Reimburse

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OFFICE OF THE ATTORNEY GENERAL

CHAUNCEY H. BROWNING. Jr.

MEMORANDUM

DATE: Oct. 6, 1982.

TO: Prosecuting Attorneys, County Commissions, County Boards of Education

FROM: Chauncey H. Browning, Attorney General

RE: Reimbursement of Public Officials and Employees for Attorneys' Fees Incurred in Defending Suits.

Within the past five months, the West Virginia Supreme Court of Appeals has issued two opinions relating to reimbursement of attorneys' fees incurred by public officials in defending themselves in litigation.

The first of these opinions is Powers v. Goodwin, _ W. Va. __ , 291 S.E.2d 466 (1982). This case dealt with the reimbursement of attorneys' fees for a county commissioner who had incurred such fees in defense of preliminary criminal proceedings and subsequently in defending a petition to remove him from office. The county commission in this instance voted to authorize the reimbursement of the attorneys' fees from county funds. The commission's action was challenged in the form of a suit to remove all three county commissioners for an unlawful expenditure of county funds. On appeal, the Supreme Court held, among other things, that:

"Where a neutral public body elects to indemnify one of its employees or another elected public official for attorneys' fees incurred as a result of their official duties there is a presumption that such indemnification was made in good faith; however, no such presumption of good faith arises where a public body elects to indemnify one or all of its own members for attorneys= fees absent an attorney general's opinion or a court order." Syl. pt. 4, Powers v. Goodwin, supra.

The second of the two cases is Martin v. Mullins, No. 15415 (W.Va. Sup. Ct. July 7, 1982), This case dealt with the reimbursement of attorney fees incurred by school board members in defending a federal civil rights suit brought by nine school board employees who claimed they had been unlawfully discharged. Three of the employees prevailed, were reinstated to their jobs and were awarded back pay. The county board voted to use board funds to pay the attorneys' fees incurred in defense of the case. Subsequently, as in Powers v. Goodwin, a removal proceeding was brought against the defendant board members on grounds that they had unlawfully expended board funds for their own benefit. On appeal, our Supreme Court made several holdings, two of which are expressed in the following syllabus points 1 and 3, respectively:

"The term 'good faith= in the context of a proceeding in state court under state law to determine whether indemnification of a public official for attorneys' fees and personal judgments is appropriate means that the official did not actually know or should not reasonably have known that the actions taken within the scope of his official responsibility violated another's constitutional rights. An after‑the‑fact determination that a violation of rights occurred as a result of official action does not ipso facto demonstrate a lack of good faith."

...

"A federal court determination in a 42 U.S.C. 1983 civil rights action that a public official has acted in bad faith is res judicata on that issue for purposes of indemnification for personal judgments or attorneys' fees where the holding was an integral part of the decision of the case or controversy before the federal court and all parties were aware or should have been aware of the res judicata implications for indemnity purposes of the court decision on bad faith,"

In both cases, the Supreme Court remanded the proceedings to the trial courts for further determinations in accordance with its opinions. Both opinions contain significant new law on the subject of reimbursement of attorneys' fees and we suggest that all prosecutors, county commission attorneys and board of education attorneys read these opinions in their entirety for the full details of the Court's holdings. In the remaining portion of this memorandum, we direct attention to the above‑quoted syllabus point 4 from Powers v. Goodwin, supra, particularly the segment dealing with the situation "where a public body elects to indemnify one or all of its own members for attorneys' fees."

The Court noted in Powers, that a distinction was to be made between situations where the public body was voting to indemnify others and where the public body was voting to indemnify itself or its own members. In the first situation, the Court said:

"The problem is comparatively simple when there is a neutral official or fiscal body that can pass upon the request for indemnity by one of its own employees or even by another elected or appointed official. Such a scheme is provided by statute in several jurisdictions. Where, for example, a municipality authorizes legal fees in defense of one of its police officers that determination is presumptively made in good faith and absent evidence of fraud or conspiracy should be beyond challenge..." 291 S.E.2d at 474.

But in the second situation, the Court acknowledged:

"However, with regard to those instances where a public body must make the determination whether to indemnify itself for attorneys' fees there is no presumption of regularity and the award can subsequently be challenged like any other illegal expenditure.

"Obviously, there will be instances where indemnification for attorneys' fees is so clearly the order of the day that there is eminently little risk of a subsequent determination that the appropriation was illegal. In such instances further formalities would appear to be pointless. In questionable cases it is possible to get an advance determination of the legality of indemnification through an Attorney General's opinion or a mandamus proceeding similar to the one that we traditionally employ to test the validity of bond issues. [Citations omitted.] While the mandamus proceeding is admittedly artificial in terms of a true adversarial confrontation, nonetheless, it succeeds in getting the question before a neutral arbiter in a comparatively expeditious fashion. Furthermore, we have observed in such cases that the lawyers representing the nominal respondent make a sincere effort to present the opposing side.

"Consequently, when a county commission or other fiscal body is in doubt about whether it is appropriate to expend county funds to indemnify itself for legal fees incurred as a result of the good faith discharge of its duties, it can bring a mandamus action against the sheriff or other appropriate ministerial officer to require him to issue the check for that purpose, ..." Id. at 474‑75.

You are all aware that public officials at all levels are being subjected to an ever‑increasing number of civil rights suits, removal proceedings and even criminal proceedings for acts done in the discharge of their duties. For the benefit of those who must advise local governmental units and officials in these matters, we have attempted in the following paragraphs to anticipate some of the questions and situations that may arise in light of the Court's language in Powers v. Goodwin,

1. In the event of removal proceedings or criminal proceedings against a public official for acts done in the discharge of his duties, the prosecuting attorney, who might normally represent that official, obviously cannot wear two hats. Therefore, the official must hire his own attorney. Depending upon the outcome of the proceedings, the official may ultimately be entitled to reimbursement of legal fees paid by him, but In any event, the official must incur the fees in the first instance. Under no circumstances should a public body employ the attorney for the public official. To do so would create ethical problems for the defense attorney, including the problem of uncertainty as to whom his attorney‑client relationship is with, it would also put the public body in a position of possibly taking on an obligation for attorneys' fees which ultimately may be the personal responsibility of the defendant official.

2. In civil suits, such as civil rights cases the public official may in many instances be defended by the prosecuting attorney or by other attorneys retained on a general basis to provide legal advice and representation to that official or the body of which he is a member. There are a number of county commissions and boards of education which have such attorneys. However, there may be a number of reasons why the prosecuting attorney or the generally retained attorneys cannot represent the official. In these situations, the official must hire his own attorney, and our previous comments would apply concerning the necessity that he incur the fees and then seek reimbursement if he subsequently can do so.

