The Honorable v. Spencer, Mayor of the City of Reading v. City of Reading Charter Board

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

The Honorable Vaughn D. Spencer, :

Mayor of the City of Reading :

:

v. : No. 1377 C.D. 2013

: Argued: May 13, 2014

City of Reading Charter Board, :

Appellant :

BEFORE: HONORABLE MARY HANNAH LEAVITT, Judge

HONORABLE P. KEVIN BROBSON, Judge

HONORABLE ANNE E. COVEY, Judge

OPINION

BY JUDGE LEAVITT FILED: August 8, 2014

The City of Reading Charter Board (Charter Board) appeals an order

of the Court of Common Pleas of Berks County (trial court) that reversed the

Charter Board’s adjudication charging The Honorable Vaughn D. Spencer, Mayor

of the City of Reading, with violations of the City of Reading’s Charter.1 The trial

court held, without taking additional evidence, that the Charter Board capriciously

disregarded evidence and made findings of fact not supported by substantial

evidence. Mayor Spencer has filed a motion to quash asserting the Charter Board

lacks standing to appeal. We deny the motion to quash and affirm the trial court.

Background

Mayor Spencer was elected to office in November 2011. During his

campaign, Spencer announced a “Policy Action Plan” to restructure the Mayor’s

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CHARTER FOR THE CITY OF READING, COMMONWEALTH OF PENNSYLVANIA (2010) (Charter).

office. To achieve that goal, Mayor-elect Spencer sought to have several new staff

appointed to the Mayor’s office who would be ready to assume their duties on

January 2, 2012, when his term began. The prospective employees were Eron

Lloyd, Lawrence Murin, Marisol Torres, Michael Dee, and Mark Drabinsky

(Employees). In December 2011, Spencer sought the advice of the City’s

Managing Director, Carl Geffken, and others to determine whether the Employees

could be hired and in place on January 2, 2012, without violating the Charter, the

Administrative Code, or any other applicable law. At a meeting on December 28,

2011, Geffken advised Mayor-elect Spencer that Lloyd, Murin, Drabinsky and

Dee2 could be hired on a part-time basis without reopening the previous year’s

budget or amending the City’s annual Position Ordinance. Geffken further advised

Spencer that there was precedent for this procedure. Several part-time positions in

the police department had not been listed in the Position Ordinance but were

nevertheless filled.

Following the meeting, Geffken made offers of part-time employment

to Lloyd, Murin, Dee and Drabinsky. On January 3, 2012, Geffken sent a letter to

each employee confirming the offer and acceptance of employment and indicating

that the position was part-time and without benefits. During their tenure, Lloyd,

Murin, Drabinsky and Dee worked more hours than the definition of a part-time

employee allows, albeit without the compensation paid to full-time employees.3

2

Torres was offered a full-time position as Spencer’s Executive Assistant, a position enumerated

in the position ordinance.

3

In its brief, the Board explains that whether Lloyd, Murin, Dee, or Drabinsky were part-time or

full-time employees did not affect the Board’s decision. In its view, the positions, whether

fulltime or part-time, were not authorized by the Charter or the City’s Administrative Code.

2

On February 28, 2012, in response to questions about hiring part-time

employees for positions not included in either the City’s annual budget or Position

Ordinance, the Charter Board issued Advisory Opinion No. 28, stating that the

Charter requires all employment positions to be listed in the annual Position

Ordinance and budget before they can be filled. Thereafter, City Council enacted

an ordinance to amend the 2012 budget and Position Ordinance to include the

positions for Lloyd, Murin, and Torres.4

On March 23, 2012, a City Council Member, Donna Reed, filed a

complaint with the Charter Board regarding the City’s hiring of the Employees.

