The Honorable v. Spencer, Mayor of the City of Reading v. City of Reading Charter Board

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The Honorable Vaughn D. Spencer, :
Mayor of the City of Reading :
:
v. : No. 1377 C.D. 2013
: Argued: May 13, 2014
City of Reading Charter Board, :
Appellant :
BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION
BY JUDGE LEAVITT FILED: August 8, 2014
The City of Reading Charter Board (Charter Board) appeals an order
of the Court of Common Pleas of Berks County (trial court) that reversed the
Charter Board’s adjudication charging The Honorable Vaughn D. Spencer, Mayor
of the City of Reading, with violations of the City of Reading’s Charter.1 The trial
court held, without taking additional evidence, that the Charter Board capriciously
disregarded evidence and made findings of fact not supported by substantial
evidence. Mayor Spencer has filed a motion to quash asserting the Charter Board
lacks standing to appeal. We deny the motion to quash and affirm the trial court.
Background
Mayor Spencer was elected to office in November 2011. During his
campaign, Spencer announced a “Policy Action Plan” to restructure the Mayor’s
1
CHARTER FOR THE CITY OF READING, COMMONWEALTH OF PENNSYLVANIA (2010) (Charter).
office. To achieve that goal, Mayor-elect Spencer sought to have several new staff
appointed to the Mayor’s office who would be ready to assume their duties on
January 2, 2012, when his term began. The prospective employees were Eron
Lloyd, Lawrence Murin, Marisol Torres, Michael Dee, and Mark Drabinsky
(Employees). In December 2011, Spencer sought the advice of the City’s
Managing Director, Carl Geffken, and others to determine whether the Employees
could be hired and in place on January 2, 2012, without violating the Charter, the
Administrative Code, or any other applicable law. At a meeting on December 28,
2011, Geffken advised Mayor-elect Spencer that Lloyd, Murin, Drabinsky and
Dee2 could be hired on a part-time basis without reopening the previous year’s
budget or amending the City’s annual Position Ordinance. Geffken further advised
Spencer that there was precedent for this procedure. Several part-time positions in
the police department had not been listed in the Position Ordinance but were
nevertheless filled.
Following the meeting, Geffken made offers of part-time employment
to Lloyd, Murin, Dee and Drabinsky. On January 3, 2012, Geffken sent a letter to
each employee confirming the offer and acceptance of employment and indicating
that the position was part-time and without benefits. During their tenure, Lloyd,
Murin, Drabinsky and Dee worked more hours than the definition of a part-time
employee allows, albeit without the compensation paid to full-time employees.3
2
Torres was offered a full-time position as Spencer’s Executive Assistant, a position enumerated
in the position ordinance.
3
In its brief, the Board explains that whether Lloyd, Murin, Dee, or Drabinsky were part-time or
full-time employees did not affect the Board’s decision. In its view, the positions, whether
fulltime or part-time, were not authorized by the Charter or the City’s Administrative Code.
2
On February 28, 2012, in response to questions about hiring part-time
employees for positions not included in either the City’s annual budget or Position
Ordinance, the Charter Board issued Advisory Opinion No. 28, stating that the
Charter requires all employment positions to be listed in the annual Position
Ordinance and budget before they can be filled. Thereafter, City Council enacted
an ordinance to amend the 2012 budget and Position Ordinance to include the
positions for Lloyd, Murin, and Torres.4
On March 23, 2012, a City Council Member, Donna Reed, filed a
complaint with the Charter Board regarding the City’s hiring of the Employees.
The Charter Board’s Investigative Officer concluded that the Mayor had violated
the Charter by hiring the Employees without the proper authorization. In response,
Mayor Spencer obtained a sworn statement from Geffken about the hiring of the
Employees. In the affidavit, Geffken stated that he had advised Mayor-elect
Spencer in December 2011 that hiring the Employees part-time was permitted and
that Geffken “solely determined and decided that offers of part-time employment
would be promptly made.” Reproduced Record at 408a (R.R. __). Geffken
confirmed that the offers of employment were made and accepted prior to January
1, 2012, and prior to Mayor Spencer taking office on January 2, 2012. Based on
the Geffken Declaration, the parties stipulated that if called to testify at the Charter
Board hearing,
former City Managing Director Carl Geffken would state that,
while Mayor-elect Spencer desired to have his senior team
hired, Mr. Spencer did not in any way pressure or influence Mr.
