Thompson v. Memphis Light, Gas & Water Division

244 S.W.3d 815, 2007 Tenn. App. LEXIS 430, 2007 WL 4925107
CourtCourt of Appeals of Tennessee
DecidedJuly 12, 2007
DocketW2006-01972-COA-R3-CV
StatusPublished
Cited by3 cases

This text of 244 S.W.3d 815 (Thompson v. Memphis Light, Gas & Water Division) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thompson v. Memphis Light, Gas & Water Division, 244 S.W.3d 815, 2007 Tenn. App. LEXIS 430, 2007 WL 4925107 (Tenn. Ct. App. 2007).

Opinion

OPINION

The trial court awarded summary judgment to Plaintiff, former employee of Defendant Memphis Light Gas and Water *816 Division (“MLGW”), upon determining that Plaintiff was entitled to severance benefits under “personnel policy 22-25” because revocation of the policy by MLGW’s Board was negated due to violations of the Open Meetings Act. We reverse the award of summary judgment to Mr. Thompson and award summary judgment to MLGW on other grounds.

The primary issue presented by this lawsuit is whether Plaintiff William L. Thompson (Mr. Thompson) is entitled to enhanced severance benefits under Memphis Light Gas and Water Division (“MLGW”) personnel policy 22-25 (“policy 22-25” or “the policy”), which was adopted by the Board of Defendant MLGW (“the Board”) in 2000 and subsequently rescinded by the Board in August 2004. This dispute arises in the midst of the on-going storm at MLGW. In 2000, when the city of Memphis was considering the sale' of MLGW, the MLGW Board adopted personnel policy 22-25, which provides for severance and “enhanced severance” benefits. According to MLGW’s brief to this Court, the policy was adopted “in order to provide lucrative benefits to MLGW senior employees in the event of a sale of MLGW by the City.” The policy allowed MLGW to offer enhanced severance benefits to employees and appointed officers whose full-time positions were terminated under certain conditions in exchange for “separation and release” agreements. It is undisputed that the policy was never approved by the City Council, was not included in MLGW budgets, and apparently went largely unnoticed until 2004 when Memphis Mayor Willie Herenton (“Mayor Herenton” or “the Mayor”) chose not to reappoint then MLGW President Herman Morris and Mr. Thompson, then Senior Vice President and Chief Operating Officer, applied for the position of President. In July 2004, however, Joseph Lee (Mr. Lee) was hired as President, and on September 13, 2004, Mr. Thompson’s position at MLGW was eliminated and Mr. Thompson was advised that there was no other job opening available at MLGW.

In the meantime, in January 2004, the City Council passed a resolution limiting the Board’s ability to enter into contracts providing enhanced severance benefits. Additionally, in January and August 2004, Mayor Herenton requested that the Board rescind policy 22-25. On August 19, 2004, the Board voted at its regularly scheduled meeting to rescind the policy by vote of three to zero. The matter apparently was also discussed at an 11:00 AM meeting between the Board and the President of MLGW. Accordingly, because the Board rescinded policy 22-25 prior to the elimination of Mr. Thompson’s position, Mr. Thompson was not entitled to enhanced severance benefits under the policy.

On July 13, 2005, however, Mr. Thompson filed suit in the Shelby County Chancery Court alleging he was entitled to severance benefits under policy 22-25 because the August 19 vote to rescind the policy was null and void due to violations of the Open Meetings' Act by the Board. He accordingly sought all termination benefits to which he was entitled under policy 22-25. Mr. Thompson also sought damages against Mr. Lee, alleging Mr. Lee' had conspired with Mayor Herenton to terminate his employment in violation of the Whistleblower Act. He also alleged Mr. Lee had engaged in tortious interference with his job and had wrongfully failed to allow him to return to his position with MLGW.

In March 2006, Mr. Thompson nonsuited all claims except the Open Meetings Act claim and his allegation that the severance policy had been rescinded illegally. In May 2006, he filed an amended motion for summary judgment, seeking a declaration *817 that the MLGW Board members had violated the Act. In his motion, Mr. Thompson stated that benefits under the policy had been determined by MLGW to be $275,955.70. He further sought prejudgment interest, the imposition of a penalty in either the form of punitive damages or attorney’s fees, and an injunction prohibiting the Board from holding meetings in violation of the Open Meetings Act.

In its response to Mr. Thompson’s motion for summary judgment, MLGW asserted that a genuine issue of material fact existed -with respect to the alleged violations of the Open Meetings Act and further asserted that the adoption of policy 22-25 was ultra vires. MLGW asserted the policy was null and void ab initio because it had not been approved by the Memphis City Council as required by the City Charter. Mr. Thompson, in turn, challenged the defense on procedural grounds and asserted that, as a matter of law, the policy was not ultra vires because MLGW had not adopted it in the entire absence of authority.

The trial court denied Mr. Thompson’s procedural defense. It further held that MLGW’s ultra vires defense was not applicable to bar Mr. Thompson’s claims. The trial court determined that the Board violated the Open Meetings Act (“the Act”) as codified at Tennessee Code Annotated § 8-44-101, et. seq., during the course of revoking the policy, rendering the Board’s revocation of the policy null under Tennessee Code Annotated 8-44-105. 1 It accord *819 ingly awarded summary judgment to Mr. Thompson upon determining that, as an employee of MLGW whose position was eliminated in September 2004, Mr. Thompson was entitled to seek benefits under policy 22-25 in the amount of $275,955.70. The trial court awarded summary judgment to Mr. Thompson and entered judgment in his favor in the amount of $275,955.70. Mr. Thompson moved to alter or amend, seeking prejudgment interest, penalties for violation of the Open Meetings Act, a recalculation of benefits, an injunction against further violation of the Act, and a finding that MLGW was not authorized to take action regarding its severance policy following a January 2004 City Council resolution. The trial court denied prejudgment interest, penalties, and the request for additional findings with respect to the 2004 resolution. It also denied the claim for additional damages, holding that the issue was not properly before it. The trial court granted the injunctive relief based upon agreement of the parties. This appeal ensued. We reverse the award of summary judgment to Mr. Thompson and award summary judgment to MLGW on the grounds that, pursuant to the resolution adopted by the City Council in January 2004, enhanced severance benefits under policy 22-25 are not authorized or available absent approval by the Memphis City Council.

Issues Presented

MLGW presents the following issues for our review:

(1)Whether the chancery court erred in holding that MLGW’s severance policy was lawfully adopted and/or valid despite the fact that it was never approved by the Memphis City Council.
(2) Whether the chancery court erred by awarding Plaintiff a judgment for severance benefits in light of the Memphis City Council’s January 20, 2004 resolution prohibiting MLGW from entering into any contracts for severance payments pursuant to MLGW’s severance policy from and after January 20, 2004, and the enactment of substitute ordinance 5046.

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Related

William L. Thompson v. Memphis Light, Gas and Water and Joseph Lee, III
416 S.W.3d 402 (Court of Appeals of Tennessee, 2011)
Mike Allmand v. Jon Pavletic
292 S.W.3d 618 (Tennessee Supreme Court, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
244 S.W.3d 815, 2007 Tenn. App. LEXIS 430, 2007 WL 4925107, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thompson-v-memphis-light-gas-water-division-tennctapp-2007.