The Charter Board’s Investigative Officer concluded that the Mayor had violated

the Charter by hiring the Employees without the proper authorization. In response,

Mayor Spencer obtained a sworn statement from Geffken about the hiring of the

Employees. In the affidavit, Geffken stated that he had advised Mayor-elect

Spencer in December 2011 that hiring the Employees part-time was permitted and

that Geffken “solely determined and decided that offers of part-time employment

would be promptly made.” Reproduced Record at 408a (R.R. __). Geffken

confirmed that the offers of employment were made and accepted prior to January

1, 2012, and prior to Mayor Spencer taking office on January 2, 2012. Based on

the Geffken Declaration, the parties stipulated that if called to testify at the Charter

Board hearing,

former City Managing Director Carl Geffken would state that,

while Mayor-elect Spencer desired to have his senior team

hired, Mr. Spencer did not in any way pressure or influence Mr.

4

Drabinsky accepted the full-time position of Webmaster for the City of Reading in March 2012.

Dee’s position was not approved in the amended ordinance; therefore, his employment was

terminated.

3

Geffken with respect to his determination that [the Employees]

could properly be hired on a part-time basis.

R.R. 406a.

After a hearing, the Charter Board determined that Mayor Spencer

had violated the Charter by hiring the Employees to positions that did not appear in

an amended budget or Position Ordinance. The Charter Board further held that the

Mayor hired the Employees through his subordinate Geffken. Finally, although the

Charter Board found that the January 3, 2012, letters to the Employees confirmed

the “offers and acceptances of employment previously made and given,” the

Charter Board also determined that the offers and acceptances “occurred on

January 3, 2012.” R.R. 604a, 610a (emphasis added). The Charter Board rejected

the stipulation of the parties regarding the statements Geffken would have made if

called to testify, finding those statements “not credible.” The Charter Board

publicly censured Mayor Spencer and levied a $1,000 administrative fine.

Mayor Spencer appealed the Charter Board’s decision to the trial

court. The trial court reversed and vacated the Charter Board’s order, holding that

its findings of fact were not supported by substantial evidence. The trial court also

held that the Charter Board capriciously disregarded the Geffken Declaration by

simply rejecting it as “not credible.” The Charter Board now appeals to this Court.

On appeal,5 the Charter Board argues that the trial court erred by

applying an incorrect standard of review, holding that the Board’s decision was not

5

When the trial court does not take additional evidence, our standard of review of a local

agency’s adjudication is limited to determining whether constitutional rights were violated, an

error of law was committed, or the necessary factual findings are supported by substantial

evidence. Ondek v. Allegheny County Council, 860 A.2d 644, 648 n.7 (Pa. Cmwlth 2004); 2 Pa.

C.S. §754(b). An agency abuses its discretion when its findings of fact are not supported by

substantial evidence. Residents Against Matrix v. Lower Makefield Township, 845 A.2d 908, 910

(Footnote continued on the next page . . .)

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supported by substantial evidence, and substituting its own judgment for that of the

Board.

Mayor Spencer has filed a motion to quash the instant appeal, arguing

that the Charter Board, an adjudicatory tribunal, lacks standing to appeal a reversal

of its adjudication.

Motion to Quash Appeal

We begin with the motion to quash. Mayor Spencer argues that the

Charter Board lacks standing to appeal for two reasons. First, as an adjudicatory

tribunal, the Charter Board could not be aggrieved by the trial court’s order

reversing its adjudication, any more than an Article V court of law under the

Pennsylvania Constitution can be aggrieved by an appellate court reversal of its

decision. Second, any standing conferred upon the Board by reason of its

prosecutorial function is destroyed because this appeal is being pursued by the

adjudicative side of the board, which, in turn, improperly commingles the Board’s

prosecutorial and adjudicative functions. We consider these two standing

arguments seriatim.

In support of his first standing argument, Mayor Spencer cites to

Appeal of Board of Adjustment, Lansdowne Borough, 170 A. 867 (Pa. 1934). In

Lansdowne, the board of adjustment denied an application for a special exception.

The landowners appealed to the trial court, and it reversed the decision of the board

of adjustment. The board of adjustment appealed the trial court’s order. The

(continued . . .)

(Pa. Cmwlth. 2004). In determining whether findings are supported by substantial evidence, the

Court’s scope of review is whether “there is a rational support in the record, when reviewed as a

whole, for the agency action.” Republic Steel Corp. v. Workers’ Compensation Appeals Board

(Shinsky), 421 A.2d 1060, 1062-63 (Pa. Cmwlth. 1980).

