10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012)
IN THE HOOPA VALLEY TRIBAL COURT OF APPEALS
HOOPA VALLEY INDIAN RESERVATION
HOOPA, CALIFORNIA
Hoopa Valley Tribal Council, Plaintiff and Appellee,
v.
Clifford Lyle Marshall, Defendant and Appellant.
No. C-10-002/A-10-001 (June 11, 2012)
SYLLABUS*
Tribal Chairman, upon loosing reelection, caused funds budgeted by the tribal council for severance pay to be issued to himself prior to leaving office. Trial court ruled Chairman was not entitled to severance pay prior to leaving office. Court of Appeals holds that severance, in the context of severance pay, is the complete termination of the contractual or employment relationship, and the Chairman therefore was not entitled to a severance payment until his term of office completely ended and his service to the Tribe was severed. Trial court decision affirmed.
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Eric Nielsen, Chief Judge; Lisa E. Brodoff, Judge; Matthew L. M. Fletcher, Judge. |
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Clifford Lyle Marshall, pro se; Thomas C. Petersen, Attorney at Law, for the Hoopa Valley Tribal Council. |
OPINION
Nielsen, C.J.:
I. Factual and Procedural History
This is an appeal from the trial court’s Judgment entered October 20. 2011. The court ruled the defendant was not entitled to a $28,584.88 severance check when he received it from the Tribe on June 17, 2009. On November 10, 2011, the trial court denied defendant’s Motion for Clarification and Reconsideration. Based on the parties’ stipulation, the trial court also
10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012) p. 112
ordered a future hearing to determine damages. This Court accepted review. The parties submitted briefs and oral argument was heard on May 9, 2012.1
This is the second occasion this Court has reviewed the trial court’s rulings in this case. Earlier, the defendant filed an interlocutory appeal challenging the trial court’s pretrial order denying defendant’s motion to dismiss Counts I and V of the original complaint on the ground the allegations in those counts were barred by sovereign immunity. We affirmed the trial court’s order. Hoopa Valley Tribal Council v. Clifford Marshall, 10 NICS App. 1 (Hoopa Valley Tribal Ct. App. 2011) (Marshall I).2
On February 12, 2010, the Hoopa Valley Tribal Council filed a complaint against the defendant, the former Chairman of the Tribal Council, Clifford Marshall. It alleged that on June 17, 2009, the day after defendant was defeated for reelection, but while still Chairman, he made a “severance” payment to himself of $28,584.88 of tribal funds by a check he had prepared and signed.
Following our decision in Marshall I, a bench trial was held September 27, 2011. The court ruled the defendant was not entitled to the severance payment on the day the check was issued. The court entered a written Judgment that identified the exhibits and summarized the testimony and the parties’ stipulations.
The parties stipulated to the following: The defendant was defeated in his bid for another term as the Chairman of the Tribal Council on June 16, 2009. The defendant’s term as Chairman did not end until June 26, 2009, when the election results were verified and the new elected Chairman was sworn into office.3 That $28,584.88 was paid to the defendant on June 17, 2009. Judgment at 2.
10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012) p. 113
The court also made the following factual findings: During the relevant time, the Tribal Council’s annual budgets included funds for a potential severance payment to the Tribal Chairman in the amount of one month’s salary for each year of service up to a maximum of four month’s of salary. Judgment at 10. A separate Liability Account was established to hold the funds for the severance payment. The account was properly established and approved by the Tribal Council. Id.4 The condition for issuance of the severance payment was that the Chairman’s employment or service as Tribal Chairman is “terminated, ended or severed.” Judgment at 11. The Chairman was authorized to sign a check drawn on the Liability Account even if it was issued to the Chairman. Judgment at 12.5 The amount of the check, $28,584.88, was the correct severance payment based on the policy of one month’s salary for each year of service, but from that amount there should have been deducted the appropriate tax withholdings. The defendant directed the interim Chief Financial Officer to issue the check without the withholding.6 Judgment at 10, 13.
In addition, the evidence shows that on June 17, 2009, the day following election, the defendant asked Mr. Jerry Davis, the Tribe’s interim Chief Financial Officer, to issue him a severance check in the amount of $28,584.88. Mr. Davis prepared the check and he and the defendant signed the check. Before preparing the check, Mr. Davis checked with Ms. Lisa Land, the Tribe’s Senior Accountant, and verified that $28,584.88 was the amount in the Liability Account.