3. Normally, some disposition of suit or criminal proceedings against the official must be made before the question of reimbursement or indemnification for attorneys fees can be considered. For example, it would be premature and improper to indemnify an official for attorneys' fees incurred in defending a criminal action while the action is still pending. If the official were subsequently found guilty, the verdict in itself would likely be strong if not conclusive proof "that the act in question was not done in good faith. For this reason, the Attorney General will not issue an opinion on the propriety of reimbursement prior to disposition of the civil or criminal proceedings. For the same reason, it would seem that a mandamus action to compel reimbursement would be premature if filed before disposition of the underlying proceedings.

4. "Disposition of the proceedings" can take various forms. In criminal proceedings there might be either a verdict of guilty' or not guilty, or there could even be a trial resulting in a hung jury. Another possibility is that the criminal proceedings might be dropped or dismissed before trial. In civil cases, there is, likewise, the possibility of a hung jury or the more conventional alternatives of "judgment for plaintiff" or "judgment for defendant." In addition, there may be variations within these alternatives. A federal civil rights suit might result in a judgment for plaintiff but at the same time result in no personal liability for damages because the defendant may be found to have acted in good faith. Moreover, another possible disposition of a civil suit is settlement of the case. Because of the variety of possible results, no attempt will be made here to set forth hard and fast rules on when reimbursement would be permissible. Each situation must be assessed on the basis of its peculiar facts, and circumstances, keeping in mind the holdings and reasoning of the Supreme Court in the two recent cases discussed herein. All local governmental bodies are cautioned to seek the advice of their attorneys before considering any request for reimbursement or indemnification of attorney fees. In any event, it is clear that a public body which is contemplating the reimbursement of one or more of its own members should, for its own protection, first seek an Attorney General=s opinion or a court order.

CH.B/tmt

_________________________________________________________________

Supreme Court of Appeals of West Virginia.

Cecil POWERS, et al. v. James R. GOODWIN, et al.

(Two cases). Nos. 15445,15446. May 17, 1982.

170W.Va.151, 291S.E.2d466

Syllabus by the Court

1. In order to determine the standard of proof required to remove a member of a county commission or to hold him personally liable for misappropriated funds, W.Va. Code, 11‑8‑26 [1963] , 11‑8‑29 [1933] and 11‑8‑31 [1933] must be read in pari materia. Under these sections a commissioner may be removed from office upon proof of negligent misappropriation and can be required to reimburse the county upon proof of wilfull misappropriation.

2. Where a county official incurs a loss in the discharge of his official duty in a matter in which the county has an interest, and in the discharge of a duty imposed or authorized by law and in good faith, the county has the power to appropriate funds to reimburse him, unless expressly forbidden.

3. The rules governing whether a public official is entitled to indemnification for attorneys' fees are the same in both the civil and criminal context. In order to justify indemnification from public funds the underlying action must arise from the discharge of an official duty in which the government has an interest; the officer must have acted in good faith; and the agency seeking to indemnify the officer must have either the express or implied power to do so.

4. Where a neutral public body elects to indemnify one of its employees or another elected public official for attorneys' fees incurred as a result of their official duties there is a presumption that such indemnification was made in good faith; however, no such presumption of good faith arises where a public body elects to indemnify one or all of its own members for attorneys' fees absent an attorney general's opinion or a court order.

5. The public as a whole has an interest in seeing duly elected officials continue in office and where members of a county commission are made defendants in a removal proceeding as a result of actions taken or omitted in the good faith discharge of their official duties, they are entitled to reimbursement for their attorneys' fees.

NEELY, Justice:

We have before us a case involving alleged official misconduct that raises complex issues about the payment of attorneys' fees by a local fiscal body when actions are brought against members or employees of that body in their official capacity. This case is important because we have not previously spoken in West Virginia to the issue of attorneys' fees incurred in litigation arising from the performance of official duties.

This is an appeal from an order of the Circuit Court of Boone County in a case where plaintiffs below, Cecil Powers, etc., sought to remove defendants below, James R. Goodwin, Ed Cooke, and James W. Armstrong from the County Commission of that county. The grounds asserted for removal were that the members of the Boone County Commission, with defendant James R. Goodwin abstaining, voted to pay $14,547.64 to defendant James R. Goodwin to reimburse him for attorneys' fees expended in defense of preliminary criminal proceedings before a Boone County grand jury and subsequently in defending a petition to remove Commissioner Goodwin from office. The threatened criminal action arose from Commissioner Goodwin's alleged misuse of a county commission telephone credit card.

The court below concluded that the defendants Ed Cooke and James W. Armstrong authorized an unlawful expenditure of county money for an unauthorized purpose under the provisions of W. Va. Code, 11‑8‑26 [1963], but that since such expenditure was arguably made in good faith in reliance upon an erroneous written opinion on the matter from the assistant prosecuting attorney of Boone County, the expenditure was not a removable act under W. Va. Code, 11‑8‑31 [1933]. The plaintiffs below now appeal this determination on the grounds that if the expenditure was unauthorized, the defendant commissioners should have been removed.

The defendants below, however, did not survive this proceeding unscathed. The trial court concluded that since the expenditure for attorneys' fees was unauthorized, defendant James R. Goodwin is primarily liable for the repayment of that amount and the other defendant commissioners are secondarily liable and must repay the county $14,547.64 in event that James R. Goodwin defaults on his primary obligation. Defendants below appeal the money judgment on the grounds that the attorneys' fees were paid in good faith upon reliance on a written opinion from the statutory attorney for the county commission, and that, therefore, defendants Armstrong and Cooke are not personally liable for expenditures approved by them in good faith.

The trial court disposed of this case on summary judgment. The amount of attorneys' fees was stipulated; the reasons for Mr. Goodwin's incurring the attorneys' fees were stipulated; the written opinion of the assistant prosecuting attorney of Boone County was before the court; and, while the element of good faith was central to many of the conclusions necessary to the resolution of this case, neither plaintiffs nor defendants asked to introduce any evidence on that subject, relying instead on circumstantial evidence already before the court.

Unfortunately, the trial court's decision in this case is inconsistent with the law. Essentially, if the defendants were sufficiently culpable to be required to repay the money personally, they were sufficiently culpable to be removed from office. Under our statutes, a county commission member can be removed from office upon a lower standard of proof than that required to make him personally liable for misappropriated funds. Consequently, we must reverse and remand the case for further proceedings consistent with this opinion.

There are three statutes at issue in this case. The first is W. Va. Code, 11‑8‑26 [1963] that provides: Except as provided in sections fourteen‑b, twenty‑five‑a and twenty‑six‑a ['' ll‑8‑14b, ll‑8‑25a] of this article, a local fiscal body shall not expend money or incur obligations:

(1) In an unauthorized manner;

(2) For an unauthorized purpose;

(3) In excess of the amount allocated to the fund in the levy order;

(4) In excess of the funds available for current expenses.

Notwithstanding the foregoing and any other provision of law to the contrary, a local fiscal body or its duly authorized officials shall not be penalized for a casual deficit which does not exceed its approved levy estimate by more than three per cent, provided such casual deficit be satisfied in the levy estimate for the succeeding fiscal year.