5

Pennsylvania Supreme Court held that the board of adjustment was an adjudicatory

tribunal, not an agency, and, thus, could not be aggrieved by the trial court’s order.

Accordingly, it lacked standing to appeal.

The Charter Board counters that Lansdowne is not applicable because

the Charter Board has been assigned functions that give it a stake in the outcome of

its decisions. The Charter Board claims to have been modeled after the State

Ethics Commission, which was created to administer, prosecute, enforce, and

adjudicate cases under the Public Official and Employee Ethics Act, 65 Pa. C.S.

§§1101-1113. Specifically, pursuant to the Charter, the Charter Board has the

power and duty to “[h]ear and decide all complaints alleging violations of the

Charter and Administrative Code.” CHARTER BOARD ORDINANCE §III.A(1); R.R.

117a. Further, the Charter Board may impose penalties, initiate preliminary

investigations, issue subpoenas, adopt rules and regulations, issue advisory

opinions, enforce and interpret the Charter and “have all other powers necessary”

to effectuate the Charter. CHARTER BOARD ORDINANCE §§II and III.A.(1)-(7); R.R.

114a-117a. As such, the Charter Board’s interest in appeals from its decisions is

direct and substantial.

The basic principle of standing is that a person is not adversely

affected or aggrieved by a judicial determination unless he has a direct and

substantial interest in the matter. William Penn Parking Garage, Inc. v. City of

Pittsburgh, 346 A.2d 269, 280 (Pa. 1975). In the context of an agency, “when the

legislature statutorily invests an agency with certain functions, duties and

responsibilities, the agency has a legislatively conferred interest in such matters.”

Pennsylvania Game Commission v. Department of Environmental Resources, 555

A.2d 812, 815 (Pa. 1989). Here, the Charter Board argues that its interest is direct

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and substantial because the trial court’s ruling directly conflicts with its ability to

enforce and interpret the Charter. If the Charter Board is unable to appeal a

reversal, its authority as guardian of the Charter is compromised.

We agree with the Charter Board that its functions are different from

those of a zoning board, i.e., the tribunal held to have lacked standing in

Lansdowne. The Charter was adopted pursuant to the Home Rule Law, 53 Pa. C.S.

§2941. A home rule charter has the force and status of an enactment of the

legislature. In re Addison, 122 A.2d 272 (Pa. 1956). Where an agency has been

given “certain functions, duties and responsibilities” it is deemed to have been

“conferred” an interest, absent statutory language to the contrary. Pennsylvania

Game Commission v. Department of Environmental Resources, 555 A.2d 812, 815

(Pa. 1989). Through direct democracy, the citizens of the City enacted the Charter

Board’s enabling legislation, i.e., Amendment I of the Charter. The Charter

confers upon the Charter Board the power and duty to enforce and interpret the

Charter, adopt necessary rules and regulations, and conduct investigations. The

Charter does not limit the Charter Board’s interest to that of adjudicating disputes.

Thus, the Charter Board has a direct and substantial interest in this appeal.6

6

In his brief to this Court, Mayor Spencer argues that the Charter Board is without authority to

hear any cases and, thus, lacked jurisdiction to adjudicate this case. The Mayor admits that he

did not raise this issue to the trial court, but argues it is not waived because it involves subject

matter jurisdiction.

The Charter Board counters that Amendment I, Section 2(b) of the Charter gives it

jurisdiction to

hear and decide all cases alleging violations of the Charter or Administrative

Code, except that its jurisdiction shall not extend to any case arising under the

Ethics Code or the Personnel Code. Insofar as permitted by state law the Board

shall issue binding opinions, impose penalties and administrative fines, refer cases

for prosecution, and conduct investigations on its own initiative and on referral or

complaint. City Council shall appropriate sufficient funds to enable the Board to

(Footnote continued on the next page . . .)

7

In his second standing argument, Mayor Spencer cites our Supreme

Court’s seminal decision in Lyness v. State Board of Medicine, 605 A.2d 1204 (Pa.

