OPEN MEETINGS -- A community college board's all-day litigation settlement process that allegedly included the adverse party and her attorney negotiating with it in closed session and involved possible serial meeting shuttle conferences with a mediator violated the Brown Act, the California Court of Appeal for the Fourth District has ruled.
In a stunning reversal of a lower-court decision, a state appellate
court has ruled that at least some of a $1.6 million settlement given
to former MiraCosta College President Victoria Richart was an illegal
expenditure of public money.
Whether Richart who left MiraCosta in 2007 after months of campus
turmoil and a death threat must repay some of the settlement is
The ruling by the Fourth District Court of Appeal was issued Monday
in a lawsuit filed by Carlsbad attorney Leon Page against the
Oceanside-based community college and Richart.
The court agreed with Page that state law prevented MiraCosta from
giving Richart, as an employee of a local public agency, more than 18
months salary and health benefits to end her contract. Richart was
earning $18,155 per month when she left MiraCosta.
The court agreed with Page in his claim against Richart, that she received an unjust enrichment.
Much of Richarts three-year tenure at MiraCosta was rocked by
controversy over what some called her autocratic style and criticisms
that she mishandled a probe into the illegal sale of campus palm trees.
By the time Richart left, the faculty union had issued a no-confidence
vote and former MiraCosta presidents had called for her termination.
In addition to the unjust enrichment basis, the Fourth District agreed with the plaintiff that the process of negotiating the settlement he alleged was fatally marred by unlawful secrecy.
After a marathon closed-door meeting in June 2007, district trustees
announced that they had agreed to a separation settlement giving
Richart $650,000 for damages; $43,500 for attorney fees; salary plus
expenses for 18 months; health benefits for her and her husband until
age 65; and a Medicare supplement to age 75. A retirement benefit later
was changed to a $315,000 annuity.
. . . (T)he appellate court also ruled that the Superior Court
erred in dismissing Pages claim that MiraCosta violated the state open
meeting law when it reached the settlement in closed session.
The court said the law allows public boards to meet with attorneys
in closed session, but not to mediate disputes with opposing parties
and their counsel. Richart and her attorney were in the session and
retired Judge David Moon mediated from another room.
The Fourth District's analysis proceeded as follows:
Page asserts his cause of action challenges not the Board's discussions with its counsel, but its conduct in negotiating with an adverse party and her lawyer, as well as mediating a dispute with a private professional mediator, acts assertedly exceeding the scope of activity allowed in a closed session conference authorized by section 54952.2.
Page further argues the Board cannot avoid its Brown Act violation by pointing to his allegation that Judge Moon [the mediator] remained outside the closed session conference room, as those discussions with Judge Moon constituted "serial meetings" in violation of section 54952.2.
Finally, Page argues the District did not cure or correct its Brown Act violation because it did not rescind all of the actions taken by it and renegotiate the terms of Richart's settlement agreement.
Richart and (the) District both point to the Attorney General's analysis of the pending litigation exception (75 Ops.Cal.Atty.Gen., supra, 20), which authorizes the Board "to deliberate and take action upon the settlement of a lawsuit" in closed session. They argue District was permitted to decide the terms of Richart's settlement in closed session and confer with "legal counsel," including Judge Moon. (75 Ops.Cal.Atty.Gen., supra, 20.)
Alternatively, they argue any violation was cured as shown by a subsequent agenda and meeting minutes, of which the trial court properly took judicial notice.
Disregarding contentions, deductions and conclusions of law, and accepting the truth of Page's material factual allegations, Page alleges that on June 19, 2007, immediately following a regular, open and public meeting, the Board adjourned to a closed session, and for approximately eleven hours "the Board, its counsel, Victoria Richart, and Victoria Richart's legal counsel engaged in mediation with retired Judge David Moon to resolve Dr. Richart's 'potential' (rather than 'actual') claims that Dr. Richart 'may' have had against the District, College the Board . . . and individual members of the Board. . . ."
He alleges Judge Moon was "not associated with, or employed by, the District or its Board of Trustees," and that neither Judge Moon's retention, nor any execution of a confidentiality agreement, was noticed on any advance agenda for the closed session. Page alleges that throughout the closed session, individual trustees regularly and repeatedly left the board room to meet with Judge Moon, who spoke directly to the individual trustees about the resolution and settlement of Richart's claims against the District, Board and individual trustees.
He alleges the Board reached a consensus to enter into a settlement agreement with Richart, and immediately following the mediation, District, the Board and Richart entered into a binding settlement agreement even though the Board had not been provided with documentation concerning the amount of Richart's legal fees or the actual amount of her retirement benefit.
Page alleges that on July 1, 2007, he served the Board and its legal counsel with a demand to cure and correct its failure to hold an open and public meeting concerning the settlement negotiations with Richart, and that the District had not cured the identified violations "to date."
Looking to the content of section 54956.9 . . . we find nothing in its plain text authorizing the practice of mediating disputes or discussing potential litigation with opposing parties and their counsel. Respondents focus exclusively on the fact that Page has not alleged that Judge Moon was present in the closed meeting, instead alleging he met with trustees outside of the meeting. But that argument ignores Page's allegation that the Board engaged in negotiations and mediation with Richart and her legal counsel, an act that in our view is akin to the conduct we held was outside the scope of the litigation exception in [Shapiro v. Board of Directors of Centre City Development Corp. (2005) 134 Cal.App.4th 170].