The second statute at issue is W. Va. Code, 11‑8‑29 [1933] that establishes the standard of proof required to create personal liability on the part of a county commission member. That statute provides: A person who in his official capacity wilfully participates in the violation of sections twenty‑five [ ' 11‑8‑25] and/or twenty‑six [' 11‑8‑26] of this article shall be personally liable, jointly and severally, for the amount illegally expended. [Emphasis supplied by Court]

The third statute at issue is W. Va. Code, 11‑8‑31 [1933] that sets forth the standard of proof for a criminal prosecution or removal from office. That statute provides:

A person who in his official capacity wilfully violates the provisions of this article shall be guilty of a misdemeanor, and upon conviction shall be fined not more than five hundred dollars, or confined in jail not more than one year, or both. Upon conviction he shall also forfeit his office.... The State, a taxpayer, or the tax commissioner may institute and prosecute to final judgment any proceeding for the removal of a member of a local fiscal body who has wilfully or negligently violated any of the provisions of this article.... [Emphasis supplied by Court]

When we read these statutes together it can be observed that a "wilful" violation is required for either a criminal prosecution or a successful action to establish personal liability against a county officer. However, Code, 11‑8‑31 [1933] allows removal of the county officer if he "negligently" misappropriates money. The court below found that the defendant commissioners acted in "good faith" and, therefore, could not be removed. However, the court went on to find that since the appropriation was unlawful, the defendant commissioners should be required to repay the money personally. Succinctly stated, the principle that the court misapplied is this: if the defendant commissioners were sufficiently culpable that they should be required to repay the money, they are obviously sufficiently culpable to be removed. On the other hand if the defendant commissioners acted both in good faith and non‑negligently they should neither be removed nor required to repay the money. The intermediate ground is the exact opposite of what the court found: namely, that if the defendant commissioners acted in good faith, but negligently, they should be removed from office but should not be required to repay the money. Since no evidence other than the nature of the transactions themselves was introduced on the issue of "good faith" vel non, the court on remand must undertake a minute examination of this question in light of the guidelines set forth in this opinion.

The expansion of personal liability on the part of government officers during the last twenty years and the concurrent restriction of the defense of sovereign immunity has made the question of the indemnification of government employees for the expenses of litigation one of increasing public concern. See generally, Berman, "Integrating Governmental and Officer Tort Liability," 77 Colum.L.Rev. 1175 (1977); Shepsle, "Official Errors and Official Liability," 42 Law and Contemporary Problems 35; Cass, "Damage Suits Against Public Officers," 129 U.Pa.L.Rev. 1110 (1981). West Virginia has no statutes directly relating to whether an officer should be reimbursed for attorneys' fees that he incurs in defending actions against himself personally as a result of his official conduct. FN1

FN1. W. Va. Code, 29‑12‑1 et seq., mandates, in part, that the state board of insurance of West Virginia provide liability insurance coverage for all state officials, agents and employees. Hence, in any action covered by such insurance, the insurance company that provided the policy is responsible for hiring legal counsel.

We observe that as a matter of practice the Attorney General of the State of West Virginia provides legal counsel to the Commissioner of Welfare, the Commissioner of Corrections, and numerous other state officials and employees who are sued personally for activities arising out of the performance of their official duties. This is authorized by W. Va. Code, 5‑3‑2 [1972]. FN2

FN2. "The attorney general shall appear as counsel for the State in all causes pending in the supreme court of appeals, or in any federal court, in which the State is interested; he shall appear in any cause in which the State is interested that is pending in any other court in the State, on the written request of the governor, and when such appearance is entered he shall take charge of and have control of such cause; he shall defend all actions and proceedings against any state officer in his official capacity in any of the courts of this State or any of the federal courts when the State is not interested in such cause against such officer, but should the State be interested against such officer, he shall appear for the State; he shall institute and prosecute all civil actions and proceedings in favor of or for the use of the State which may be necessary in the execution of the official duties of any state officer, board or commission on the written request of such officer, board or commission; he may consult with and advise the several prosecuting attorneys in matters relating to the official duties of their office, and may require a written report from them of the state and condition of the several causes, in which the State is a party, pending in the courts of their respective counties; he may require the several prosecuting attorneys to perform, within the respective counties in which they are elected, any of the legal duties required to be performed by the attorney general which are not inconsistent with the duties of the prosecuting attorneys as the legal representatives of their respective counties; when the performance of any such duties by the prosecuting attorney conflicts with his duties as the legal representative of his county, or for any reason any prosecuting attorney is disqualified from performing such duties, the attorney general may require the prosecuting attorney of any other county to perform such duties in any county other than that in which such prosecuting attorney is elected and for the performance of which duties outside of the county in which he is elected the prosecuting attorney shall be paid his actual traveling and other expenses out of the appropriation for contingent expenses for the department for which such services are rendered; the attorney general shall keep in proper books, a register of all causes prosecuted or defended by him in behalf of the State or its officers and of the proceedings had in relation thereto, and deliver the same to his successor in office; and he shall preserve in his office all his official opinions and publish the same in his biennial report.

"Upon request of any member of the West Virginia national guard who has been named defendant in any civil action arising out of that guardsman's action while under orders from the governor relating to national guard assistance in disasters and civil disorders, the attorney general shall appear as counsel for and represent such guardsman."

Furthermore, W. Va. Code, 7‑4‑1, [1971] provides that the prosecuting attorney of a county shall be the statutory attorney for the county commission, and W. Va. Code, 7‑4‑3 [1969] provides that in counties having a population of more than one hundred thousand the county commission may retain separate counsel for all civil matters. Thus, we conclude that as a matter of practice the State and its political subdivisions provide counsel for most of the routine types of civil litigation, such as federal court actions based upon 42 U.S.C. ' 1983, that are likely to be brought against state and county officials personally for activities arising from the discharge of their official duties.

In the case before us, however, the defendant Commissioner Goodwin incurred a substantial part of his attorneys' fees in defense of an impending criminal prosecution that was, in fact, arrested at the preliminary stage. Apparently, although the record is not developed on this subject in great detail, Commissioner Goodwin was successful in averting a Grand Jury indictment in Boone County through the efforts of his lawyers. Obviously, under circumstances where the prosecuting attorney was to be the initiator and prosecutor of the criminal action against a county commissioner, it would have been impossible for him or any member of his office simultaneously to represent the commissioner in such proceeding as statutory attorney for the county commission.