1992), which held that the right to a fair and impartial tribunal prohibits the

commingling of prosecutorial and adjudicatory functions. Mayor Spencer argues

that the appeal to this Court is being prosecuted by the Charter Board’s solicitor,

who advised the Charter Board in the instant adjudication. The solicitor appeared

at the evidentiary hearing, giving advice to the Charter Board outside the presence

of counsel for both parties. Mayor Spencer contends that the Charter Board’s

appeal violates Lyness because it impermissibly commingles adjudicatory and

prosecutorial functions of the Charter Board.

In Lyness, the agency in question was a professional licensing board

whose members determined there was sufficient evidence to initiate a disciplinary

(continued . . .)

perform the duties assigned to it, including expenses for independent counsel and

other necessary staff.

CHARTER, AMENDMENT I, §2(B); R.R. 61a-62a. Accordingly, the Charter Board argues that it

has authority to hear this case and if the Mayor wanted to challenge this authority he needed to

raise that issue before the trial court. We agree.

A home rule charter has the force and status of an enactment of the legislature. In re

Addison, 122 A.2d 272 (Pa. 1956). As such, it is presumed constitutional and the burden of

proving otherwise rests on the party alleging unconstitutionality. Cali v. City of Philadelphia,

177 A.2d 824 (Pa. 1962). Constitutional challenges do not need to be raised at the administrative

agency level, as agencies do not decide constitutional questions. See 2 Pa. C.S. §753. However,

constitutional challenges must be made to the first court to hear the appeal. Lehman v.

Pennsylvania State Police, 839 A.2d 265, 276 (Pa. 2003).

Although Mayor Spencer attempts to categorize this issue as one of subject matter

jurisdiction in order to avoid waiver, it is really a challenge to the constitutionality of the Charter

provision giving the Board the authority to decide, inter alia, the complaint against Mayor

Spencer. The Mayor needed to challenge the constitutionality of the Charter before the trial

court. Because he failed to do so, it is waived. Newcomer v. Civil Service Commission of

Fairchance Borough, 515 A.2d 108, 110 (Pa. Cmwlth. 1986) (constitutional challenge not raised

before the trial court is waived on appeal to this Court).

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action against a physician and, then, later adjudicated the merits of the action

brought against the physician. The Lyness court was concerned with the licensee’s

right to a fair and impartial tribunal, and its focus was on the hearing before the

administrative agency. Here, Mayor Spencer does not claim that the Charter

Board’s prosecutorial and adjudicatory functions were not properly separated

during the investigation and hearing phase of the proceeding. Lyness is inapposite.

Accordingly, we deny Mayor Spencer’s motion to quash appeal.

Charter Board Appeal

The Charter Board’s first issue on appeal is whether the trial court

applied the correct standard of review. The Charter Board contends that the trial

court incorrectly applied the “capricious disregard” standard because that standard

should only be used in rare cases where a fact finder actually ignores evidence.

The Charter Board contends that it did not ignore the Geffken Declaration; it

considered and rejected this evidence as not credible. The Charter Board contends

that its credibility determination is entitled to deference.

Mayor Spencer counters that the Charter Board capriciously

disregarded the Geffken Declaration by dismissing it as incredible without

explanation. Mayor Spencer argues that deference to a fact finder’s credibility

determination is appropriate only where the fact finder has observed the demeanor

of the witness, which did not occur with respect to the Geffken Declaration.

Mayor Spencer argues, alternatively, that the Charter Board considered only the

parties’ stipulation and not the Geffken Declaration itself.