On the day the defendant signed and received the check he deposited it in his established bank account. He then drove 65 miles to another city and opened a new account with Wells Fargo Bank and had the severance money he deposited in his established account transferred to the Wells Fargo account. The defendant testified he was concerned the Tribal Council might object to the severance payment and that was one of the reasons he issued himself the check the day following the election.
The court concluded the evidence showed the purpose of the Liability Account was to hold funds to pay the defendant a severance when his duties as Chairman terminated and the defendant was only entitled to the severance payment when that condition was met. The court
10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012) p. 114
held that defendant’s duties as Chairman did not terminate until June 26, 2009. Therefore, he was not entitled to the severance payment on June 17, 2009 when he signed and received the check.
The court also concluded the defendant did not comply with his obligation as Chairman to protect the Tribe’s interest.7 The court reasoned that by causing the issuance of the severance payment the day after the election, before the Tribal Council could decide whether to modify or change the amount of the severance payment or eliminate it, and then on that same day opening up a new account at the Wells Fargo bank and removing the payment from his account at the bank used by the Tribe to the newly opened Wells Fargo account, the defendant’s motive was to place the money beyond the reach of the Tribe in the event the Tribal Council did decide it was in the Tribe’s interest to change, modify or eliminate the severance payment.
II. Standard of Review
Generally, “Decisions by the trial court are divided into three categories for purposes of the standard of our review: questions of law (reviewable de novo); questions of fact (reviewable for clear error) and matters of discretion (reviewable for “abuse of discretion”).” Ferris v. Hoopa Valley Tribe, 8 NICS App. 1, 2 (Hoopa Valley Tribal Ct. App. 2007) (citations omitted).8
A court’s findings of fact must be supported by substantial evidence. Slater v. Hoopa Valley Tribe, 6 NICS App. 59, 62 (Hoopa Valley Tribal Ct. App. 2001). The court’s findings of fact are not in dispute and are supported by substantial evidence. In addition, the record supports the court’s summary of the witnesses’ testimony.
10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012) p. 115
III. Decision
The sole issue on appeal is whether as a matter of law the defendant was entitled to the severance payment on June 17, 2009, after he lost his reelection for Chairman but before his duties as Chairman terminated on June 26, 2009. Our review is de novo.
In establishing the account for the Chairman’s severance pay the Tribal Council did not define what constituted severance. The Tribe’s absence of a definition requires us to look elsewhere. The principal source for determining ordinary meaning is a dictionary of common usage. The commonly accepted definition of “sever” is, inter alia, “to put asunder [or] part,” or “to disjoin or disunite from one another.” Webster's Third New International Dictionary at 2080 (1993). Webster's defines “severance pay” as “an allowance usu[ally] based on length of service that is payable to an employee on severance.” Id. at 2081. “Severance” means the “termination of a contractual association (as employment).” Id.; See also Black's Law Dictionary (7th ed.1999) at 1379, 1482 (“termination of employment” means “... a complete severance of an employer—employee relationship” and “severance pay” is money … “paid by an employer to a dismissed employee.”).
Under its common meaning, severance, in the context of severance pay, is the complete termination of the contractual or employment relationship.9 This meaning is consistent with the testimony of the witnesses (Mr. Jeffery Davis and Ms. Angela Higley, the Tribe’s former Chief Financial officer), and the defendant himself. They all testified the Chairman was entitled to the budgeted severance payment only when his term of office ended.10
Witnesses also testified the Tribal Council had the authority to change or modify the budgeted severance amount before defendant’s term as Chairman ended. See, HVTC 19 § 6.1 and 6.5. The defendant testified that one of the reasons he caused the severance check to be issued the day after the election was because he had “some concern” the Tribal Council would object to the severance payment. The defendant’s actions, causing the issuance of the check, opening an account with Wells Fargo, and transferring the funds from a bank where the Tribe could have stopped payment to that Wells Fargo account the day after the election, supports the inference he wanted to foreclose the Tribal Council from changing or modifying the severance payment if it decided it was in the interest of the Tribe to do so prior to the end of his term.
10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012) p. 116
We recognize that under Title 18, the Chairman only has the authority to expend funds up to $2,500.00 per transaction. HVTC 18. The evidence, however, shows the Chairman was one of the persons authorized to sign checks drawn on the Liability Account. See, Judgment at 4 (summary of Mr. Jerry Davis’ testimony). Because the court ruled the defendant was not entitled to the severance payment on the date it was issued, and this appeal is only from that ruling,11 we do not address the apparent conflict between Title 18 and the Chairman’s authority to sign checks drawn on the Liability Account. Nor do we decide whether signing the $28,584.88 check in his capacity as Chairman the defendant violated Title 18.