III

There are hundreds of reported cases among the states in this century touching upon the propriety of indemnification of government officials for attorneys' fees arising from official conduct. See generally Annot, 13. A.L.R. 736 (1921); Annot, 71 A.L.R.3d 90 (1976). A fair reading of the admittedly divergent cases on this subject leads to the conclusion that the majority view is succinctly stated in McQuillin, Municipal Corporations, 3d Ed., ' 12.137 where the learned commentator says: Where a municipal officer incurs a loss in the discharge of his official duty in a matter in which the corporation has an interest, and in the discharge of a duty imposed or authorized by law, and in good faith, the municipal corporation has the power to appropriate funds to reimburse him, unless expressly forbidden. And this it may do, although it may turn out that the officer exceeded his legal rights and authority. Thus, where a mayor in performance of the duties of his office, in good faith, exceeds his authority which results in a judgment against him for false imprisonment, it is competent for the city to indemnify him for the expense of such judgment. And, although reimbursement for expenses incurred in civil actions is sometimes denied, it has been held to be legal for a municipality to appropriate a reasonable amount of its funds to employ counsel to defend its police officers in actions for false imprisonment and other actions.

Cases may and often do arise, in which towns may assume to indemnify their agents where the result of a trial at law clearly shows that the acts were illegal, provided such acts were done by the agents in the bona fide discharge of their duties. A city may assume the expense of a suit against its agent or its servant in which the interests of the municipality are directly involved. Where a police officer, in the discharge of his duty, in attempting to kill a mad steer at large in a crowded street, shot a boy who recovered damages therefor, the city, it was held, had a right to reimburse him for the amount paid as damages. So it may indemnify its school committee, it has been held, for expenses incurred in defending an action for an alleged libel contained in a report made by them in good faith and in which judgment was rendered in their favor. A variety of circumstances in which the municipal corporation may indemnify or reimburse appear from adjudications.

The rules governing whether a public official is entitled to indemnification for attorneys' fees appear to be fairly simple. In order to justify indemnity from public funds, the underlying action must arise from the discharge of an official duty in which the government has an interest; the officer must have acted in good faith; and the agency seeking to indemnify the officer must have either the express or implied power to do so.FN3 The problem, of course, is how to apply these criteria in any particular case.

FN3. W. Va. Code, 7‑1‑3 [1923] provides in part that county commissions "have the superintendence and administration of the internal police and fiscal affairs of their counties...." We have interpreted this phrase as granting implied powers reasonably necessary to carry out the express responsibilities of the county commissions. See State ex rel. County Court v. Arthur, 150 W.Va. 293, 145 S.E.2d 34 (1965); Mohr v. The County Court of Cabell County, 145 W.Va. 377, 115S.E.2d806(1960).

Frequently the reported cases make a distinction between civil and criminal proceedings, and in general the cases appear to disfavor indemnification in criminal proceedings. E.g. Guerine v. Northlake , 1 Ill.App.3d 603, 274 N.E.2d 625 (1971). Criminal law presents greater obstacles to frivolous prosecutions than does civil law, and, obviously, there is a reluctance on the part of the prosecuting authorities to bring actions against other government officers for alleged crimes arising out of the performance of official duties. Police officers are most frequently the subject of criminal prosecutions as a result of either assault and battery or even murder during the pursuit and apprehension of suspects.

Our efforts to glean from the common law of American jurisdictions a workable test on the issue of indemnification for attorneys' fees incurred in criminal prosecutions arising from the discharge of official duties are confounded by the fact that in most places the problem is resolved by statute.FN4

FN4. See, e.g., Fla.Stat.Ann. '' 111.065 ‑.07 (West Supp.1980); Ill.Ann.Stat. ch. 127, '' 1301‑1302 (Smith‑Kurd Supp. 1979); Kan.Stat.Ann. '' 75‑6101 to ‑6116 (Supp.1980); Minn.Stat. ' 3.736, subd. 9 (West Supp. 1980); N.C.Gen.Stat. ' 143‑300.4 (1977); Ohio Rev. Code Ann. ' ' 9.87, 109.36‑.366 (Page Supp. 1980); 42 Pa.Cons.Stat.Ann. ' 5110(c) (Purdon Supp. 1980); Pa.Stat.Ann. tit. 53, ' 5311.303 (Purdon Supp. 1980); Wis.Stat. '' 165.25(6), 895.46 (1974 & Supp. 1980).

For example, in Wassef v. State of New York, 98 Misc.2d 505, 414 N.Y.S.2d 262 (1979) the Court of Claims declined to indemnify an x‑ray technician for attorneys' fees incurred in defending a prosecution for sexual molestation arising from an incident concerning a patient in a state hospital. However, the court resolved the case exclusively on the basis of the statute and suggested that the limitation of indemnity to civil matters was too narrow. In this regard the court said:

The Court must comment that the inclusion of indemnification for the successful defense of certain criminal matters within Public Officers Law, Section 17 should be carefully studied by the Legislature. The Court can foresee certain areas of State employment which may be unusually prone to the receipt of frivolous and unfounded complaints against employees, to their superiors or to the other governmental agencies. These might be by members of the public, co‑employees or even by local law enforcement officers. When or if these are reduced to criminal charges, the employee may be required to expend large sums of money for defense of the same, irrespective of their merits. To require the employee, upon successfully defending an unfounded criminal charge to seek redress solely by suing the complainant for malicious prosecution could surely be an undue burden. Without passing on the merits of the fact pattern contained in the claim at bar, the Court urges that certain such situations within the scope of employment could and should be included within the statutory provisions.

The case before us is a good example of why so many reported cases have asserted the general rule that a government official cannot be indemnified for attorneys' fees arising from a criminal prosecution. There appears to be no dispute that the defendant Goodwin misused his county telephone credit card by charging personal calls on the county telephone account. While the Grand Jury ultimately concluded that under some de minimis rule the misappropriation of county funds in this regard did not warrant a criminal prosecution, nonetheless, the grand jury did recommend Commissioner Goodwin's removal from office. Certainly no reasonable person could conclude that the underlying criminal charge arose from the good faith discharge of Commissioner Goodwin's official duties. Yet in this analysis we have worked backward from the grand jury's conclusion that Commissioner Goodwin was guilty to the perfectly logical inference that his larcenous activities had nothing whatsoever to do with the discharge of his duties.

Like the New York court in Wassef, supra, we can envisage situations where a criminal prosecution does, indeed, arise directly from the good faith discharge of official duties. In the case of State ex rel. Miller v. Smith, 168 W.Va. 745, 285 S.E.2d 500 (1981) this Court held that any citizen may appear before a county Grand Jury to seek an indictment, notwithstanding the reluctance of the county prosecutor to seek such an indictment himself. Consequently, in West Virginia there are fewer impediments to frivolous criminal prosecutions than there are perhaps elsewhere.

While the number of criminal prosecutions emanating directly from the discharge of official duties is small, they are not necessarily nonexistent. In this regard we can at least envisage prosecutions against police officers for the use of excessive force and proceedings in criminal contempt against local officials who are accused of failing to follow either state or federal court orders. It would appear, of course, that conviction of a common law or statutory crime is conclusive proof that the official was not acting in good faith and was outside the scope of his official duties. Civil and criminal contempt, however, present much more difficult problems since those proceedings are frequently the forum for adjudication of complex governmental issues and, notwithstanding the possibility of a nominal criminal sanction, the officials charged with contempt have no personal interest in the subject of the litigation. Furthermore, exoneration either by a preliminary dismissal or a verdict of not guilty in an ordinary criminal prosecution is not necessarily conclusive proof that the official acted in good faith and was within the scope of his official duties.