9

It is axiomatic that findings of fact in a local agency’s adjudication

must be supported by substantial evidence. 2 Pa. C.S. §754(b).7 Substantial

evidence is evidence that a reasonable mind might accept as sufficient to support a

conclusion. SSEN, Inc. v. Borough Council of Borough of Eddystone, 810 A.2d 200,

207 (Pa. Cmwlth. 2002). An appellate court may not reweigh the evidence or make

credibility determinations. Leon E. Wintermyer, Inc. v. Workers’ Compensation

Appeals Board (Marlowe), 812 A.2d 478, 487-88 (Pa. 2002). However, an

appellate court may “overturn a credibility determination if it is arbitrary and

capricious or so fundamentally dependent on a misapprehension of material facts,

or so otherwise flawed, as to render it irrational.”8 Agostino v. Township of

Collier, 968 A.2d 258, 263-64 (Pa. Cmwlth. 2009). A fact finder capriciously

disregards evidence “when there is a willful and deliberate disregard of competent

7

Section 754(b) of the Local Agency Law states:

(b) Complete record.--In the event a full and complete record of the proceedings

before the local agency was made, the court shall hear the appeal without a jury

on the record certified by the agency. After hearing the court shall affirm the

adjudication unless it shall find that the adjudication is in violation of the

constitutional rights of the appellant, or is not in accordance with law, or that the

provisions of Subchapter B of Chapter 5 (relating to practice and procedure of

local agencies) have been violated in the proceedings before the agency, or that

any finding of fact made by the agency and necessary to support its adjudication

is not supported by substantial evidence. If the adjudication is not affirmed, the

court may enter any order authorized by 42 Pa.C.S. §706 (relating to disposition

of appeals).

2 Pa. C.S. §754(b).

8

In addition, where the fact finder has not observed the witness testify and cannot assess witness

demeanor, a mere conclusion on credibility is inadequate; the fact finder must explain the

reasoning for the determination. See Daniels v. Workers’ Compensation Appeal Board (Tristate

Transport), 828 A.2d 1043, 1053 (Pa. 2003) (workers’ compensation judge must articulate an

“objective basis for the credibility determination” of an expert who testifies by deposition in

order to permit effective appellate review).

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testimony and relevant evidence which one of ordinary intelligence could not

possibly have avoided in reaching a result.” Id. at 264 (quoting Arena v.

Packaging Systems Corporation, 507 A.2d 18, 20 (Pa. 1986)).

In the present case, the trial court did not err in applying the

capricious disregard standard. Leon E. Wintermyer, 812 A.2d at 487 (holding that

“review for capricious disregard of material, competent evidence is an appropriate

component of appellate consideration in every case in which such question is

properly brought before the court”). Mayor Spencer correctly points out that the

Charter Board provided no explanation for its rejection of the Geffken Declaration,

which was highly relevant and competent evidence because Geffken was the

person who directly hired the Employees. Indeed, the Geffken Declaration is the

only evidence of when and how the hirings occurred. Therein, Geffken states that

he was solely responsible for the decision to hire the Employees and that the offers

were made and accepted prior to Mayor Spencer taking office. Consequently, it is

impossible to make a factual finding on the hiring of Employees without

considering the Geffken Declaration.9

In its second issue, the Charter Board argues that the trial court erred

in finding that the Board’s decision was not supported by substantial evidence.

Specifically, the Charter Board contends that Geffken was Mayor Spencer’s “agent

and subordinate.” Charter Board Brief at 59. It contends that Mayor Spencer

9

We disagree with Mayor Spencer’s argument that the Charter Board considered only the

stipulation regarding Geffken’s proposed testimony and not the Geffken Declaration itself.

Although the Charter Board did state in its order that it found the stipulation not credible, when

read in context the Board was referring to the substance of Geffken’s proffered “testimony,” as

summarized in his declaration. Thus, the Charter Board did consider the Geffken Declaration;

however, as discussed above, the Board capriciously disregarded the Geffken Declaration in

reaching its decision.

11

directed Geffken to hire the Employees, in violation of the Charter and

Administrative Code. Relatedly, the Charter Board contends that a local agency is

not required to accept stipulated facts which conflict with other facts in the record,

and it may reach alternate conclusions from the evidence presented. The Charter

Board contends that it did so in this case by reaching a different conclusion than

that advocated by Mayor Spencer regarding the chain of events that led to the

hiring of the Employees.

We agree with the trial court that the Charter Board’s finding that

Mayor Spencer hired the Employees was not supported by substantial evidence.

