Conflict of Interest in Board’s Administrative Decisions Does Not Necessarily Invalidate the Vote

Town of Merrimack v. David W. McCray (Norman Carr, Intervenor)
Town of Merrimack v. David W. McCray (Norman Carr, Intervenor)
No. 2003-484
Wednesday, April 21, 2004

In April 2003, the town and a town employee filed suit against Selectman David McCray, alleging that he disclosed confidential information about the employee. The employee and McCray then agreed to settle the case, and the superior court agreed to the employee’s motion for voluntary nonsuit. The board of selectmen then voted to drop its litigation against McCray and to pay McCray’s legal bills. The Merrimack Board of Selectmen is a five-member board. All five were present at the meeting at which these actions were taken. Three members, including McCray, voted in favor of the motion to end the litigation and to pay McCray’s legal bills. Two selectmen abstained from the vote.

Norman Carr, also a selectman, was one of the two selectmen who abstained. He filed a motion with the court to intervene in the case, arguing that the board’s vote was invalid because McCray had a conflict of interest and should have disqualified himself from voting. The trial court approved Carr’s motion to intervene and issued a temporary restraining order prohibiting the payment of McCray’s legal bills, but eventually approved the settlement agreement and denied Carr’s motion to strike the agreement. Carr appealed those decisions to the Supreme Court.

The Court held that the trial court mistakenly permitted Carr to intervene in the case because the case was already terminated when Carr filed his motion with the court. But the importance of this case for local officials is the Court’s holding on the conflict of interest issue raised by Carr. The Court restated its holding in Appeal of Keene, 141 N.H. 797, (1997): “A judicial or quasi-judicial act may be voided because of a conflict of interest, but an administrative or legislative act need not be invalidated if the conflicting interest did not determine the outcome.” The Court said the board of selectmen’s vote to settle the case and pay McCray’s legal bills was an administrative act, not a judicial or quasi-judicial act, and McCray’s vote did not determine the outcome of the board of selectmen’s decision, whether or not his participation in the voting was a conflict of interest.

This case also restates the law on abstentions in voting and their effect on the outcome of a vote, as held previously in Opinion of the Justices, 98 N.H. 530 (1953). The Court held that even if McCray hadn’t voted, the motion to pay his legal bills and to settle the case still would have passed with two affirmative votes. “So long as a majority of the board is present, only a majority of the votes actually cast is necessary to support an action. … That members of the [b]oard, including Carr, chose to abstain from voting does not defeat the action of the majority of those who voted.

In other words, a quorum (majority) of board members is needed for the board to take action. (In this case a quorum of the five-member board would have been three members). Under the rule established in Opinion of the Justices, even if only four members were present and two voted in the affirmative while two abstained, the motion would pass, 2-0-2.