This analysis leads us then, ineluctably, to an inquiry concerning the method by which a determination of whether to indemnify a public official for attorneys' fees can be made in the absence of a specific statute on that subject. The problem is comparatively simple when there is a neutral official or fiscal body that can pass upon the request for indemnity by one of its own employees or even by another elected or appointed official. Such a scheme is provided by statute in several jurisdictions. See e.g., Ill.Stat.Ann. ch. 127, ' 1302(b)‑(c) (Smith‑Kurd Supp.); Wash.Rev.Code Ann., '' 4.92.060‑070 (Supp. 1980). Where, for example, a municipality authorizes legal fees in defense of one of its police officers that determination is presumptively made in good faith and absent evidence of fraud or conspiracy should be beyond challenge. What happens, however, when the decision to indemnify for attorneys' fees is made by a body on behalf of one or all of its own members?

In the leading case of Board of Com'rs v. Casper National Bank, 56 Wyo. 132, 105 P.2d 578 (1940), the court pointed out:

It is a maxim recognized in early common law that no man can be judge in his own cause.... It is a maxim which must at once commend itself to every reasonable man, and which ought not to be disregarded, except when a countervailing public policy by reason of the necessity of the situation exists.... There can be no doubt that here the individual defendants in the suit became judges in their own case, and that for the purpose of protecting themselves against a charge of having extorted money from the county for their individual benefit. It is perfectly apparent that the court must apply the maxim in such a situation. It is true that they are in a less favorable position than officials whose expenses, according to the cases above cited, may be paid by the city or similar organization. But that is a penalty, if a penalty it is, the risk of which they assume when they take office.

In light of the increasing frequency of legal proceedings against public officials in their individual capacity, but arising out of official duties, it is not possible to adopt the "tough luck" approach of the Wyoming court in 1940. Yet the problem of a person being judge in his own cause is no less bothersome today than it was forty‑two years ago. In this jurisdiction we have long recognized that there are occasions where a court must, under the rule of necessity, decide a matter in which it is interested itself. State ex rel. Brotherton v. Blankenship, 157 W.Va. 100, 207 S.E.2d 421 (1973) and, cases cited therein. However, with regard to those instances where a public body must make the determination whether to indemnify itself for attorneys' fees, there is no presumption of regularity and the award can subsequently be challenged like any other illegal expenditure.

Obviously, there will be instances where indemnification for attorneys' fees is so clearly the order of the day that there is eminently little risk of a subsequent determination that the appropriation was illegal. In such instances further formalities would appear to be pointless. In questionable cases it is possible to get an advance determination of the legality of indemnification through an Attorney General's opinion or a mandamus proceeding similar to the one that we traditionally employ to test the validity of bond issues. E.g., State ex rel. City of Charleston v. Coghill, 156 W.Va. 877, 207 S.E.2d 113 (1973); State ex rel. State Building Commission v. Moore, 155 W.Va. 212, 184 S.E.2d 94 (1971); State ex rel. County Court v. Demus, 148 W.Va. 398, 135 S.E.2d 352 (1964); State ex rel. County Court v. Bane, 148 W.Va. 392, 135 S.E.2d 349 (1964). While the mandamus proceeding is admittedly artificial in terms of a true adversarial confrontation, nonetheless, it succeeds in getting the question before a neutral arbiter in a comparatively expeditious fashion. Furthermore, we have observed in such cases that the lawyers representing the nominal respondent make a sincere effort to present the opposing side.

Consequently, when a county commission or other fiscal body is in doubt about whether it is appropriate to expend county funds to indemnify itself for legal fees incurred as a result of the good faith discharge of its duties, it can bring a mandamus action against the sheriff or other appropriate ministerial officer to require him to issue the check for that purpose. This particular procedure impresses itself upon our imagination because in the case before us the county commissioners assert their reliance upon an opinion of the county prosecutor's office as evidence of the good faith of their appropriation. The plaintiffs, however, point to the power that the county commission has over the salary of an assistant prosecuting attorney and point in addition to an almost contemporaneous fifteen percent increase in the pay of the assistant prosecuting attorney who rendered the advisory opinion that supported the commission's expenditure in this case. No similar relationship of dependency exists with regard either to the State Attorney General or the local circuit court.

Part of the attorney's fees paid to Commissioner Goodwin were incurred as a result of his defense of a removal action grounded in his misuse of the county telephone credit card. If it is determined upon remand that Commissioner Goodwin did, indeed, misuse his county telephone charge card for his personal purposes then it can be concluded that his defense of a criminal prosecution concerning such misuse of the card did not emanate from the discharge of his official duties. In that event it must reasonably follow that the removal petition against Commissioner Goodwin was justified by Commissioner Goodwin's own illegal activities. Since the expenditure of funds for his attorneys' fees was entirely for his own personal benefit, it cannot be said that in any regard the political body had an interest in either his defense or vindication. Consequently, if the facts disclose attorneys' fees in defense of a meritorious prosecution, then the appropriation of money for attorneys' fees was improper.

Nevertheless, there may indeed be occasions where officers of a fiscal body must defend themselves against removal proceedings as a direct result of actions which they took entirely in their official capacity and exclusively for the benefit of the body politic that they are serving. Our statutes are comparatively specific with regard to those expenditures that a public body is authorized to make, see, e.g., W. Va. Code, 7‑1‑3 et seq. (powers and duties of county commissions) and even good faith but negligent deviations from the explicit mandate of the statutes are arguably grounds for removal. W. Va. Code, 11‑8‑31 [1933]. We have usually held that there must be either intentional deviation from the requirements of the statute or such extreme negligence as to reflect a palpable neglect of duty to warrant removal. Lane v. Blair, 158 W.Va. 359, 250 S.E.2d 124 (1979); Evans v. Hutchinson, 158 W.Va. 359, 214 S.E.2d 453 (1975) ; see also Kemp v. Boyd, 166 W.Va. 471, 275 S.E.2d 297 (1981). Wilfulness and palpable neglect of duty, obviously, are issues that must be determined in a court of record and no legitimate public policy is served by, in effect, forcing the premature resignation of public officials because they are incapable of defending themselves in such proceedings, although they may ultimately be exonerated.

More to the point, the voters have a legitimate interest in protecting their duly elected officials from being hectored out of office through the constant charge of bankrupting attorneys' fees on their own personal resources. One of the obligations of a duly elected public official is to continue to discharge the office to which he was elected since it can reasonably be assumed that he was elected because of his public stand on issues of concern to the voters. Consequently, continued service in an elected position is not a question in which only the officeholder has a personal concern; in a democratic government predicated upon the competition of policies and ideas through different candidates for elected office, the public itself has an interest in seeing persons elected by a majority continue in office.

