Sunshine Law Developments – Public Body Liable for Civil Penalties and Attorneys’ Fees for Refusing to Turn over a Settlement AgreementNovember 2015
The Missouri Sunshine Law, Mo.Rev.Stat. § 610.010, 610.126, requires public governmental bodies to furnish copies of public records upon request subject to certain exemptions, most of which are at the discretion of the request's recipient. Last August, we advised of a Cole County Circuit Court decision that a public body relying on a discretionary exemption must identify the exemption when responding to a request and cannot later assert a different exemption. (August 18, 2014 – "Missouri's Sunshine Law: When Governmental Bodies Fail to Explain Denial of Public Record Requests.")
The statute provides for civil penalties when a public body fails to comply. Mo. Rev. Stat. §610.027.3 provides that if a public governmental body "knowingly" violates the Sunshine Law, then it is subject to a civil penalty of up to $1,000 and the court "may" award attorneys' fees. A knowing violation occurs when a public body has "actual knowledge" that its conduct violates the statute. (White v. City of Ladue, 422 S.W.3d 439, 452 (Mo. App. 2013).) Further, under §610.027.4, if a public body "purposely" violates the statute, then a civil penalty of up to $5,000 "shall" be imposed and attorneys' fees awarded. A violation is "purposeful" when there is "'a conscious design, intent, or plan' to violate the law and do so 'with awareness of the probable consequences.'" (Spradlin v. City of Fulton, 982 S.W.2d 255, 262 (Mo. banc 1998) (internal quotations omitted).)
One frequently relied-upon Sunshine Law exemption relieves public government bodies from producing records relating to "[l]egal actions, causes of action, or litigation involving a public governmental body and any confidential or privileged communications between a public governmental body or its representatives and its attorneys." (Mo. Rev. Stat § 610.021(1).) However, the statute also provides that "any minutes, vote or Settlement Agreement relating to legal actions, causes of action or litigation involving a public governmental body . . . shall be made public upon final disposition of the matter voted upon or upon the signing by the parties of the Settlement Agreement, unless, prior to final disposition, the Settlement Agreement is ordered closed by any court . . ."
The Case - John P. Strake v. Robinwood West Community Improvement District (No. SC94842, Nov. 10, 2015)
The Robinwood West Community Improvement District, a public governmental body, settled a personal injury lawsuit. The Settlement Agreement included a provision that "unless required by law, order of the court, or as necessary to complete probate and settlement of this case," the Settlement Agreement would remain confidential. Using the Sunshine Law, John Strake, a Missouri citizen, requested a copy of the Settlement Agreement.
Upon receiving the request, Robinwood conferred with its attorneys, who advised the District that it "may not produce a copy of the [Settlement Agreement] . . . without exposing the District to damages for breach of contract" due to the Agreement's confidentiality clause. But the Settlement Agreement had not been ordered closed by a court prior to final disposition, which would have been the only way for confidentiality to be enforced, per Section 610.021(1) of the Sunshine Law. In fact, no court action required closure of the Agreement; confidentiality was required only by the terms of the Agreement.
Strake sued, seeking disclosure of the document, and easily won. Strake also sought a civil penalty and his attorneys' fees for having been forced to pursue legal action, but the trial court denied that relief, saying, "Robinwood could not have knowingly or purposely violated the Sunshine Law because Robinwood was subject to the 'two mutually conflicting obligations' of the Sunshine Law and the confidentiality clause in the Settlement Agreement." Strake appealed the denial of the penalty and attorneys' fees, but the appellate court affirmed the trial court's denial. On November 10, 2015, the trial court and the appellate court decisions were reversed by the Missouri Supreme Court, which noted:
Robinwood admits "knowing or having 'actual knowledge' that it is subject to the Sunshine Law." Robinwood further admits to "generally knowing that certain documentation is subject to production under the Sunshine Law." Robinwood, however, "adamantly denies that it had any knowledge as to whether documents relating to a settled personal injury lawsuit filed against [Robinwood] must be produced under the Sunshine Law."
The court noted that the basis for Robinwood's denial was not a court order that preceded the settlement agreement as stipulated by Section 610.021(1). Rather, it was the advice of its attorneys that it should not turn over the document because it could thereby be exposed to damages for breach of contract due to the agreement's confidentiality clause. The attorneys noted also that "[w]hile we are cognizant of RSMO 610.021, we believe the most prudent course is to refuse these requests absent a Court Order to produce the requested documents."
The court found that this advice from the attorneys was insufficient to serve as a defense, because it did "not negate Robinwood's knowledge of its obligations under the Sunshine Law" and because the attorneys did not advise that the requested records were closed under the law; they advised only of the possibility of a breach of contract claim for violating the confidentiality provision. But the court said, "Robinwood's knowledge of its Sunshine Law obligations is not negated by its contractual obligations." Further, the court said that Robinwood's decision to withhold the requested document out of concern for avoiding potential contractual liability amounted to "purposely" violating the Sunshine Law because in so doing, Robinwood was "conscious" of the fact that it was violating the law "with awareness of the probable consequences." Accordingly, Robinwood was liable for a civil penalty of up to $5,000 and Strake's reasonable attorneys' fees incurred in the case.
The decision did not address whether good-faith reliance on incorrect advice from an attorney would serve as a defense to a Sunshine Law violation had Robinwood's attorneys incorrectly advised that the Settlement Agreement was closed under the Sunshine Law.
Nonetheless, a provision in the Sunshine Law would have permitted Robinwood to pursue declaratory relief to resolve doubts about its Sunshine Law obligations. (Mo. Rev. Stat. §610.027.6.) Had it done so, it might have avoided liability for a civil penalty but still would have been liable for Strake's attorneys' fees. (Hemeyer v. KRCG-TV, 6 S.W.3d 880 (Mo. 1999), which found a public body liable for reasonable attorneys' fees of a requesting party when it seeks judicial determination of whether a record is open under the Sunshine Law.)
Finally, an interesting sidelight not referenced by the court and apparently overlooked by Robinwood and its attorneys is an earlier decision by the Court of Appeals for the Eastern District in Calvert v. Mehlville School District, 44 S.W. 3d 455, 458 (Mo.App.E.D. 2001). There, the court suggested that a school district could not be liable for breaching a confidentiality provision in a settlement agreement by disclosing the agreement because §610.021(1) required such disclosure.