X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Rickman, Judge.Gateway Community Service Board filed a declaratory judgment action against Frank Bonati, its former executive director, contending that Bonati’s contract violated public policy and that Bonati was not entitled to payment for various other reasons; Bonati counterclaimed for breach of contract, unjust enrichment and attorney fees. Following a bench trial, the trial court ruled in favor of Bonati and awarded him damages and attorney fees. Gateway appeals.[1] For the reasons that follow, we affirm.   Following a bench trial, appellate courts view the evidence in the light most favorable to the trial court’s rulings. See Smith v. Northside Hospital, 302 Ga. 517, 520 (807 SE2d 909) (2017). Where, as here, the parties do not request, and the trial court does not make, written findings of fact, any enumeration of error that would require consideration of a finding of fact cannot be reviewed on appeal. See OCGA § 9-11-52 (c) (“When findings or conclusions are not made prior to judgment to the extent necessary for review, failure of the losing party to move therefor after judgment shall constitute a waiver of any ground of appeal which requires consideration thereof.”); Beeks v. Consultech, 222 Ga. App. 473, 473 (474 SE2d 675) (1996). We review questions of law de novo. See In re Estate of Knapp, 326 Ga. App. 486, 489 (756 SE2d 716) (2014).   Construed in favor of the judgment, the evidence shows that Gateway first employed Bonati as its executive director in 2003 and that the parties entered into a series of contracts through the years regarding his employment. On July 16, 2011, the parties entered into their final contract—a written, two-year agreement—that obligated Gateway to pay, among other things: (1) compensation of $207,464.16 per year; (2) unused annual leave at the end of the term; (3) certain retirement plan contributions; (4) six months of post-retirement pay in exchange for assisting with a transition to a new executive director; (5) three-months severance; and (6) attorney fees “[i]n any action brought to enforce or interpret the provisions of this Agreement,” if Bonati proved to be the prevailing party. Evidence was presented to show that Bonati was also eligible for a performance or signing bonus dating back to his original employment. Bonati fully completed the two-year term of the last contract. Further, Bonati remained willing to provide transition consulting services to Gateway, did not turn down any requests to provide such services, and forewent other job opportunities in order to remain available to Gateway.   Meanwhile, three days after Bonati retired, the commissioner for the Department of Behavioral Health and Developmental Disabilities (the “Department”)[2] appointed David Crews to assume control of Gateway’s operations and asked him to make an assessment of the financial condition of the agency and the agency’s ability to continue to provide services under the contracts it was holding with the Department.[3] In his report, Crews identified numerous concerns with the finances, operation, and management of Gateway under Bonati’s tenure, as well as concerns about Bonati’s compensation. Bonati, in general, disputed these concerns.On October 1, 2013, Gateway brought suit, and Bonati later counterclaimed. Following a bench trial, the trial court ruled in favor of Bonati and awarded him damages of $326,429.88, plus attorney fees of $101,597.25. On appeal, Gateway raises three enumerations of error.[4]   1. Gateway contends the trial court erred by declining to hold that Bonati’s contract was ultra vires and void as against public policy for two reasons.(a) Gateway contends that Bonati’s contract is not enforceable because Gateway’s enabling legislation does not authorize Gateway “to confer a contractual benefit.” Specifically, Gateway contends that the enabling legislation did not authorize Gateway to hire Bonati for a two-year term or otherwise “saddle subsequent Gateway boards with onerous obligations.”   But it is undisputed that Gateway, a community service board,[5] is a statutorily created public agency, public corporation, and instrumentality of the state. See OCGA § 37-2-6 (a). As such it is governed by a board that, at the time that it entered into the final contract with Bonati, was required to “employ an executive director to serve as its chief executive officer” and authorized to “fix the compensation and terms of compensation of its employees.” OCGA § 37-2-6.1 (a) & (b) (7) (effective July 1, 2011 to June 30, 2012). Furthermore, the board was authorized to “make and enter into all contracts necessary and incidental to the performance of its duties and functions” and to “incur debt, liabilities, and obligations for any business purpose.” OCGA § 37-2-6.1 (b) (2) & (16) (effective July 1, 2011 to June 30, 2012). Finally, the board was authorized to provide benefits to its employees, including “[r]etirement, pension, . . . ; [s]ick leave, annual leave, and holiday leave; and [a]ny other similar benefits.” OCGA § 37-2-6.1 (b) (5) (A), (C), (D) (effective July 1, 2011 to June 30, 2012). These broad powers encompass all of the benefits paid to Bonati, and Gateway has not otherwise shown that any of Bonati’s benefits fall outside of these provisions of the enabling legislation. Accordingly, Gateway’s argument is without merit.