Having discussed at length the question of when indemnification for attorneys' fees is permissible and, along the way, having suggested procedures for fiscal bodies to make such determinations in the future, we now address the tests that the trial court should employ on remand both to determine whether Commissioners Cooke and Armstrong are or are not immune from civil liability for their decision to indemnify Commissioner Goodwin and to determine whether the two commissioners should or should not be removed. As noted earlier, W. Va. Code, 11‑8‑29 [1933] makes the commissioners personally liable for expenditures which constitute wilful violations of the two code sections prohibiting unauthorized expenditures. We have defined wilful in this context as "[intending the result which actually comes to pass; design; intentional; not incidental or involuntary." State ex rel. Koontz v. Smith, 134 W.Va. 876, 882, 62 S.E.2d 548 (1950). Hence, in order to hold the commissioners liable, the trial court must find that they intended to expend the funds for what they thought to be an unauthorized purpose. In other words, "good faith" is a defense to personal liability under the statute. FN5

FN5. The "wilful" standard of W. Va. Code , 11‑8‑29 [1933] offers public officials greater protection from liability than does the standard fashioned by the United States Supreme Court for suits brought against public officials under 42 U.S.C. ' 1983. In Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), plaintiffs sought damages under 42 U.S.C. ' 1983 against the Governor of Ohio, the President of Kent State University, and several officers and enlisted men in the Ohio National Guard for their actions leading up to the deaths of several students in May 1970. After the court of appeals had ruled that the defendants were protected by absolute immunity, the Supreme Court reversed by setting out a means of determining qualified immunity. Under Scheuer a public official is immune from ' 1983 suits for "acts performed within the course of official conduct" if there were reasonable grounds for his belief that his actions were legal and if the public official actually had such a good faith belief. Id. 416 U.S. at 247‑48, 94 S.Ct. at 1691‑92. Hence, to qualify for immunity under Scheuer a public official must pass both the objective test of reasonable grounds and the subjective test of good faith. See Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975). Under W. Va. Code, 11‑8‑29 [1933] he need pass only the latter.

Since under W. Va. Code, 11‑8‑31 [1933], removal is warranted for merely negligent conduct, as well as wilful conduct, the trial court must resolve the removal issue by employing a standard different from that used to determine personal liability. In Lane v. Blair, 162 W.Va. 281, 250 S.E.2d 124 (1978), this Court found sufficient negligence on the part of school board members to warrant their removal. In Lane the Logan County Board of Education had received $630,000 to be used for vocational construction only. The board placed the funds in certificates of deposit that were inadvertently given a code number that indicated that the funds were available for general expenditures. The evidence showed that the board members were aware that they were consistently overspending their budget. Yet, when they were consistently able to spend "unexpected" funds to meet the budget, none of the members sought to investigate the situation. In finding the members to be negligent, we emphasized that once the members were aware that they were spending funds they did not know they had, they were under a duty to investigate. We held that their failure to do so was negligent. Id. at 126.FN6

FN6. Lane, supra in text, however, is hypothetically a good case for the award of attorneys' fees even though the board members were ultimately removed. While the board members were negligent, they did not divert money for any reprehensible personal reason. Whether they were negligent was a close question, and since the legality of their actions could only have been determined after a court action, lack of advance indemnity for attorneys' fees would have had a chilling effect on their ability to litigate the issue of the propriety of their actions. The entire removal proceeding in that case was in the nature of a political law suit (in the best sense) designed to determine the legal propriety of a course of official conduct that the board members had pursued in good faith.

Adapting Lane to this case the trial court should determine the question of negligence by examining the official duties of county commissioners, the reasonableness of the two commissioners' actions in light of their statutory duties, and the circumstances surrounding their decision to indemnify Commissioner Goodwin.FN7

FN7. We recognize that, while our decision today offers more protection to a public official on the issue of liability than does Scheuer, see note 5, supra, our holding as to removal is identical to that of Scheuer. Since W. Va. Code, 11‑8‑31 [1933] permits removal for either wilfull or negligent violations, a public official must pass both the subjective test of good faith and the objective test of reasonable grounds.

It would appear to this Court that on the facts presented to the court below in the joint motions for summary judgment that the reimbursement of Mr. Goodwin for his attorneys' fees was probably an unauthorized expenditure since the foundation of both the criminal prosecution and petition to remove him from office was personal malfeasance entirely unrelated to the discharge of his official duties. However, on remand it must be determined whether the other commissioners acted: (1) in good faith and non‑negligently; (2) in good faith but negligently; or (3) in bad faith and wilfully. If the commissioners acted in good faith and non‑negligently, then they can neither be removed from office nor be required to repay the money. If, however, the commissioners acted in good faith, but negligently, they can be removed, but cannot be held personally liable for the misappropriated funds. Finally, if Commissioners Cooke and Armstrong acted both in bad faith and wilfully, they can be removed from office and can be held personally liable for repayment of the misappropriated funds. The ultimate resolution of the case with regard to Commissioners Cooke and Armstrong depends entirely upon the resolution of these questions and the case is reversed and remanded for such further proceedings. While the case against Commissioner Goodwin appears stronger, since the record appears to justify a factual holding that Commissioner Goodwin did misuse his credit card, we are reluctant to make such a determination here since the trial court made no explicit findings on that issue and the case below appeared to be concerned with the attorney fee issue alone. Accordingly, the trial court must, upon remand, determine the issue of Commissioner Goodwin's alleged illegal acts as a threshold question.

Reversed and remanded.

____________________________________________________________________________________

Supreme Court of Appeals of West Virginia.

Linda MARTIN, et al. v. Donald R. MULLINS, et al.

No. 15415. July 7, 1982.

170W.Va. 358, 294S.E.2d 161, 5 Ed.Law Rep. 1053

NEELY, Justice:

In 1976 the Lincoln County Board of Education fired five untenured school bus drivers, an untenured cook, and an untenured laborer; transferred a tenured employee of the school board; and transferred and demoted a school principal to a teaching position. These nine individuals then brought suit in the United States District Court under 42 U.S.C. '' 1983, 1985, 1986, 1988, and directly under the First and Fourteenth Amendments to the Constitution of the United States against the Board of Education of Lincoln County, the Superintendent of Schools, and school board members Donald R. Mullins, Hurxel Woodall, and Billy Joe Smith, in their individual as well as their official capacities.

