limits on how the board may ‘establish’ per-meeting compensation.”

The court also stated in the ruling that the township board retroactively stated that Brown was entitled to $0 for 2009, 2010, and 2011. In addition, the Court of Appeals found that the board also ratified the use of Brown’s compensation for the Water Benevolent Fund and established a process that will allow future trustees to decline the compensation.

The court ruled that those actions resolved any irregularities between what Brown accepted and what he was entitled to and that the court believes “there is no reason to suppose such a change would impact the rights of third persons.”

In addition, the Court of Appeals declined to consider the legality of the Water Benevolent Fund because the issue was not raised in the plaintiffs’ complaint and was not properly pleaded.

02.WB Appeals:PDF

The decision by the Court of Appeals comes almost a year and a half after Nichols dismissed the lawsuit.

“When Supervisor Economou Ureste and Trustee Kaplan first lost, we had spent about $25,000 defending against their lawsuit,” Shaughnessy said in a statement. “Eighteen months and another $15,000 later, we have finally won. It has been so frustrating to see two elected officials in this community waste tax dollars which could have been spent on bettering this community.”

Brown said that he felt “vindicated once again.”

“I’m very pleased the Court of Appeals ruled in our favor,” he said. “I have done nothing wrong. I’m not avoiding paying taxes; I’m just trying to help people.”

Despite the court’s overall ruling, both Ureste and Kaplan have reiterated that the Court of Appeals did state that MCL 42.6 does not empower a trustee to decline compensation.

“For two years, from January 2009 until January 2011, it was improper for Brown to do that,” Kaplan said. “The resolutions were not passed until (Nichols) gave his opinion. It’s like changing the rules mid-stream, like making two strikes an out in baseball.”

Both Ureste and Kaplan claim that the majority of the board was in violation of the law by taking action to allow Brown not to receive his meeting stipend so he could continue to collect disability payments.

Brown, a certified public accountant (CPA), repudiated that claim, stating that whether he takes money does not disturb his disability income.

“The disability policies have a definition of occupation,” he said. “As long as I am not a managing director of a CPA firm, I can earn and keep my money.”