4
Drabinsky accepted the full-time position of Webmaster for the City of Reading in March 2012.
Dee’s position was not approved in the amended ordinance; therefore, his employment was
terminated.
3
Geffken with respect to his determination that [the Employees]
could properly be hired on a part-time basis.
R.R. 406a.
After a hearing, the Charter Board determined that Mayor Spencer
had violated the Charter by hiring the Employees to positions that did not appear in
an amended budget or Position Ordinance. The Charter Board further held that the
Mayor hired the Employees through his subordinate Geffken. Finally, although the
Charter Board found that the January 3, 2012, letters to the Employees confirmed
the “offers and acceptances of employment previously made and given,” the
Charter Board also determined that the offers and acceptances “occurred on
January 3, 2012.” R.R. 604a, 610a (emphasis added). The Charter Board rejected
the stipulation of the parties regarding the statements Geffken would have made if
called to testify, finding those statements “not credible.” The Charter Board
publicly censured Mayor Spencer and levied a $1,000 administrative fine.
Mayor Spencer appealed the Charter Board’s decision to the trial
court. The trial court reversed and vacated the Charter Board’s order, holding that
its findings of fact were not supported by substantial evidence. The trial court also
held that the Charter Board capriciously disregarded the Geffken Declaration by
simply rejecting it as “not credible.” The Charter Board now appeals to this Court.
On appeal,5 the Charter Board argues that the trial court erred by
applying an incorrect standard of review, holding that the Board’s decision was not
5
When the trial court does not take additional evidence, our standard of review of a local
agency’s adjudication is limited to determining whether constitutional rights were violated, an
error of law was committed, or the necessary factual findings are supported by substantial
evidence. Ondek v. Allegheny County Council, 860 A.2d 644, 648 n.7 (Pa. Cmwlth 2004); 2 Pa.
C.S. §754(b). An agency abuses its discretion when its findings of fact are not supported by
substantial evidence. Residents Against Matrix v. Lower Makefield Township, 845 A.2d 908, 910
(Footnote continued on the next page . . .)
4
supported by substantial evidence, and substituting its own judgment for that of the
Board.
Mayor Spencer has filed a motion to quash the instant appeal, arguing
that the Charter Board, an adjudicatory tribunal, lacks standing to appeal a reversal
of its adjudication.
Motion to Quash Appeal
We begin with the motion to quash. Mayor Spencer argues that the
Charter Board lacks standing to appeal for two reasons. First, as an adjudicatory
tribunal, the Charter Board could not be aggrieved by the trial court’s order
reversing its adjudication, any more than an Article V court of law under the
Pennsylvania Constitution can be aggrieved by an appellate court reversal of its
decision. Second, any standing conferred upon the Board by reason of its
prosecutorial function is destroyed because this appeal is being pursued by the
adjudicative side of the board, which, in turn, improperly commingles the Board’s
prosecutorial and adjudicative functions. We consider these two standing
arguments seriatim.
In support of his first standing argument, Mayor Spencer cites to
Appeal of Board of Adjustment, Lansdowne Borough, 170 A. 867 (Pa. 1934). In
Lansdowne, the board of adjustment denied an application for a special exception.
The landowners appealed to the trial court, and it reversed the decision of the board
of adjustment. The board of adjustment appealed the trial court’s order. The
(continued . . .)
(Pa. Cmwlth. 2004). In determining whether findings are supported by substantial evidence, the
Court’s scope of review is whether “there is a rational support in the record, when reviewed as a
whole, for the agency action.” Republic Steel Corp. v. Workers’ Compensation Appeals Board
(Shinsky), 421 A.2d 1060, 1062-63 (Pa. Cmwlth. 1980).
