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Villines v. Harrison Housing Authority and the City of Harrison

Court of Appeals of Arkansas, Division III

February 28, 2018



          Stephen Lee Wood, P.A., by: Stephen Lee Wood, for appellants.

          Michael Mosley, for appellee.


         Appellants Amy Villines ("Villines") and Gerrie Parker ("Parker") appeal the October 7, 2016 and May 30, 2017 orders of the Boone County Circuit Court dismissing appellees, the City of Harrison ("Harrison") and the Harrison Housing Authority ("HHA"), from the lawsuit appellants had filed against them. Appellants contend that material questions of fact remain on the issues of whether Harrison was an actor in the termination of their employment, whether the HHA is a separate and independent agency with the authority to conduct its business independently of Harrison, and whether the HHA is entitled to charitable immunity from suit. We reverse and remand in part and reverse in part.

         I. Facts and Procedural History

         HHA is a municipal corporation created by Harrison pursuant to the Housing Authorities Act. See Ark. Code Ann. §§ 14-169-201 to 1108 (Repl. 1998) & (Supp. 2017). The HHA was created pursuant to a resolution passed by Harrison on July 28, 2011, to remedy "a shortage of safe or sanitary dwelling accommodations in the city available to persons of low income." According to the resolution that purported to create the HHA:

The HHA is created to act as an agent of the City of Harrison and shall have the powers and shall perform all of the functions set forth in A.C.A. Title 14-169-202 et seq. ("Act").

         Harrison, Ark., Res. No. 1095 (July 28, 2011) (emphasis added.) According to the HHA's executive director ("ED"), the HHA was created:

[F]or the purpose of engaging in the leasing and administration of subsidized housing programs. The [HHA] receives federal funding from the U.S. Department of Housing and Urban Development (HUD) and from the Arkansas Development Finance Authority (ADFA) under its HOME Program.

         The HHA is composed of five commissioners (the "Board") and additional officers and personnel, including an ED, who are employed as necessary to accomplish the HHA's mission through its programs. Pursuant to the HHA's bylaws, termination authority rests with the ED.

         The HHA is shown as a "department" of Harrison on Harrison's website and follows Harrison's personnel policies and schedule for closing its offices. Harrison processes the HHA's payroll, after which the HHA reimburses Harrison. The HHA receives its financing from HUD and ADFA to subsidize housing for persons with low income through its major program, the Section 8 Housing Choice Voucher Program. 42 U.S.C. § 1437f (2012).

         The HHA's predecessor entity was the City of Harrison, Arkansas Housing Agency (the "Agency"). Unlike the Agency, the HHA is governed by its independent board ("Board"), rather than being a "component unit of the City of Harrison, Arkansas." The HHA undisputedly has more "powers and financing capabilities" than did the Agency.

         Appellants Villines and Parker[1] worked for the HHA; however, they submitted their applications for employment to Harrison. Appellants were paid by checks drawn on Harrison's payroll account, and Harrison was shown as the "employer" on all W-2s issued to appellants during their employment with the HHA.

         In December 2013, appellants reported to the Board their suspicions that the then ED, Derrick White, had misappropriated money and other assets of the HHA for his personal use. The Board confronted White, and he resigned in August 2014. Despite the Board's promoting Parker to interim executive director ("IED") of the HHA and increasing both her salary and Villines's, appellants allege that Board members warned them that they would be immediately terminated if they discussed White's resignation with anyone outside the HHA.

         Harrison's mayor filed a complaint with Harrison's police department, which resulted in a criminal investigation of White's alleged thefts from the HHA. In December 2014, Villines and Parker were interviewed as a part of the investigation and gave written statements to the investigator.

         Also in December 2014, the HHA Board hired Chonda Tapley as the new ED. The Board instructed appellants to train Tapley for the position, but allegedly they failed to do so. There were multiple reported incidents of misconduct and insubordination by appellants that allegedly occurred after Tapley's arrival at the HHA. As a result, Tapley required appellants to attend a customer-service seminar for remedial training. In January 2015, Tapley also disciplined appellants on three occasions each. She told appellants that they would be subject to discipline "up to termination" if they engaged in "deceitful or insubordinate" behavior.

         It is undisputed that Tapley consulted four people before firing appellants, including a consultant who had previously worked with the HHA employees under the former ED. All four expressed to Tapley that she should fire appellants if they were not working as a team. After informing the Board of her decision to do so, Tapley fired both appellants on February 27, 2015, in the presence of two or three members of the Board. According to Tapley, it was her decision to fire Villines and Parker.

         Appellants filed for unemployment benefits, and it is undisputed that Harrison was shown as the "employer" on all documents issued regarding appellants' claims for benefits. Harrison indicated to the Arkansas Department of Workforce Services that appellants were fired for ...

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