On 18 April 1978, U.S. District Court Judge Charles H. Haden, II entered a final order with regard to some of the matters in dispute. This order determined that six of the nine plaintiffs had been properly discharged, but that three others had been discharged for political reasons in direct violation of their First and Fourteenth Amendment rights as articulated in Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976). The United States District Court ordered that the three prevailing employees be reemployed and awarded back pay from the date of their termination.FN1

FN1. The order of the district court provided in pertinent part: Inasmuch as both parties demanded a jury trial in this action, this Court may only grant permanent equitable relief in this action. Since injunctive relief may be awarded against the individual Defendants only in their official capacities, Burt v. Board of Trustees, [4th Cir., 521 F.2d 1201] supra, no relief may be awarded at this time against the individual Defendants in their individual capacities. As the Court in Burt stated:

"Since the named defendants possessed the power to reinstate and cause disbursement of back pay from public funds only in their official capacities as trustees, any judgment, to be consistent with the initial characterization as 'equitable' must necessarily run against defendants as officials. Private citizens are not empowered to reinstate or order back pay out of school board or county funds." 521 F.2dat 1204.

Accordingly, this Court will grant the following equitable relief against the Board of Education under 28 U.S.C. ' 1331 and against the named members of the Board and the Superintendent in their official capacities under both 28 U.S.C. ' 1331 and ' 1343(3): The prevailing Plaintiffs are to be reinstated to their former positions with the Board of Education within a reasonable period, not to exceed sixty days from the date of entry of this Order. The prevailing Plaintiffs are to be awarded back pay from the date of their termination until the date of reinstatement. The amount of back pay awarded shall be such as will compensate the prevailing Plaintiffs for any net pecuniary loss they may have sustained as a result of their illegal termination. Thomas v. Ward, 529 F.2d 916 (4th Cir. 1975). This amount will include any increases in salary and any pension rights, medical or health insurance benefits, or other fringe benefits which would have accrued to the benefit of the prevailing Plaintiffs had they not been illegally terminated.

This back pay award is to be paid from the funds of the Board of Education of Lincoln County. Such an award does not violate the restrictions of the Eleventh Amendment. "While the actions of counties and other subdivisions of a state generally constitute a 'state action' for purposes of the fourteenth amendment, a county or other state subdivision 'is not necessarily a state defendant for purposes of the eleventh amendment.' " Burt v. Board of Trustees, 521 F.2d 1201 (4th Cir. 1975), quoting from Edelman v. Jordan, 415 U.S. 651, 667 n.12, 94 S.Ct. 1347, 1357 n.12, 39 L.Ed.2d 662 (1974).

The plaintiffs in the civil rights action in the U.S. District Court originally sought reinstatement to their former positions, recovery of lost wages and other employment benefits, and the award of compensatory and punitive damages against the defendant board members individually. When the federal complaint and a motion for a preliminary injunction were served upon the defendant board members, they retained the Charleston law firm of DiTrapano, Mitchell, Lawson and Field to represent both the board of education as an official, collective entity and themselves individually.

The plaintiffs in the appeal before us brought an action in the Circuit Court of Lincoln County to remove the defendant members of the Lincoln County Board of Education from office on the grounds that they had improperly used county funds to pay attorneys' fees in their own defense of the federal civil rights action arising from the wrongful discharges. In addition, the plaintiffs in the removal proceeding asserted that after the U.S. District Court entered its order determining liability with regard to the three improperly discharged employees, the defendant members of the board of education voted a settlement of back pay and damages that came entirely from funds of the board of education, thus insulating the board members from personal liability. Thus, the gravamen of plaintiffs' complaint in the case before us is that the defendant board members diverted money belonging to the Lincoln County Board of Education to their own purposes in violation of W.Va.Code,61-10-15 [1977] which provides: It shall be unlawful for any member of a county commission, overseer of the poor, district school officer, secretary of a board of education, supervisor or superintendent, principal or teacher of public schools, or any member of any other county or district board, or for any county or district officer to be or become pecuniarily interested, directly or indirectly, in the proceeds of any contract or service, or in furnishing any supplies in the contract for, or the awarding or letting of, which as such member, officer, secretary, supervisor, superintendent, principal, or teacher, he may have any voice, influence or control.…

Plaintiffs maintain that violation of Code, 61‑10‑15 [1977] is a removable act under W.Va.Code, 6‑6‑7 [1923]. Jordan v. McCourt, 135 W.Va. 79, 62 S.E.2d 555 (1950).

The Circuit Court of Lincoln County took the case under advisement based upon the pleadings, the proceedings in the U.S. District Court, the stipulated facts, and agreed statements concerning evidence to which witnesses would testify if they were in court. Upon this record the circuit court rendered judgment for the defendants on the grounds that there was no evidence that the law firm retained by the board of education charged the board of education for services rendered to the defendants as individuals and because the court believed that the defendant board members were unaware that there was any obligation on their part to contribute individually to the ultimate settlement of the damage issue in the unlawful discharge case.

All of the proceedings below in the case under consideration occurred before either the circuit court or the parties had the benefit of our opinion in the case of Powers v. Goodwin, 170 W.Va. 151 291 S.E.2d 466 (1982), and since many of the issues in this case concerning attorneys' fees and indemnification were not addressed within the structure that we outlined in Powers for disposing of those issues, the case is remanded for further proceedings consistent with this opinion and Powers, supra.

The broad statement of the law applicable to the case before us is found in syllabus points 2 and 3 of Powers, supra, where we said:

The U.S. District Court spoke in its order about the defendants' "good faith" when it said:Likewise, the Defendants are not protected by their protestations that their actions were taken in good faith. First of all, the Court finds that the terminations of the prevailing Plaintiffs could in no way be characterized as being in good faith. Even if they were, however, while the good faith defense may preclude a damage award, it is not a defense to the exaction of back pay incident to equitable relief. Wood v. Strickland, 420 U.S. 308 [95 S.Ct. 992, 43 L.Ed.2d 214] (1975); Owens [Owen] v. City oj Independence, 560 F.2d 925, 940 (8th Cir. 1977).

Since, as we shall discuss in greater detail infra, our standard for determining "good faith" in the context of determining whether public officials should be indemnified for personal judgments or attorneys' fees is identical to the federal standard for determining "good faith" immunity from a personal judgment in 42 U.S.C. 1983 actions, ordinarily a federal district court order adjudicating the question of good faith should be given res judicata effect. In the case before us, however, the part of the federal court order quoted above was not dispositive of an issue then remaining before the court, namely damages.

Under 42 U.S.C. 1983 an entirely good‑faith violation of a civil right can result in the type of equitable relief that was awarded the wrongfully discharged Lincoln County school employees‑namely reinstatement with back pay. Good faith becomes relevant when a personal judgment is sought against individually‑named defendants, Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975), or when punitive damages are demanded against a state or local agency, Duchesne v. Sugarman, 566 F.2d 817 (2d Cir. 1977). FN2

FN2. In Duchesne, 566 F.2d at 831 the court stated:

A ' 1983 plaintiffs burden does not vary depending upon whether he is seeking injunctive or monetary relief; the elements of the cause of action remain precisely the same. In both instances he must prove that the defendant caused him to be subjected to a deprivation of constitutional rights. But, no greater burden is imposed on the plaintiff seeking money damages. The requested relief becomes relevant only in terms of whether or not the defendant is entitled to assert good faith as a defense. (The defense is, of course, only available when money damages are sought). See generally Developments in the Law‑Section 1983 and Federalism, 90 Harv.L.Rev. 1133(1977).