5
Pennsylvania Supreme Court held that the board of adjustment was an adjudicatory
tribunal, not an agency, and, thus, could not be aggrieved by the trial court’s order.
Accordingly, it lacked standing to appeal.
The Charter Board counters that Lansdowne is not applicable because
the Charter Board has been assigned functions that give it a stake in the outcome of
its decisions. The Charter Board claims to have been modeled after the State
Ethics Commission, which was created to administer, prosecute, enforce, and
adjudicate cases under the Public Official and Employee Ethics Act, 65 Pa. C.S.
§§1101-1113. Specifically, pursuant to the Charter, the Charter Board has the
power and duty to “[h]ear and decide all complaints alleging violations of the
Charter and Administrative Code.” CHARTER BOARD ORDINANCE §III.A(1); R.R.
117a. Further, the Charter Board may impose penalties, initiate preliminary
investigations, issue subpoenas, adopt rules and regulations, issue advisory
opinions, enforce and interpret the Charter and “have all other powers necessary”
to effectuate the Charter. CHARTER BOARD ORDINANCE §§II and III.A.(1)-(7); R.R.
114a-117a. As such, the Charter Board’s interest in appeals from its decisions is
direct and substantial.
The basic principle of standing is that a person is not adversely
affected or aggrieved by a judicial determination unless he has a direct and
substantial interest in the matter. William Penn Parking Garage, Inc. v. City of
Pittsburgh, 346 A.2d 269, 280 (Pa. 1975). In the context of an agency, “when the
legislature statutorily invests an agency with certain functions, duties and
responsibilities, the agency has a legislatively conferred interest in such matters.”
Pennsylvania Game Commission v. Department of Environmental Resources, 555
A.2d 812, 815 (Pa. 1989). Here, the Charter Board argues that its interest is direct
6
and substantial because the trial court’s ruling directly conflicts with its ability to
enforce and interpret the Charter. If the Charter Board is unable to appeal a
reversal, its authority as guardian of the Charter is compromised.
We agree with the Charter Board that its functions are different from
those of a zoning board, i.e., the tribunal held to have lacked standing in
Lansdowne. The Charter was adopted pursuant to the Home Rule Law, 53 Pa. C.S.
§2941. A home rule charter has the force and status of an enactment of the
legislature. In re Addison, 122 A.2d 272 (Pa. 1956). Where an agency has been
given “certain functions, duties and responsibilities” it is deemed to have been
“conferred” an interest, absent statutory language to the contrary. Pennsylvania
Game Commission v. Department of Environmental Resources, 555 A.2d 812, 815
(Pa. 1989). Through direct democracy, the citizens of the City enacted the Charter
Board’s enabling legislation, i.e., Amendment I of the Charter. The Charter
confers upon the Charter Board the power and duty to enforce and interpret the
Charter, adopt necessary rules and regulations, and conduct investigations. The
Charter does not limit the Charter Board’s interest to that of adjudicating disputes.
Thus, the Charter Board has a direct and substantial interest in this appeal.6
6
In his brief to this Court, Mayor Spencer argues that the Charter Board is without authority to
hear any cases and, thus, lacked jurisdiction to adjudicate this case. The Mayor admits that he
did not raise this issue to the trial court, but argues it is not waived because it involves subject
matter jurisdiction.
The Charter Board counters that Amendment I, Section 2(b) of the Charter gives it
jurisdiction to
hear and decide all cases alleging violations of the Charter or Administrative
Code, except that its jurisdiction shall not extend to any case arising under the
Ethics Code or the Personnel Code. Insofar as permitted by state law the Board
shall issue binding opinions, impose penalties and administrative fines, refer cases
for prosecution, and conduct investigations on its own initiative and on referral or
complaint. City Council shall appropriate sufficient funds to enable the Board to
(Footnote continued on the next page . . .)
7
In his second standing argument, Mayor Spencer cites our Supreme
Court’s seminal decision in Lyness v. State Board of Medicine, 605 A.2d 1204 (Pa.