We hold that the defendant was not entitled to a severance payment until his term of office completely ended and his service to the Tribe was severed. Despite the defendant’s arguments to the contrary, the evidence overwhelming shows his term did not end until June 26, 2009. In causing the issuance of the severance check and signing the check on June 17, 2009, the defendant took Tribal money he was not then authorized to take.
IV. Conclusion
We affirm the trial court’s ruling.
Matthew L. M. Fletcher, Judge, concurring:
While I join the opinion of the court in full, I write separately to address the probability that the defendant committed a serious breach of ethics instructing an employee under his supervision to write a check for the defendant, and taking additional steps to ensure that the check could not be cancelled by the tribal government after the defendant received it. The trial court, after finding that the defendant did not violate any fiduciary obligation to the Hoopa Valley Tribe, wrote additionally:
[T]he actions of defendant in causing to have the severance check issued to himself right before his right to the check had been perfected (at termination of his employment and not before) was, indeed, an unauthorized act – the purpose of which was to cause the check to be issued before the Tribal Council could take steps to modify or deny his rights to severance. Also, the fact that defendant caused to have the severance check cashed at the Tribal bank at which he had an account, and then immediately drove to the Eureka to open up another account and have the proceeds from that check placed in the new account, are all circumstances that would indicate that the Tribal Chairman sought to protect the proceeds of the check from a stop-payment or any other action by the Tribe to
10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012) p. 117
protect what they saw as their interests. While these actions by defendant are not in and of themselves improper or dishonest, when done in the context and with the motive that the defendant had, there is a clear indication that he was not performing his duty to protect the interests of the Tribe in doing this.
The Court’s opinion is that defendant, in this one respect, did not comply with his obligation to protect the Tribal interest. This is not the same as saying that the Tribal Council could have modified or revoked defendant’s right to a severance check. That is a matter of future dispute and the Court takes no position on the Tribal Council’s right to do so, other than that they have the right to do it and the defendant’s actions were taken with the specific intent of denying the Tribal Council’s right to do so.
Judgment at 13-14 (emphasis added).
The duties and responsibilities of the Tribal Chairman include those items established in Article XI, Section I of the Constitution and Bylaws of the Hoopa Valley Tribe and in Title 18 of the Tribal Code, the co-called “Chairman’s Ordinance.” Section 12 of the Chairman’s Ordinance states that the Chairman must “[s]trive[] to enhance the public awareness, image and credibility of the Hoopa Valley Tribe within the reservation and elsewhere ….” I believe the defendant’s actions as chairman in this matter reflect poorly on the public image and credibility of the Hoopa Valley Tribe.
In Hoopa Valley Housing Authority v. Davis and Sherman, 7 NICS App. 34 (Hoopa Valley Tribal Court of Appeals 2005), this court noted that “[a]n employee has a general duty of loyalty and the obligation to act in a manner that is not inconsistent with his agency.” Id. at 40. The court further recognized, at least implicitly, that elected tribal officials and management employees are immune from suit for money damages as “corporate officials” so long as “the actions taken were in the interests of the corporation and not purely personal ….” Id. at 40 n. 19 (quotation omitted). I am persuaded that the “purely personal” action of a Hoopa Valley Tribal Chairman that financially benefits the Chairman directly implicates the Chairman’s obligation to “enhance the public … image and credibility of the Hoopa Valley Tribe within the reservation and elsewhere....” 18 HVTC § 12.
The findings of the trial court demonstrate that the defendant, while still serving as Chairman in the period following the election took official action of a purely personal character that violated his general duty of loyalty to the Tribe. The defendant failed to act in a manner that was consistent with his position as the political leader of the Tribe and the high standard of conduct to which that position is held. The defendant has brought public disrepute to the office of Tribal Chairman, and the Tribe, in attempting to pay himself a severance package before it was due to him.
10 NICS App. 111, HOOPA VALLEY TRIBAL COUNCIL v. MARSHALL (June 2012) p. 118
As the trial court noted, whether or not the defendant violated his fiduciary obligations to the Tribe under the current state of tribal law is “multi-dimensional.” Judgment at 12. The Tribe did not appeal the ruling on whether a breach of fiduciary duty occurred and I see no other reason to challenge the trial court’s holding. But as the defendant admitted in oral argument, he distrusted the political process at Hoopa and believed he would not be paid the severance package to which he believed he was entitled. In order to remedy his perceived concern, he paid himself the money before anyone in authority could stop him. This was self-dealing, even if the Tribe was unable to prove it to the trial court’s satisfaction, and in my view worthy as a note of caution to future Chairmen.
