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Council Woman Natalie Greene v. The City of Delaware City Ethics Board

Superior Court of Delaware

October 11, 2017

COUNCIL WOMAN NATALIE GREENE, COUNCILMAN PAUL FITZWATER, Petitioners,
v.
THE CITY OF DELAWARE CITY ETHICS BOARD, Respondent.

          Submitted: August 1, 2017

          Councilwoman Natalie Greene, Councilman Paul D. Fitzwater, Pro Se.

          Barrett Edwards, Esquire, of HUDSON, JONES, JAYWORK & FISHER, Dover, Delaware, Attorney for Delaware City Board of Ethics

          MEMORANDUM OPINION

          LeGROW, J.

         This is an appeal from the Delaware City Board of Ethics decision concerning Petitioners' violation of Delaware City Code art. IV, § 1-27(a) "Fair and Equal Treatment." The question before the Court is whether the Board's decision that Petitioners violated the Delaware City Code of Ethics was based on substantial evidence when, in their capacity as members of the City Council, Petitioners voted to lease city property to a private business at a greatly reduced rate without using a bidding process or considering alternative bids. For the reasons that follow, the Board's decision is affirmed.

         Background and Procedural History

         The Jefferson Street Property at issue in this case is an undeveloped piece of city-owned land in Delaware City.[1] In May 2012, local businessman Preston Cardon offered to purchase the Jefferson Street Property from the city for his business, PSC, but the city council declined this offer.[2] In June 2015, Delaware City Councilwoman Titus moved to lease the Jefferson Street Property to contiguous property owners for no less than $600 per month, but the council never reached an agreement with any of the potential tenants.[3]

         The record on appeal showed it was the city's general practice to use a formal request for proposals ("RFP"), a bidding process, when multiple prospective tenants offered to lease the property.[4] The Delaware City Code, however, does not require the city council to use an RFP.[5]

         In June 2016, Mr. Cardon gave PSC's new proposed lease for the Jefferson Street Property to Councilwoman Betty Barrett at her place of business.[6] During the city council meeting on August 15, 2016, Barrett presented PSC's proposed lease.[7]As the council debated the lease, discussion centered around why the offer was made exclusively to PSC and why an offer to lease was not extended to the public or the contiguous property owners.[8]

         Titus accused Barrett of interfering with City Manager Richard Cathcart's duties to negotiate the lease, and said the negotiations violated the state Freedom of Information Act ("FOIA").[9] Cathcart later signed an affidavit saying he was responsible for negotiating leases for Delaware City.[10] Despite these concerns, a majority of the city council voted to lease the Jefferson Street Property to PSC for $300 a month.[11]

         On September 13, 2016, Titus filed a complaint with the Delaware City Board of Ethics (the "Board") alleging Barrett, along with Councilwoman Natalie Greene and Councilman Paul Fitzwater, violated Article IV of the Delaware City Code when they voted to lease the Jefferson Street Property exclusively to PSC at a reduced rate.[12] Certain business and personal relationships between Mr. Cardon and Barrett, Greene, and Fitzwater were central to Titus's allegations.[13] Barrett denied having any financial or personal relationship with Mr. Cardon.[14] Greene admitted receiving campaign funds from Mr. Cardon, but denied any other connections with him.[15]Fitzwater admitted having business and social dealings with Mr. Cardon, but stated these business dealings ceased after 2004.[16]

         On October 5, 2016, the Board voted to grant Greene's motion to dismiss the complaint.[17] On October 13, 2016, Titus filed a Second Amended Complaint clarifying her allegations against her fellow council members.[18]

         The Board held a hearing on November 16, 2016 to consider Titus's Second Amended Complaint.[19] On December 16, 2016, the Board delivered an opinion which found Barrett, Fitzwater, and Greene violated Delaware City Code art. IV, § 1-27(a) "Fair and Equal Treatment" when they voted to lease the Jefferson Street Property to PSC without using the RFP bidding process or considering alternative options. The Board dismissed Titus's FOIA and interference allegations for failure to state a claim.[20] Fitzwater and Greene each filed appeals contesting the Board's decision.[21] On March 28, 2017, this Court consolidated these appeals.[22]

         On appeal, Fitzwater and Greene raise five arguments. First, they contend they did not violate Section 1-27(a) because the city council gave members of the public and contiguous property owners multiple opportunities to bid on the Jefferson Street Property between 2012 and 2016.[23] Second, Petitioners claim Titus never accused them of violating Section 1-27(a) in her Second Amended Complaint, and this violation instead was based on the opinions of the Board.[24] Third, Petitioners argue no evidence submitted indicated any councilmember was partial in approving the lease to PSC.[25] Fourth, they assert the City Code does not require using an RFP bidding process, and therefore the council did not depart from its general practices.[26]Lastly, Petitioners contend the Board did not have a quorum for the hearing and its members had "extreme" conflicts of interest.[27]

         In response, the Board argues that Petitioners violated Section 1-27(a) because the council failed to use the RFP bidding process in granting the Jefferson Street Property lease to PSC at $300 a month, half the amount previously offered by or to the public.[28]

         Standard of Review

         The Delaware City Code of Ethics does not include an appeals provision that prescribes a standard of review. The State Public Integrity Commission previously noted the lack of an appeals provision and recommended correcting the deficiency, though no provisions yet have been adopted.[29] Without a direct provision, the standard of review must be drawn from another body of law. The Delaware Code provides that municipal codes of conduct must be "at least as stringent" as the State Code of Conduct.[30] Noting this language, the State urged this Court to adopt the State Code of Conduct appeals procedures for purposes of this appeal. Petitioners did not oppose the application of this standard or advance an alternative standard. I therefore will apply the only standard advocated by the parties. [31]

         The State Code of Conduct provides that "[t]he appeal shall be on the record without a trial de novo." "The Court's review . . . shall be limited to a determination of whether the Commission's decision was supported by substantial evidence on the record. The burden of proof in any such appeal shall be on the appellant." [32] This Court has held that:

Substantial evidence is that which a reasonable mind might accept as adequate to support a conclusion. It is more than a scintilla, but less than a preponderance of the evidence. It is a low standard to affirm and a high standard to overturn. If the record contains substantial evidence, then the Court is prohibited from reweighing the evidence or substituting its judgment for that of the agency.[33]

         ANALYSIS

         A. Substantial Evidence supports the Delaware City Board of Ethics decision.

         Section 1-27(a) "Fair and Equal Treatment" provides "no official or employee shall grant or make available to any person any consideration, treatment, advantage, or favor beyond which it is the general practice to grant or make available to the public at large."

         The Board heard testimony that, although not legally required, it was the city's general practice to use the RFP bidding process when leasing property.[34] No parties presented evidence during the hearing indicating that the opportunity to lease the Jefferson Street Property was offered to any parties other than PSC.[35] Petitioners, through the August 15, 2016 council meeting, voted to lease the ...


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