1992), which held that the right to a fair and impartial tribunal prohibits the
commingling of prosecutorial and adjudicatory functions. Mayor Spencer argues
that the appeal to this Court is being prosecuted by the Charter Board’s solicitor,
who advised the Charter Board in the instant adjudication. The solicitor appeared
at the evidentiary hearing, giving advice to the Charter Board outside the presence
of counsel for both parties. Mayor Spencer contends that the Charter Board’s
appeal violates Lyness because it impermissibly commingles adjudicatory and
prosecutorial functions of the Charter Board.
In Lyness, the agency in question was a professional licensing board
whose members determined there was sufficient evidence to initiate a disciplinary
(continued . . .)
perform the duties assigned to it, including expenses for independent counsel and
other necessary staff.
CHARTER, AMENDMENT I, §2(B); R.R. 61a-62a. Accordingly, the Charter Board argues that it
has authority to hear this case and if the Mayor wanted to challenge this authority he needed to
raise that issue before the trial court. We agree.
A home rule charter has the force and status of an enactment of the legislature. In re
Addison, 122 A.2d 272 (Pa. 1956). As such, it is presumed constitutional and the burden of
proving otherwise rests on the party alleging unconstitutionality. Cali v. City of Philadelphia,
177 A.2d 824 (Pa. 1962). Constitutional challenges do not need to be raised at the administrative
agency level, as agencies do not decide constitutional questions. See 2 Pa. C.S. §753. However,
constitutional challenges must be made to the first court to hear the appeal. Lehman v.
Pennsylvania State Police, 839 A.2d 265, 276 (Pa. 2003).
Although Mayor Spencer attempts to categorize this issue as one of subject matter
jurisdiction in order to avoid waiver, it is really a challenge to the constitutionality of the Charter
provision giving the Board the authority to decide, inter alia, the complaint against Mayor
Spencer. The Mayor needed to challenge the constitutionality of the Charter before the trial
court. Because he failed to do so, it is waived. Newcomer v. Civil Service Commission of
Fairchance Borough, 515 A.2d 108, 110 (Pa. Cmwlth. 1986) (constitutional challenge not raised
before the trial court is waived on appeal to this Court).
8
action against a physician and, then, later adjudicated the merits of the action
brought against the physician. The Lyness court was concerned with the licensee’s
right to a fair and impartial tribunal, and its focus was on the hearing before the
administrative agency. Here, Mayor Spencer does not claim that the Charter
Board’s prosecutorial and adjudicatory functions were not properly separated
during the investigation and hearing phase of the proceeding. Lyness is inapposite.
Accordingly, we deny Mayor Spencer’s motion to quash appeal.
Charter Board Appeal
The Charter Board’s first issue on appeal is whether the trial court
applied the correct standard of review. The Charter Board contends that the trial
court incorrectly applied the “capricious disregard” standard because that standard
should only be used in rare cases where a fact finder actually ignores evidence.
The Charter Board contends that it did not ignore the Geffken Declaration; it
considered and rejected this evidence as not credible. The Charter Board contends
that its credibility determination is entitled to deference.
Mayor Spencer counters that the Charter Board capriciously
disregarded the Geffken Declaration by dismissing it as incredible without
explanation. Mayor Spencer argues that deference to a fact finder’s credibility
determination is appropriate only where the fact finder has observed the demeanor
of the witness, which did not occur with respect to the Geffken Declaration.
Mayor Spencer argues, alternatively, that the Charter Board considered only the
parties’ stipulation and not the Geffken Declaration itself.
