City ‘contract’ dispute heads to trial
By TYLER ELLYSON — CNA staff reporter tellyson@crestonnews.com
Former Creston Public Works Director Harold Holliday is set to face off against the city of Creston and Mayor Warren Woods in a four-day jury trial beginning Monday.
City Attorney Arnold O. “Skip” Kenyon III and attorneys Amy Teas and Patrick Smith of Bradshaw, Fowler, Proctor and Fairgrave law firm in Des Moines will begin their defense of the city and Woods 9 a.m. at the Union County Courthouse.
Holliday, who is being represented by attorneys James L. Sayre and James H. Sayre of Clive, had documents filed against the city on his behalf April 21, 2008, claiming promissory estoppel, negligent misrepresentation, fraudulent misrepresentation and/or fraudulent inducement and anticipatory breach of contract. The petition also cites Woods for intentional interference with a contract.
In these documents, Holliday claims then Mayor Mike Tamerius and City Administrator Mike Taylor “induced” him into early retirement during an October 2007 meeting by offering him part-time employment after retirement as part of an attempt to save the city money. Furthermore, Holliday stated in the documents he would not have retired had this offer not been made, and Tamerius and Taylor knew this.
Holliday opted to retire from the city Aug. 31, 2007, after Creston City Council approved an early-retirement program in July of that year.
It was later, Oct. 24, 2007, that he and Tamerius signed a letter of understanding for post-retirement work.
Letter
In the letter, Holliday’s position was described as being a part-time public works employee to be paid $23.65 per hour for a period not to exceed three years (not to exceed 1,040 hours per year). The city would pay for health insurance less an employee contribution, — per the early-retirement policy — IPERS and the employer’s share of Social Security. Holliday was to report to the public works director, earned no vacation or sick leave, would not get holiday pay and could be assigned to any city department for duties, assignments and work hours to be scheduled as necessary.
The city did not replace Holliday’s position, where he earned $46,000 a year before retiring, and he began his part-time role Jan. 7, 2008. After working approximately 40 hours for the city, Mayor Woods informed Holliday that the city “would not honor the letter of understanding” and “would not be using his services nor compensating him,” according to court documents filed by Holliday’s attorneys. This decision was made after the city’s finance committee decided Holliday’s pay was “unreasonably high.”
Additional documents filed by the defense state Holliday continued to work part-time for the city at $15 per hour until April 16, 2008. Holliday put in an oral resignation to city employee John Hays May 12, 2008, 20 days after filing a petition against the city.
Holliday is seeking punitive damages equivalent to the value of compensation and benefits he would have received had the letter of understanding been fulfilled through three years and cost of legal action.
Defense
The city’s attorneys contend that although a conversation between Holliday, Tamerius and Taylor about retirement took place, no guarantees were made before Holliday retired. Holliday admitted to this during his deposition testimony.
Additionally, the defense is claiming the letter of understanding is not a contract because it was never approved by Creston City Council, as the city code of ordinances requires. Under state law, a city contract not approved by the council is void.
Because there was no contract, the defense believes Holliday was an employee at-will and could be terminated without reason at any time.
A previous trial date of June 1, 2009, was continued by Fifth Judicial District Court Judge Gary Kimes. Both parties requested a trial by jury.
