UCDD will not be paying former County Mayor Mike Foster's attorney fees.
During a brief hearing Friday morning in DeKalb County Circuit Court, Judge Amy Hollars found that UCDD could not legally reimburse Foster for his $61,675 in attorney fees, a cost he incurred following his indictment last September. Judge Hollars based her decision on a Tennessee Supreme Court ruling in an 1870's case "Smith versus Nashville" in which the high court found that a governmental entity "could not appropriate money to defray the cost of an official who had been prosecuted for official misconduct, although he be acquitted."
"I'm bound to follow what appears to me to be the controlling Tennessee precedent from the Tennessee Supreme Court in "Smith versus Nashville". It would be this court's ruling that the UCDD cannot reimburse these attorneys fees," said Judge Hollars.
WJLE was the only media represented at the hearing.
Foster wanted the Upper Cumberland Development District to pay his legal expenses in a federal criminal case which was brought against him stemming from the "Living the Dream" investigation. The charge against Foster was dropped in February. UCDD declined to reimburse Foster and sought a Chancery Court ruling on whether it was legal to do so. On June 18, the UCDD filed a petition for declaratory judgment in Putnam County Chancery Court asking the court to "declare whether it would be legal or illegal for the UCDD to indemnify or reimburse Foster for the fees, costs, and expenses he claims, under Tennessee constitutional, statutory, or common law."
Smithville attorney Hilton Conger, who represented Foster at the hearing Friday, argued that the Alabama Supreme Court, while concurring with the Tennessee Supreme Court ruling in "Smith versus Nashville" also stated in the case of "Birmingham versus Wilkinson" that "the same policy which demands the holding of public offices to strict account in matters of public trust, also demands their protection against groundless assaults upon their integrity in the discharge of public duty".
"This case (Birmingham versus Wilkinson) says there are no hard and fast rules. It's a case by case situation," said Conger during Friday's hearing. "I think that leaves the door open for this court (Judge Hollars) to follow our sister state (Alabama) in which they don't depart from "Smith versus Nashville" but set out another scenario by which courts can order that (payment of attorney fees). There are situations where an entity or in this case the UCDD board has an interest in seeing that their (board) members are not wrongfully maligned," said Conger.
In making her ruling, Judge Hollars also referred to a 1997 Wilson County case in which members of the school board , who were ousted and later reinstated, sought attorney's fees for their defense from the Wilson County Board of Education and were denied by the Chancery Court as well as the Tennessee Court of Appeals. Citing the Tennessee Supreme Court decision in "Smith versus Nashville", the appellate court wrote in the Wilson County case that "Despite our desire to overrule the Chancery Court, we were unable to find a legal or equitable ground upon which to base such a ruling. The history of the case reveals that appellants had done nothing wrong, but were forced to incur substantial attorneys fees nonetheless. Should the Tennessee Supreme Court take this issue up for consideration, we hope they are able to devise a just result."
In 1879, the Tennessee Supreme Court decided the "Smith versus Nashville" case in which the state brought a bill, on the relation of a number of Nashville citizens, accusing the Mayor and Common Council of Nashville, the Mayor, and individual members of the City Council, and other city officials with gross misconduct and with having brought the corporation to the verge of bankruptcy. On June 5, 1869, the Mayor retained an attorney to aid the City Attorney in the defense of the case. The Mayor and the City Council ratified the Mayor's action in September 1869. Thereafter, the attorney filed an action for his fees. The trial court concluded the municipal corporation had no interest in defending the bill and that neither the City Council nor the Mayor had the authority to bind the municipal corporation. Thus, the trial court entered a judgment against the attorney. The Tennessee Supreme Court affirmed the judgment and stated: Where a municipal corporation has no interest in the event of a suit, or in the question involved in the case, it would seem clear that it could not assume the defense of the suit, or appropriate its money for the payment of expenses incurred....Most clearly, the corporation could not appropriate money to defray the costs of an official who had been prosecuted for official misconduct, although he be acquitted.
"This is a very harsh ruling (Tennessee Supreme Court) but the rationale is that a municipal corporation does not have a direct interest in the suit and that the board or development district cannot appropriate its money for the payment of these expenses incurred," said Judge Hollars.
"It's especially disturbing in this case (UCDD) because the court has read transcripts, statements, and the indictment in which there is the barest mention of Mr. Foster. When elected county officials and city officials serve on boards like this and they are misled by unscrupulous people who are involved in the day to day running of the entity, the ruling seems all the more harsh. But I think I'm bound to follow what appears to me to be the controlling Tennessee precedent from the Tennessee Supreme Court in "Smith versus Nashville". Therefore, it would be this court's ruling that the UCDD cannot reimburse these attorney fees. It's not a satisfying result but I think that's what the law dictates," Judge Hollars concluded.
Conger told WJLE after the hearing it's too early to say if Foster will appeal Judge Hollars' ruling.
UCDD was represented in this matter by Daniel H. Rader, IV of Cookeville.
The case, which was filed in Putnam County Chancery Court, was to have gone before Chancellor Ronald Thurman but he recused himself. Judge Hollars took the case and heard it in DeKalb County Friday because it was her day to have court here.