9
It is axiomatic that findings of fact in a local agency’s adjudication
must be supported by substantial evidence. 2 Pa. C.S. §754(b).7 Substantial
evidence is evidence that a reasonable mind might accept as sufficient to support a
conclusion. SSEN, Inc. v. Borough Council of Borough of Eddystone, 810 A.2d 200,
207 (Pa. Cmwlth. 2002). An appellate court may not reweigh the evidence or make
credibility determinations. Leon E. Wintermyer, Inc. v. Workers’ Compensation
Appeals Board (Marlowe), 812 A.2d 478, 487-88 (Pa. 2002). However, an
appellate court may “overturn a credibility determination if it is arbitrary and
capricious or so fundamentally dependent on a misapprehension of material facts,
or so otherwise flawed, as to render it irrational.”8 Agostino v. Township of
Collier, 968 A.2d 258, 263-64 (Pa. Cmwlth. 2009). A fact finder capriciously
disregards evidence “when there is a willful and deliberate disregard of competent
7
Section 754(b) of the Local Agency Law states:
(b) Complete record.--In the event a full and complete record of the proceedings
before the local agency was made, the court shall hear the appeal without a jury
on the record certified by the agency. After hearing the court shall affirm the
adjudication unless it shall find that the adjudication is in violation of the
constitutional rights of the appellant, or is not in accordance with law, or that the
provisions of Subchapter B of Chapter 5 (relating to practice and procedure of
local agencies) have been violated in the proceedings before the agency, or that
any finding of fact made by the agency and necessary to support its adjudication
is not supported by substantial evidence. If the adjudication is not affirmed, the
court may enter any order authorized by 42 Pa.C.S. §706 (relating to disposition
of appeals).
2 Pa. C.S. §754(b).
8
In addition, where the fact finder has not observed the witness testify and cannot assess witness
demeanor, a mere conclusion on credibility is inadequate; the fact finder must explain the
reasoning for the determination. See Daniels v. Workers’ Compensation Appeal Board (Tristate
Transport), 828 A.2d 1043, 1053 (Pa. 2003) (workers’ compensation judge must articulate an
“objective basis for the credibility determination” of an expert who testifies by deposition in
order to permit effective appellate review).
10
testimony and relevant evidence which one of ordinary intelligence could not
possibly have avoided in reaching a result.” Id. at 264 (quoting Arena v.
Packaging Systems Corporation, 507 A.2d 18, 20 (Pa. 1986)).
In the present case, the trial court did not err in applying the
capricious disregard standard. Leon E. Wintermyer, 812 A.2d at 487 (holding that
“review for capricious disregard of material, competent evidence is an appropriate
component of appellate consideration in every case in which such question is
properly brought before the court”). Mayor Spencer correctly points out that the
Charter Board provided no explanation for its rejection of the Geffken Declaration,
which was highly relevant and competent evidence because Geffken was the
person who directly hired the Employees. Indeed, the Geffken Declaration is the
only evidence of when and how the hirings occurred. Therein, Geffken states that
he was solely responsible for the decision to hire the Employees and that the offers
were made and accepted prior to Mayor Spencer taking office. Consequently, it is
impossible to make a factual finding on the hiring of Employees without
considering the Geffken Declaration.9
In its second issue, the Charter Board argues that the trial court erred
in finding that the Board’s decision was not supported by substantial evidence.
Specifically, the Charter Board contends that Geffken was Mayor Spencer’s “agent
and subordinate.” Charter Board Brief at 59. It contends that Mayor Spencer
9
We disagree with Mayor Spencer’s argument that the Charter Board considered only the
stipulation regarding Geffken’s proposed testimony and not the Geffken Declaration itself.
Although the Charter Board did state in its order that it found the stipulation not credible, when
read in context the Board was referring to the substance of Geffken’s proffered “testimony,” as
summarized in his declaration. Thus, the Charter Board did consider the Geffken Declaration;
however, as discussed above, the Board capriciously disregarded the Geffken Declaration in
reaching its decision.
11
directed Geffken to hire the Employees, in violation of the Charter and
Administrative Code. Relatedly, the Charter Board contends that a local agency is
not required to accept stipulated facts which conflict with other facts in the record,
and it may reach alternate conclusions from the evidence presented. The Charter
Board contends that it did so in this case by reaching a different conclusion than
that advocated by Mayor Spencer regarding the chain of events that led to the
hiring of the Employees.
We agree with the trial court that the Charter Board’s finding that
Mayor Spencer hired the Employees was not supported by substantial evidence.
