Judge Rules in Favor of West Bloomfield Trustee on Income Question

West Bloomfield Township Board Trustee Larry Brown did nothing wrong by deferring his meeting income to the township’s Water and Sewer Benevolent Fund, Circuit Court Judge Rudy Nichols ruled Wednesday, dismissing the final issue in an ongoing lawsuit.

The complaint stated that the township had violated IRS requirements by its failure to issue W-2 forms and withhold taxes from Brown's $125 per-meeting stipend that he deferred to the hardship fund.

According to Nichols, the income is discretionary, meaning that trustees may accept or reject the payments. Because Brown decided not to receive the money, there are no IRS reporting or withholding requirements for either Brown or the township. Brown said he has contributed more than $20,000 to the fund since 2008.

Township Supervisor Michele Economou Ureste, Trustee Steven Kaplan and Treasurer Teri Weingarden filed the original lawsuit on Sept. 28 against Clerk Cathy Shaugnessy and Trustees Brown, Gene Farber and Howard Rosenberg. Weingarden later withdrew as a plaintiff.

Three other issues were cited originally. In a Jan. 4 opinion, Nichols ruled the board had acted within its legal and statutory rights regarding:

• whether the supervisor has the authority to terminate a department head without board approval
• the legality of a labor negotiating committee comprised of three trustees, which was created by the board in 2009
• whether board approval is needed for the nomination and appointment of a new police chief. 

The first three issues were dismissed by Nichols. Ureste and Kaplan requested a reconsideration of that ruling, which Nichols denied Feb. 16.

In Wednesday's opinion, Nichols said any remaining issues “appear to be political in nature, not legal.” He said the plaintiffs have the right to appeal the decision to the Michigan Legislature but that “in all likelihood this Court expects that it would be a waste of time and money.”

According to Shaughnessy, the lawsuit has cost the township more than $22,000 in legal fees and she expects the final billing total to reach or exceed $25,000. Ureste and Kaplan have disputed that claim.

“Because the supervisor and Trustee Kaplan sued the elected officials over township business, our legal counsel is bound by contract to defend any and all lawsuits,” Shaughnessy said. “I feel very, very good that the judge was able to expose the raw roots of everything. Not only did we walk away intact, but the judge basically said that this (lawsuit) is ridiculous.”

Ureste pledged to appeal the rulings. "I am very disheartened," she said. "If the courts are not working, how can I do my job? I will most likely be appealing more than one of the four issues (in the original lawsuit). I need to know what powers the supervisor has, if any. Right now, it isn't very much, yet I am held accountable and responsible."

Kaplan said he was disappointed with the result. "The trustee in question has submitted a time sheet to the clerk's office on a monthly basis seeking payment for his meeting attendance," Kaplan said. "By asking for compensation and having that compensation approved at the board meetings, he has in essence received compensation. He must then report that income and pay the taxes on it. That is common sense."

Farber, who was present in the courtroom when the ruling was made, said the board had consulted with its legal counsel regarding all of the actions in question. “The judge confirmed that we were correct,” he said. "I hope this is the end of it.”

Hampton was pleased with the decision and expressed regret that the court had to become involved in what he called “the internal affairs of a municipality.”

“I’m happy that all of the allegations made over the past year were dismissed and that I was found to be innocent,” Brown said.  “Now we can continue to assist the fellow residents who are unable to pay their water bills.”