Palenick v. City of Rio Rancho

2012 NMCA 018, 1 N.M. Ct. App. 274
CourtNew Mexico Court of Appeals
DecidedFebruary 6, 2012
DocketNo. 33,380; Docket No. 30,136
StatusPublished

This text of 2012 NMCA 018 (Palenick v. City of Rio Rancho) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Palenick v. City of Rio Rancho, 2012 NMCA 018, 1 N.M. Ct. App. 274 (N.M. Ct. App. 2012).

Opinion

OPINION

SUTIN, Judge.

{1} After the City of Rio Rancho (the City) was informed by the New Mexico Attorney General that its termination of Plaintiff James Palenick as its City Manager violated the Open Meetings Act (the Act), NMSA 1978, §§ 10-15-1 to -4 (1974, as amended through 2009), the City, in a meeting eleven months after the termination, passed a resolution attempting to retroactively cure the violation. Plaintiff sued on two counts: Count I, to enforce the Act, and Count II, for debt and money due under the employment agreement for the period between the initial termination and the later-attempted cure. We refer to Plaintiffs claim for debt and money due as a claim for breach of contract. The district court dismissed Plaintiffs claim in Count I seeking to enforce the Act on the ground that the court lacked subject matter jurisdiction. On Count II, the breach of contract claim, the court determined that the City violated the Act. The court nevertheless held against Plaintiff on his breach of contract claim, holding that the City’s cure in the later meeting of its prior invalid action applied retroactively, resulting in an effective earlier termination. A related issue is whether Plaintiff waived his contention that the City violated the Act when he accepted severance benefits, pursuant to his employment agreement, when he was initially terminated, believing at the time that the City had violated the Act. The district court held that Plaintiffs acceptance of the benefits immediately after his termination constituted a waiver of his breach of contract claim. A further issue involves the district court’s denial of Plaintiff’s claim under the Act for attorney fees. We hold that the City’s later attempt to make its invalid termination valid was not effective. We also hold that Plaintiffs acceptance of severance benefits did not constitute a waiver of his right to salary and benefits pursuant to his employment agreement. We further hold that Plaintiff is not entitled to attorney fees or costs under the Act.

BACKGROUND

{2} Plaintiff and the City signed an employment agreement (the agreement) dated November 8, 2006, employing Plaintiff as the City Manager at the pleasure of the City’s governing body and permitting the governing body to terminate Plaintiff with or without cause. The agreement provided that, if the governing body terminated Plaintiff without just cause, he would be entitled to receive certain severance benefits, including a cash payment calculated on his years of service. At a December 13, 2006, meeting at which Plaintiff was present, the governing body voted to terminate Plaintiffs employment, and Plaintiff immediately concluded that the vote had been taken in violation of the Act.

{3} The following day, Plaintiff delivered a letter to the City requesting payment of severance benefits, based on the governing body’s action to remove him; the demand did not mention the Act or reserve any rights to later sue the City based on a violation of the Act. A few days later, Plaintiff clarified his demand in another letter, but this too did not mention the Act. In a letter sent several days later, the City informed Plaintiff that “effective December 13, 2006[,] you will no longer be considered [an] active employee”; Plaintiff did not object to this statement. Plaintiff received severance benefits.

{4} In September 2007, the Attorney General informed the City that, because of discussions regarding Plaintiff’s employment status that predated the meeting on December 13, 2006, the City violated the Act in terminating Plaintiff’s employment at that meeting and that the violation invalidated the governing body’s action terminating Plaintiff. These discussions, referred to in the Attorney General’s letter, took place among certain City officials that included the mayor, deputy mayor, and various city councilors. At a meeting on November 14,2007, the governing body adopted a resolution to address the Attorney General’s concerns. In part, the resolution stated that “[i]f at all relevant, any and all prior actions undertaken in terminating [Plaintiffs] employment with the City and set forth in writing are hereby ratified and approved.” By this resolution, the governing body intended to ratify and approve its prior action terminating Plaintiffs employment effective December 13, 2006.

{5} On December 14, 2007, Plaintiff sent a letter to the City stating, among other things, that his termination was invalid as reflected in the Attorney General’s findings. Plaintiff filed suit against the City in January 2008. In Count I, Plaintiff sought “a judgment for violation of the . . . Act” by issuing an injunction invalidating the termination, awarding attorney fees and costs under Section 10-15-3(C), and such other relief as the court deemed proper. In Count II, he asserted a claim for debt and money due on the grounds that the City had violated the Act; his termination was invalid; he remained employed under the agreement; and he was entitled to unpaid salary and benefits, interest, attorney fees, and costs based on the City’s continuous breach of the agreement.

{6} In April 2009, the court entered an order dismissing Plaintiffs Count I with prejudice on the ground that the court did not have subjectmatter jurisdiction over the claim. The district court did not explain its rationale for holding that it lacked subject matter jurisdiction. Plaintiff does not argue on appeal that the court erred in dismissing Count I. Accordingly, we do not address or discuss the propriety of this order.

{7} In its findings of fact and conclusions of law entered in October 2009, the court not only confirmed the dismissal of Count I, but it also dismissed Count II (breach of contract). The dismissal of Count II was based on the court’s conclusion of law that the meeting on December 13, 2006, terminating Plaintiffs employment violated the Act, but that the City’s resolution adopted at its November 14, 2007, meeting “retroactively ratified, rectified, and approved its prior action on December 13, 2006[,] terminating [Plaintiff’s] employment and cured any alleged violations of the . . . Act.” The district court also found and concluded that, upon his termination in December 2006 and demand for severance benefits, Plaintiff elected to receive and did receive his severance benefits and that his “election to proceed with his demand for severance [was] a waiver of any and all rights to claim a breach of the [e]mployment [a]geement based on violations of the . . . Act.” Count II was also dismissed with prejudice. Following a hearing on Plaintiffs motion for a new trial, the court entered a final judgment in favor of the City.

{8} Plaintiff contends on appeal that his termination could have been effective only as of the date of the corrective action taken by the City on November 14, 2007, that he was employed by the City and entitled to his salary and benefits until that time, and that he did not waive his right to the salary and benefits he sought. He also contends that he is entitled to costs and reasonable attorney fees permitted under the Act.

The Retroactive Cure Issue

{9} We review questions of interpretation of statutes de novo. State v. Rivera, 2004-NMSC-001, ¶ 9, 134 N.M. 768, 82 P.3d 939. Public entities can cure violations of the Act. See, e.g., Bd. of Educ. of Santa Fe Pub. Sch. v. Sullivan, 106 N.M. 125, 125, 740 P.2d 119

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Bluebook (online)
2012 NMCA 018, 1 N.M. Ct. App. 274, Counsel Stack Legal Research, https://law.counselstack.com/opinion/palenick-v-city-of-rio-rancho-nmctapp-2012.