While the Charter Board is not required to accept uncontradicted evidence as
conclusive, it must cite some affirmative evidence to support an alternative
conclusion. Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485,
512 (1984) (“When the testimony of a witness is not believed, the trier of fact may
simply disregard it. Normally the discredited testimony is not considered a
sufficient basis for drawing a contrary conclusion.”); see also California Shoppers,
Inc. v. Royal Globe Insurance Co., 221 Cal. Rptr. 171, 196 (Cal. Ct. App. 1985)
(“If a witness testifies, for instance, that it was not raining at the time of the
collision, and if the jury disbelieves that testimony, such disbelief does not provide
evidence that it was raining at the time of the collision.”). The Charter Board does
not point to any evidence supporting its conclusion that it was Mayor Spencer who
hired the Employees, only that the Mayor wanted the Employees hired and met
with Geffken to discuss hiring the Employees. The only evidence in the record
about how and when the hirings came about was the Geffken Declaration, which,
as discussed above, the Charter Board capriciously disregarded. In sum, the
12
Charter Board’s finding of fact that Mayor Spencer hired the Employees was not
supported by substantial evidence.
Further, a fact finder, including an administrative agency such as the
Charter Board, is required to accept stipulated facts as binding if the stipulation is
clear and unambiguous on its face. Professional Insurance Agents Association of
Pennsylvania, Maryland and Delaware, Inc. v. Koken, 777 A.2d 1179, 1186-87
(Pa. Cmwlth. 2001); Klinger v. Workmen’s Compensation Appeal Board, 413 A.2d
432 (Pa. Cmwlth. 1980). In the present case, the parties stipulated that Geffken, if
called to testify at the hearing, would testify in a manner consistent with his
declaration. While the Charter Board was required to accept this stipulation as
binding, the Board was not required to accept the content of the Geffken
Declaration as binding because assessing the credibility of even uncontradicted
evidence is the sole province of the fact finder. However, as discussed above, the
Board capriciously disregarded the Geffken Declaration by not explaining its
credibility determination.
The Charter Board’s final argument is that the trial court improperly
reweighed the evidence. Specifically, the Charter Board argues that the trial court
improperly credited the Geffken Declaration after the Board found it was not
credible. The Charter Board argues that it explained its rationale for rejecting the
Geffken Declaration as not credible; therefore, that determination was supported
by substantial evidence. The Charter Board asserts that the trial court overstepped
its authority by reweighing the evidence and making credibility determinations.
We agree with Mayor Spencer that the trial court did not substitute its
own judgment for that of the Charter Board. Rather, the trial court reviewed and
summarized the evidence. In doing so, the trial court observed that the Geffken
13
Declaration was the only evidence of when the Employees were hired. The trial
court made no findings regarding the accuracy of the content of the Geffken
Declaration, only that it was relevant and competent evidence that the Charter
Board capriciously disregarded. As explained above in the discussion of the
Charter Board’s first issue, the trial court committed no error in so holding.
Conclusion
For all of the foregoing reasons, the Mayor’s motion to quash is
denied and the order of the trial court is affirmed.10
______________________________
MARY HANNAH LEAVITT, Judge
Judge Leadbetter did not participate in the decision in this case.
10
Mayor Spencer also raises several alternative arguments to justify the trial court’s holding,
including whether the Charter Board violated the Mayor’s due process rights or committed an
error of law. Because the trial court properly found that the Charter Board’s decision was not
supported by substantial evidence and the Board capriciously disregarded evidence, we do not
address these alternative arguments.
14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
The Honorable Vaughn D. Spencer, :
Mayor of the City of Reading :
:
v. : 1377 C.D. 2013
:
City of Reading Charter Board, :
Appellant :
ORDER
AND NOW, this 8th day of August, 2014, the motion to Quash of the
Honorable Vaughn D. Spencer, Mayor of the City of Reading, is DENIED and the
order of the Berks County Court of Common Pleas, dated July 16, 2013, is hereby
AFFIRMED.
______________________________
MARY HANNAH LEAVITT, Judge