There, we observed (via one of the parties' arguments) that though the Brown Act expressly permits closed sessions between the legislative body and its counsel regarding litigation, "there is no similar express authorization to meet in closed session where, as here, the legislative body delegates to another entity as its agent [its] powers to negotiate for the acquisition of real property." (Centre City, at pp. 182-183, italics omitted.) Like in Centre City, there is no express authorization in section 54956.9 for a legislative body to meet in closed session to discuss and negotiate with an adversary and her counsel a matter of pending litigation. (See also 62 Ops.Cal.Atty.Gen. 150, **3-5 (1979) [opining that a meeting between two adverse parties and their counsel to settle potential litigation is not justified by the then implied exception to the Brown Act permitting a legislative body to meet with its attorney in executive session, nor are negotiations with adverse counsel encompassed, as their basic purpose is inconsistent with the protection of confidential communications between a party and his attorney] . . .)
Rather, section 54956.9 permits the Board to "confer with, or receive advice from, its legal counsel regarding pending litigation. . . ." (Italics added.) Page's allegations are not limited to such discussions or deliberations between the Board and its own attorney. And, as we explain, his allegations go beyond the Board's mere discussion of proposed settlement terms and conditions or "approval given" to its legal counsel of Richart's settlement. . .
Page alleges that individual trustees regularly and repeatedly left the room to meet with Judge Moon, after which time they reached a consensus to enter into a settlement with Richart. Liberally construed, these are facts from which it can be concluded that the trustees used Judge Moon as a personal "go-between" to conduct information gathering in furtherance of collectively reaching terms and conditions for the resolution and settlement of Richart's claims in its closed session. . . The allegations show more than merely discussing and approving proposed settlement terms and conditions; they suggest the sort of " 'collective acquisition and exchange of facts' " preliminary to an ultimate decision that must occur openly. . .
Such action would also violate section 54952.2, which prohibits a legislative body to use "personal intermediaries" to exchange facts so as to reach a "collective concurrence" outside the public forum. . . "To prevent evasion
of the Brown Act, a series of private meetings (known as serial meetings) by which a majority of the members of a legislative body commit themselves to a decision concerning public business or engage in collective deliberation on public business would violate the open meeting requirement." (216 Sutter Bay Assocs. v. County of Sutter, supra, 58 Cal.App.4th at p. 877.) In connection with such meetings, the California Supreme Court has emphasized that "the intent of the Brown Act cannot be avoided by subterfuge; a concerted plan to engage in collective deliberation on public business through a series of letters or telephone calls passing from one member of the governing body to the next would violate the open meeting requirement." (Roberts v. City of Palmdale, supra, 5 Cal.4th at p. 376.)
District points out that Page did not allege that a majority of the Board members agreed to any action outside of the meeting, thus precluding any serial meeting violation of section 54952.2. We disagree. Section 54952.2's prohibition applies to use of an intermediary by a majority of the members of the legislative body. . . Page alleges that "the Board" negotiated with Richart and reached a consensus about her settlement in its closed meeting, and we fairly infer from these allegations that the entire Board was present. These allegations bring the Board's conduct within the definition of a "meeting" as requiring a gathering of the majority of the members of a legislative body at the same time and location. . . Concededly, it is not clear from Page's allegations the precise number of Board members who left the room to speak with Judge Moon outside of the closed session. Individual contacts or conversations with a member of a local body and another person are outside the scope of a Brown Act meeting. Such vagueness, however, is of no moment where neither District nor Richart specially demurred to Page's cause of action.
District further argues the Legislature's public policy in favor of mediation should not exclude mediators like Judge Moon from being used by a governing board as "legal counsel," which is permitted by section 54956.9. District's argument disregards Page's allegation that Judge Moon was not associated with or employed by the District or its Board. But apart from that, we reject its policy argument on grounds similar to those we stated in Centre City, supra, 134 Cal.App.4th at page 185. Though District may present a legitimate argument that mediation should be encouraged, "we are mindful that it is not our role, but that of the Legislature, to strike an appropriate balance between the competing interest of openness and efficiency in the context ofthe Brown Act. Public policy arguments in favor of a more expansive scope for section 54956.9 based on the interest of governmental efficiency must be directed to the Legislature, not this court." (Ibid.)
Alternatively, respondents maintain the trial court correctly took judicial notice of a subsequent agenda and meeting minutes from August 21, 2007, showing that any Brown Act violation had been cured, requiring the court to sustain its demurrer without leave to amend. If a local agency cures or corrects the alleged Brown Act violation, any nullification action shall be dismissed with prejudice . . .
We conclude issuance of a notice identifying Richart as the litigant, and minutes showing the Board had reconsidered and approved her settlement agreement, does not establish a cure of the Board's acts in impermissibly conducting information gathering in the course of mediating and negotiating with Richart in a closed meeting, actions that fall outside the Brown Act's pending litigation exception. . . The policy underlying the Brown Act is that public boards and agencies exist to aid in the conduct of the people's business; the law is intended to mandate open and public actions and deliberations. . . Thus, the public is entitled to monitor and provide input on the Board's collective acquisition and exchange of facts . . . in furtherance of a mediation or resolution of Richart's claims. In sum, the trial court erred in sustaining respondents' demurrers to Page's second cause of action without leave to amend.