The syllabus is not a part of the Court’s Opinion. The syllabus is a summary of the Opinion prepared by the publishers of this reporter only for the convenience of the reader. Therefore, the syllabus should not be cited in whole or part as legal authority. Only the Opinion, which follows the syllabus, may be cited as legal authority.
On May 18, 2012, appellant filed a “Brief After Hearing”; and on May 25, 2012, Appellee filed a Motion to Respond in Writing to appellant’s “Brief After Hearing.” HVTC 2.6.14 provides that unless the Court of Appeals permits, “no further briefs may be filed” following appellant’s reply brief. Appellant did not seek leave to file his “Brief After Hearing” or attempt to show cause as to why he could not have presented any argument contained therein to this Court prior to, or at, the oral argument in this matter. This Court therefore rejects and will not consider appellant’s “Brief After Hearing.” Accordingly, appellee’s Motion to Respond is denied.
Pending publication in the Northwest Intertribal Court System’s appellate reporter, the opinion can be viewed at:
http://www.nics.ws/hoopa/Hoopa%20Valley%20Tribal%20Council%20v.%20Clifford%20Lyle%20Marshall.pdf
Defendant also introduced his Personnel Action Form (PAF). Exhibit 1. The PAF, which defendant acknowledges he prepared, clearly shows the “effective date” of the end of his appointment and employment as June 26, 2011. The defendant claims the purpose for the time between the election and when the Chairman’s term ends and newly elected Chairman is sworn in is to allow the Chairman time to perform non-administrative acts, such as removing personal items from his office and returning Tribal property. Defendant’s Reply at 9. At oral argument, however, the defendant admitted he signed the severance check to himself in his role as Chairman. Signing checks drawn on the Tribe’s account under the authority of the office of Chairman is an administrative act.
The court did not specifically find the $28,548.88 was the actual amount lawfully budgeted for the Chairman’s severance. It is noted Mr. Jerry Davis, the Tribe’s interim Chief Financial Officer and the person who prepared the severance check, testified that was the amount in the Liability Account. See, Exhibits 13, 14, 15, and 16 (Journal Entry Vouchers prepared by the Tribe’s Senior Accountant, which appear to show that in 2002, 2003, 2004 and 2005, $7,306.07 was transferred to the Liability Account as the Chairman’s severance. That amount included withholdings).
The Liability Account required checks drawn on the account be signed by two of the following four persons: The Tribal Chairman, Chief Financial Officer, Mr. Masden and Ms. Dixon (both Council members). Judgment at 4. However, the Chairman and Vice Chairman could not be the two signatories. The defendant, as Chairman, and Mr. Jerry Davis, who was the interim Chief Financial Officer, signed the check. Id.
The court found the Tribe issued a Form 1099 and that the issue of whether the Tribe was damaged because the check was issued without any withholdings would be one decided at a future hearing on damages. Judgment at 13.
The court also found the “defendant conducted himself at all times as Tribal Chairman in an honest, straightforward, and very professional manner. The Court found his testimony in all respects credible, forth coming, and in no way evidenced an effort to take advantage of the Tribe.” Judgment at 13.
See, HVTC 2.6.18(a)(b) and (c), which provides:
(a) De Novo review
Questions of law will be decided with no deference granted to the tribal court decision....
(b) Clear Error
The appellate court must decide any questions of fact based on a clear error standard. The appellate court may only reverse the lower court decision on a question of fact where the record shows that the lower court decision on the factual question is clearly erroneous.
(c) Abuse of discretion
Where the lower court exercised its grant of discretion on an issue, the appellate court may only reverse the lower court if it finds the decision was arbitrary, capricious, or not in accordance with the law, or otherwise an abuse of discretion.
Case law also supports a plain meaning definition of “severance” pay: “In interpreting the terms of this severance pay policy, we look to the intent of the parties; however, “where a disputed term is unambiguous, we presume its natural meaning to be conclusive evidence of such intent …. Applying the plain and natural meaning of the provisions…, plaintiffs were entitled to severance pay when their employment with MGA was terminated, regardless of whether they were employed by the entity that purchased MGA's assets.” Bedinghaus v. Modern Graphic Arts, 15 F.3d 1027 (11th Cir. 1994).
Thus, the court’s finding that the “parties themselves agree that a severance payment is due and payable at the time the Chairman’s employment of service as Tribal Chairman is terminated, ended or otherwise severed” is amply supported by the record. Judgment at 11.
The Tribe did not appeal from the court’s judgment.