FROM THE BOONE COUNTY CIRCUIT COURT [NO. 05CV-15-172]
HONORABLE GORDON WEBB, JUDGE
Stephen Lee Wood, P.A., by: Stephen Lee Wood, for appellants.
Michael Mosley, for appellee.
J. GLADWIN, JUDGE
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.
Facts and Procedural History
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.
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.
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.
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).
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.
Villines and Parker 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.
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.
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
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.
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.
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