[6](b) Gateway also argues that the contract violates public policy because it hampers a public officer’s administration of his or her duties to the public. More specifically, Gateway argues that Bonati’s contract hampered the subsequent administration of Gateway—specifically, the Department—in its ability to control its own hiring and finances. Gateway tendered the testimony of a Gateway board member who testified that by providing Bonati excess benefits under his contract, the Gateway board intended to penalize and deter “the State” from taking over Gateway.   The prohibition against “the enactment of ordinances or the execution of contracts which are effective beyond the term of the [administration] then in office,” Ledbetter Bros. v. Floyd County, 237 Ga. 22, 24 (4) (226 SE2d 730) (1976), “is not of statutory origin, and . . . is applicable generally to legislative or governmental bodies.” (Citation and punctuation omitted). Madden v. Bellew, 260 Ga. 530, 531 (1) (397 SE2d 687) (1990). Thus, our Supreme Court has held that even though there is no similar statute governing counties, the principle applicable to municipalities found in OCGA § 36-30-3 (a), that “[o]ne council may not, by an ordinance, bind itself or its successors so as to prevent free legislation in matters of municipal government,” “applies to counties as fully as it applies to municipalities.” Madden, 260 Ga. at 531 (1). Pretermitting whether the above principle is applicable to community service boards, there is no factual basis in the record for applying the principle here.   First, Bonati was entitled to payment for any compensation related to performance already rendered. See Hewatt v. Bonner, 142 Ga. App. 442 (236 SE2d 111) (1977) (although employee could not enforce balance of contract after termination by new administration, employee could enforce employment contract for services already rendered); see generally Ledbetter Bros., 237 Ga. at 24 (4) (“[T]he determining factor is whether the contract will be completed within the term of the [present administration.]“). Bonati retired at the end of his contractual term, before Crews was appointed to manage Gateway on behalf of the Department. Accordingly, at a minimum, the principle at issue in this division is not applicable to any remuneration to which Bonati was entitled as of that date, which, construed in favor of the judgment, would include salary, unused annual leave, retirement plan contributions, and the signing/performance bonus. See Hewatt, 142 Ga. App. 442.   Second, the remaining portions of Bonati’s compensation that Gateway challenges are his six-month post-retirement pay for transition assistance to new leadership plus the severance payable at the end of that six-month period. Construed in favor of the judgment, however, the evidence presented at trial shows that Bonati was ready, willing, and able to perform transitional services for that entire period but that Gateway never requested any such assistance. We must therefore conclude that the trial court determined that Bonati earned his post-retirement compensation, as well. And no evidence was presented at trial to show that Gateway relieved Bonati from his obligation to provide those services if requested during that time. Moreover, the trial court made no findings of fact on these points. Accordingly, we find no basis for concluding that the principle set forth in Ledbetter Bros. v. Floyd County—namely, the prohibition of the execution of a contract that is effective beyond the date of the administration then in office—is applicable to the facts of this case, and therefore we find no reversible error.2. Gateway contends the trial court erred by concluding that the post-retirement portion of Bonati’s final employment agreement with Gateway was not an unconstitutional gratuity.[7] The argument is based on Gateway’s belief that Bonati’s contract “provided lavish severance and consulting payments” for which Gateway received “only a marginal benefit, if any”; that these payments “exceeded the standards of the community service board world”; and that they were awarded in part to deter the Department from intervening in Gateway’s operations.First, although community service boards are public agencies and instrumentalities of the state, none of its liabilities, debts, or obligations can fall on the state:   [T]he liabilities, debts, and obligations of a community service board shall not constitute liabilities, debts, or obligations of the state or any county or municipal corporation and neither the state nor any county or municipal corporation shall be liable for any liability, debt, or obligation of a community service board.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
May 01, 2025
Atlanta, GA

The Daily Report is honoring those attorneys and judges who have made a remarkable difference in the legal profession.


Learn More
December 02, 2024 - December 03, 2024
Scottsdale, AZ

Join the industry's top owners, investors, developers, brokers and financiers for the real estate healthcare event of the year!


Learn More
December 11, 2024
Las Vegas, NV

This event shines a spotlight on how individuals and firms are changing the investment advisory industry where it matters most.


Learn More

We are seeking two attorneys with a minimum of two to three years of experience to join our prominent and thriving education law practice in...


Apply Now ›

Description: Fox Rothschild has an opening in the New York office for a Real Estate Litigation Associate with three to six years of commerci...


Apply Now ›

Downtown NY property and casualty defense law firm seeks a Litigation Associate with 3+ years' experience to become a part of our team! You ...


Apply Now ›