Consequently, while the district court spoke to the issue of good faith, that issue was not fully developed. In fact, since the order by its very terms contemplated further proceedings before a jury to determine whether damages should be awarded against individual members of the school board, obviously further testimony focusing on the issue of good faith was expected to be forthcoming.FN3

FN3. The district court's order was quite specific in its contemplation of further proceedings going directly to the good faith issue. The court said: Inasmuch as the parties are entitled to seek a jury trial on the several claims for damages from the alleged violation of the Fourteenth Amendment and 42 U.S.C. ' 1983 rights, none may be fixed by the Court in this aspect of the proceeding, which sounds wholly in equity. See Burt v. Board of Trustees, 521 F.2d 1201 (4th Cir. 1975). The Plaintiffs shall inform this Court whether they desire to go to trial on their damage claims within thirty days of the entry of this Order.

Therefore, the federal court's comment concerning good faith cannot be given res judicata effect in this proceeding.

In the Powers case, supra, we made numerous references to the concept of "good faith" without ever defining it in the context of this type of proceeding. We are now called upon to define "good faith" as that concept relates to indemnification for attorneys' fees and personal judgments. Obviously, if the defendants before us were acting in good faith, they committed no removable act under Powers, supra, when they reimbursed themselves for attorneys' fees.

In general our standard for determining whether an official has acted in good faith tracks the federal standard. Initially, we hold that an official is not acting in good faith when he knows or reasonably should know that actions taken within the scope of his official responsibility violate another's constitutional rights. However, a mere after‑the‑fact determination that a violation occurred does not necessarily demonstrate lack of good faith. As the Supreme Court said in Runyon v. McCrary, 427 U.S. 160, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976):

Whenever the facts in a case are disputed, a court perforce must decide that one party's version is inaccurate. Yet it would be untenable to conclude ipso facto that that party had acted in bad faith. 427 U.S. at 183‑84, 96 S.Ct. at 2600‑01.

The problem of after‑the‑fact court determinations of civil rights violations is one of staggering dimensions. It is unreasonable to hold public officials personally liable for actions that are legal at the time they are taken but which subsequently become illegal as a result of a change in the law. This was made clear by the Supreme Court in Wood v. Strickland, supra.

Therefore, in the specific context of school discipline, we hold that a school board member is not immune from liability for damages under ' 1983 if he knew or reasonably should have known that the action he took within the sphere of official responsibilities would violate the constitutional rights of the student affected, or if he took the action with the malicious intention to cause a deprivation of constitutional rights or other injury to the student. That is not to say that school board members are "charged with predicting the future course of constitutional law." Pierson v. Ray, 386 U.S. [547] at 557 [87 S.Ct. 1213 at 1219, 18 L.Ed.2d 288]. A compensatory award will be appropriate only if the school board member has acted with such an impermissible motivation or with such disregard of the student's clearly established constitutional rights that his action cannot reasonably be characterized as being in good faith. 420 U.S. at 322, 95 S.Ct. at 1001.

The rule regarding "good faith" of public officials in the context of indemnity for attorneys' fees or personal judgments is correctly stated by C. Rhyne, in The Law of Local Government Operations , 1071‑72 (1980) where the commentator says: Not only must the municipal official act sincerely and in good faith, but also with a reasonable belief that his actions are lawful. A municipal official is afforded no immunity if he knows or reasonably should know that the actions he takes within the sphere of his official responsibility violate another's constitutional rights or if he takes an action with the malicious intent to cause a deprivation of rights or injury to another. Immunity is not denied to a municipal official who takes an action in good faith involving an area of the law where the existence and contours of constitutional rights are not settled.

Furthermore, the Supreme Court stated in Owen v. City of Independence, 445 U.S. 622, 100 S.Ct. 1398, 63 L.Ed.2d 673 (1980):After all, it is the public at large which enjoys the benefits of the government's activities, and it is the public at large which is ultimately responsible for its administration. Thus, even where some constitutional development could not have been foreseen by municipal officials, it is fairer to allocate any resulting loss to the inevitable cost of government borne by all the taxpayers, than to allow its impact to be felt solely by those whose rights, albeit newly recognized, have been violated. 445 U.S. at 655.

In the case before us it is important to note that the landmark case of Elrod v. Burns, supra, that articulated a constitutional right of non‑policy making, non‑confidential, will‑and‑pleasure government employees to immunity from discharge for the exercise of First and Fourteenth Amendment rights was decided by the United States Supreme Court approximately one month after the improper discharge of the Lincoln County school personnel of concern to us in this case. Consequently, if the defendant members of the board of education reasonably believed that the political firing of non‑policy making, non‑confidential government employees could be lawfully accomplished based upon a longstanding body of prior law, then their motives alone do not support a finding that they acted in bad faith.

The one flexible criterion in any inquiry into the question of good faith concerns whether the official "had reason to know" that his actions were illegal. As the Supreme Court stated in Gomez v. Toledo, 446 U.S. 635, 100 S.Ct. 1920, 64 L.Ed.2d 572(1980):

As our decisions make clear, whether such immunity has been established depends on facts peculiarly within the knowledge and control of the defendant. Thus we have stated that "[i]t is the existence of reasonable grounds for the belief formed at the time and in light of all the circumstances, coupled with good‑faith belief, that affords a basis for qualified immunity of executive officers for acts performed in the course of official conduct." Scheuer v. Rhodes, [416 U.S.], at 247‑248 [94 S.Ct. at 1691‑92]. The applicable test focuses not only on whether the official has an objectively reasonable basis for that belief, but also on whether "[t]he official himself [is] acting sincerely and with a belief that he is doing right," Wood v. Strickland, supra, at 321 [95 S.Ct. at 1000]. There may be no way for a plaintiff to know in advance whether the official has such a belief or, indeed, whether he will even claim that he does. The existence of a subjective belief will frequently turn on factors which a plaintiff cannot reasonably be expected to know. For example, the official's belief may be based on state and local law, advice of counsel, administrative practice, or some other factor of which the official alone is aware. 446 U.S. at 641, 100 S.Ct. at 1924.

Actual notice of the law is a comparatively simple concept; however, whether a particular official had reason to know the law is very difficult to apply. Unfortunately the personal backgrounds of public officials are so diverse as to make it almost impossible to establish one standard of "reasonable knowledge" that can be applied to all public officials. Many local officials are full‑time government employees with substantial experience and access to well‑trained and qualified lawyers. Others, and members of the boards of education fall into this class, are part‑time, unpaid officials with little prior experience in government. As the Supreme Court stated in Owen, supra : Doctrines of tort law have changed significantly over the past century, and other notions of governmental responsibility should properly reflect that evolution. No longer is individual "blameworthiness" the acid test of liability; the principle of equitable loss‑spreading has joined fault as a factor in distributing the costs of official misconduct.