While the Charter Board is not required to accept uncontradicted evidence as

conclusive, it must cite some affirmative evidence to support an alternative

conclusion. Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485,

512 (1984) (“When the testimony of a witness is not believed, the trier of fact may

simply disregard it. Normally the discredited testimony is not considered a

sufficient basis for drawing a contrary conclusion.”); see also California Shoppers,

Inc. v. Royal Globe Insurance Co., 221 Cal. Rptr. 171, 196 (Cal. Ct. App. 1985)

(“If a witness testifies, for instance, that it was not raining at the time of the

collision, and if the jury disbelieves that testimony, such disbelief does not provide

evidence that it was raining at the time of the collision.”). The Charter Board does

not point to any evidence supporting its conclusion that it was Mayor Spencer who

hired the Employees, only that the Mayor wanted the Employees hired and met

with Geffken to discuss hiring the Employees. The only evidence in the record

about how and when the hirings came about was the Geffken Declaration, which,

as discussed above, the Charter Board capriciously disregarded. In sum, the

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Charter Board’s finding of fact that Mayor Spencer hired the Employees was not

supported by substantial evidence.

Further, a fact finder, including an administrative agency such as the

Charter Board, is required to accept stipulated facts as binding if the stipulation is

clear and unambiguous on its face. Professional Insurance Agents Association of

Pennsylvania, Maryland and Delaware, Inc. v. Koken, 777 A.2d 1179, 1186-87

(Pa. Cmwlth. 2001); Klinger v. Workmen’s Compensation Appeal Board, 413 A.2d

432 (Pa. Cmwlth. 1980). In the present case, the parties stipulated that Geffken, if

called to testify at the hearing, would testify in a manner consistent with his

declaration. While the Charter Board was required to accept this stipulation as

binding, the Board was not required to accept the content of the Geffken

Declaration as binding because assessing the credibility of even uncontradicted

evidence is the sole province of the fact finder. However, as discussed above, the

Board capriciously disregarded the Geffken Declaration by not explaining its

credibility determination.

The Charter Board’s final argument is that the trial court improperly

reweighed the evidence. Specifically, the Charter Board argues that the trial court

improperly credited the Geffken Declaration after the Board found it was not

credible. The Charter Board argues that it explained its rationale for rejecting the

Geffken Declaration as not credible; therefore, that determination was supported

by substantial evidence. The Charter Board asserts that the trial court overstepped

its authority by reweighing the evidence and making credibility determinations.

We agree with Mayor Spencer that the trial court did not substitute its

own judgment for that of the Charter Board. Rather, the trial court reviewed and

summarized the evidence. In doing so, the trial court observed that the Geffken

13

Declaration was the only evidence of when the Employees were hired. The trial

court made no findings regarding the accuracy of the content of the Geffken

Declaration, only that it was relevant and competent evidence that the Charter

Board capriciously disregarded. As explained above in the discussion of the

Charter Board’s first issue, the trial court committed no error in so holding.

Conclusion

For all of the foregoing reasons, the Mayor’s motion to quash is

denied and the order of the trial court is affirmed.10

______________________________

MARY HANNAH LEAVITT, Judge

Judge Leadbetter did not participate in the decision in this case.

10

Mayor Spencer also raises several alternative arguments to justify the trial court’s holding,

including whether the Charter Board violated the Mayor’s due process rights or committed an

error of law. Because the trial court properly found that the Charter Board’s decision was not

supported by substantial evidence and the Board capriciously disregarded evidence, we do not

address these alternative arguments.

14

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

The Honorable Vaughn D. Spencer, :

Mayor of the City of Reading :

:

v. : 1377 C.D. 2013

:

City of Reading Charter Board, :

Appellant :

ORDER

AND NOW, this 8th day of August, 2014, the motion to Quash of the

Honorable Vaughn D. Spencer, Mayor of the City of Reading, is DENIED and the

order of the Berks County Court of Common Pleas, dated July 16, 2013, is hereby

AFFIRMED.

______________________________

MARY HANNAH LEAVITT, Judge