Posted by: Patricia Salkin | January 20, 2013

KY Appeals Court Holds Judge Not Required to Recuse Himself in Dispute Over Whether A Contract Existed Between the City and a Developer for an Amendment to PUD Regulations

Plaintiff Snowden brought this appeal after the lower court judge denied his motion to recuse the trial judge, dismissed his complaint with prejudice, and denied his motion to reconsider the dismissal. Plaintiff had allegedly entered into an oral agreement with the City of Wilmore (“City”), through its City Attorney, Robert Gullette, Jr., and Mayor, Harold Rainwater, whereby the City would amend its planned unit development (“PUD”) regulations in exchange for Snowden’s dismissal of two pending lawsuits. Gullete apparently promised Snowden that the City would refer a PUD amendment to the Planning Commission (“Commission”) and pass the amendment regardless of its recommendation. The result was that the City referred the amendment to the Commission, Snowden voluntarily ceased the litigation, and the City ended up rejecting the amendment thereby thwarting Snowden’s plans for his “New Urbanism” development. Snowden brought suit seeking compensatory and punitive damages for breach of its agreement with him.

Snowden argued that: the City, Gullette and Rainwater breach their contract with him; caused Snowden to detrimentally rely on their promise to pass the PUD amendment, breached their implied duty of good faith and fair dealing; and violated Snowden’s due process rights by exerting arbitrary power. All of the defendants filed motions to dismiss claiming that no express agreement of the kind Snowden alleges ever occurred. The trial court reviewed letters exchanged between the parties and discerned that Snowden had merely offered to dismiss his prior lawsuits if the City would recommend the amendment to the Council. Nowhere in the letters was an agreement that if Snowden dismissed the suits that the Council would pass the amendment because only the City Council could bind itself. Neither the Town Attorney, nor any other official, could bind the Council to take future legislative action. Snowden filed a motion for reconsideration which was denied, and this appeal followed.

The first matter the appellate court decided was whether or not the trial judge should have recused from the cause due to a close professional relationship with Gullette, who had held his position as City Attorney for the past twenty-seven years and County Attorney for four years before that. Fatal to Snowden’s argument, though, he failed to allege any actual bias. His argument was based solely on the fact that Gullette appeared before the judge numerous times throughout his career and the two had developed a strong professional relationship. This allegation alone is insufficient to rise to the level bias which is needed for recusal.

The court then turned to the heart of the appeal: whether the lower court erred in grating the motions to dismiss upon finding that the exchanged correspondence did not bind the City to amend its PUD ordinance. The standard the court enunciated was whether the pleading set forth any set of facts which, if proven to be true, would entitle the party to relief. The appellate court ruled that the answer was no and affirmed the lower court’s decision.

Under Kentucky’s Revised Statutes, all municipal contracts must be written and signed by the mayor. Although executive power rests with the mayor, legislative power is vested in a council which has the authority to adopt ordinances the mayor signs. In Kentucky precedent it was established that any deviation from this rule would render the agreement void. Additionally, in order for a settlement agreement to be enforced there must be mutual assent and agreement to the material terms.

Applied to the facts of the case, any terms that may have been orally agreed upon by Gullette and Snowden had to then be agreed to by a majority of the City Council before becoming the foundation of a written contract that would ultimately be signed by Mayor Rainwater to become effective. Unfortunately for Snowden, he had neither a majority approval of the Council nor a written contract signed by Rainwater. Furthermore, the City would have had to state in writing that it agreed to pass the PUD amendment, which is never did. Without this, Snowden’s claim failed.

Snowden v. City of Wilmore, 2013 WL 132543 (Ky. App. 1/11/2013).

The opinion can be accessed at: http://caselaw.findlaw.com/ky-court-of-appeals/1620405.html


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