November 29, 2012
Lame-duck
High Point City Councilmember Mike Pugh, refusing to go out without a fight – or two, or 10 – is trying to organize neighbors of developer D.H. Griffin's proposed 431-acre business park north of
High Point to challenge in court the
High Point City Council's Nov. 19 annexation of the land.
Pugh is trying to rally opponents of the business park to file suit in Guilford County Superior Court on the grounds that Tom Terrell, the Smith Moore Leatherwood attorney – representing Griffin's holding company and the other owners of the land that would make up the business park in front of the City Council – has a conflict of interest.
Pugh argues that conflict results from work Terrell has done for the City of
High Point, most recently representing
High Point in disputes with the Davidson County Board of Commissioners. Terrell and
High Point City Attorney JoAnne Carlyle argue that
High Point and Griffin have waived any conflict, leaving Terrell free to represent Griffin.
The site, assembled by Griffin, includes parcels owned by his holding company, 350 South Land Holdings LLC, and parcels owned by Bland Property Investments and the Hedgecock family.
On the recommendation of
High Point City Manager Strib Boynton, the City Council did not rezone the land and made the annexation contingent on Griffin getting the property rezoned and a development agreement for it approved by the City Council by March 2013.
Pugh has argued for years that Terrell should not be allowed to represent clients in rezoning and annexation requests before the City Council because he has done work for the city. But this is the first time Pugh – who was defeated by Judy Mendenhall in the Ward 3 council race in November and will leave the City Council on Monday, Dec. 3 – has gone public with his complaint and intervened in one of Terrell's cases.
Pugh said he will provide opponents of the annexation with proof of Terrell's work for the city and recommend that they challenge the annexation in court.
Numerous neighbors of the site of Griffin's proposed business park spoke against the annexation before the City Council, and against an accompanying request by Griffin to rezone the land before the
High Point Planning and Zoning Commission.
Pugh said, "It shouldn't be difficult, with all the people that were there, to take up a collection and get a hearing with a Guilford County Superior Court judge."
Terrell acknowledged that he has represented the City of
High Point in its effort to get a special-use permit to upgrade its Westside Wastewater Treatment Plant, which is in Davidson County, from the Davidson County Board of Commissioners; in its successful attempt to get an expansion of its landfill permitted several years ago; and in other environmental matters related to the landfill.
"That is correct," Terrell said. "I am not currently representing the city. I did represent the city at its last appearance before the Davidson County Board of Commissioners. August 4 was the hearing. City management and I have discussed this thoroughly. Conflicts are waivable, and the city and my client have freely and knowingly waived any conflict."
According to councilmembers, as recently as Oct. 15, Terrell briefed the City Council in closed session on the negotiations over the special-use permit.
Terrell said the waiver of any conflict of interest is governed by the Rules of Professional Conduct of the North Carolina State Bar. The State Bar's rules prohibit numerous conflicts of interest, and do allow two clients of an attorney, such as
High Point and Griffin, to waive conflicts of interest in many cases.
All of which is beside the point.
Pugh regularly accuses Terrell of conflicts of interest, although Terrell and Smith Moore Leatherwood are surely too knowledgeable not to have the conflicts waived by current and former clients when possible. In the case of the business park annexation and rezoning, however, a conflict between the interests of Terrell's two clients – the City of
High Point and Griffin – isn't the issue.
What Pugh colloquially calls a conflict of interest does not actually seem to be one – or to be an ethics issue for Terrell. It seems to be an issue of simple fairness to the opponents of the annexation and the rezoning request, who have to argue their case against an attorney who works for the City of
High Point and a law firm that handles most of
High Point's outsourced legal issues.
That's an ethics issue for the City of
High Point in the form of the City Council and in the person of Boynton, who Carlyle said approved hiring Terrell.
High Point has only one city attorney, Carlyle, and uses Smith Moore Leatherwood for most of the legal issues Carlyle doesn't handle. It hires other outside attorneys for specialized issues such as lobbying and issuing bonds.
In other words, the interests of
High Point and of Griffin and the other property owners – the interests that could be in conflict – are adequately protected. It's the interests of the neighbors of the proposed business park that are in question.
Pugh said the opponents of the business park aren't getting a fair break.
"It's wrong," Pugh said. "They're going up against someone who is working for the city and on a first-name basis with the councilmembers. It stinks. It's a corrupt place."
So where do you draw the line between an outside attorney's work for a city and his or her work for private clients?
Carlyle said that, for
High Point, the line is drawn across the courtroom door. She said that Terrell will work for the City of
High Point if the Davidson County special-use permit becomes an issue again, which it is sure to. She said the waivers allow Terrell to represent Griffin, although
High Point would draw the line at Terrell representing him and his company in litigation.
"It's risen to a new level at that point," Carlyle said. "Tom would come back if he wanted to litigate it, and he would have to back away from everything he is doing for the city. Until that issue was resolved, we would have to not use him for anything."
The NC State Bar's Rules of Professional Conduct do recognize different standards and require different disclosure for attorneys who are public officers or employees, although they apparently don't specify whether those standards apply to outside attorneys hired by public entities such as cities.
Carlyle said the rules don't even prohibit Terrell from handling litigation for the city and another client. She said, "But I've told him I don't feel comfortable with that."
At the Nov. 19 City Council meeting, a speaker from the floor questioned Terrell's involvement in the business park case and asked if he was working for the city. Carlyle said the speaker specifically asked whether Terrell was representing the city in litigation. She said, "I said, 'No,' because there is no litigation pending against Davidson County now."
If that sounds like splitting hairs to you, well, it does a little to Carlyle too.
"I agree with you from the outside – perhaps people wondering if there is fairness there," she said. "But once there's a waiver and there's disclosure, it is there. That conflict goes away."
...continued on page 2
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