Emmett trustees went against lawyers' advice. Now insurance won't cover legal costs.

Emmett Charter Township board members didn't take the advice of the township's attorney.

Now, its insurance company doesn't want to cover the costs associated with a lawsuit filed by a township board member against the township.

Steve Buller, the township's building official as well as a trustee, sued the township in October for "misclassifying" him as an independent contractor and not a regular employee. 

After the lawsuit was filed, the township filed a claim to the Michigan Risk Management Authority to cover the costs incurred from the case.

That claim was denied. The township has appealed to the Michigan Risk Management Authority's board of directors.

Buller, who also sits on the township board, has asked the the court to grant him more than $25,000, "equal to the economic value of the fringe benefits to which he was deprived" by the township and legal fees, according to his lawsuit.

Emmett Township building inspector sues the township

"The denial was caused by wrongful acts of four board members," Supervisor Tim Hill said. "If the appeal doesn't go through, then the residents unfortunately are going to have to pay through taxes." 

Buller was hired by the township in 1996 as building and mechanical inspector and plan reviewer. Two years later, he became the township's building official, according to his lawsuit. 

Buller was elected to the township board in 2012.

The board voted at a March 2014 meeting to change all building, mechanical, electrical and plumbing inspectors to independent contractors from W-2 employees.

Buller, Hill, as well as trustees Tom Gunning and Pat Dougherty all voted yes, according to meeting minutes.

Buller did not want to comment on why he voted yes because of the pending litigation. 

Prior to that vote, though, at a special board meeting in January 2014, discussions took place with Township Attorney John Macfarlane, attorney John K. Lohrstorfer and auditor Steven Bryer over whether Buller should remain a W-2 employee, and the board decided he should, according to meeting minutes.

Buller later sought legal advice as to whether he should be classified as a contractor.

At a meeting in May of last year, Macfarlane basically told the board that, by law, Buller had to be made an employee.

"I encouraged the board previously to make sure they comply with the state construction code, which means treating him as an employee," Macfarlane said at that meeting. "Under state law, building officials must be employees of the township. They may not be independent contractors."

At that same meeting, Gunning and Hill voted for a resolution to make Buller a township employee.

Four other board members, Dougherty, Treasurer Rachelle Myers, Clerk Tracy Myers-Malone and Trustee Dick Brown, all voted no. Buller abstained.

Dougherty, who was the township supervisor before Hill, said he voted no because he didn't believe the board had enough information and there were "issues that needed to be talked about."

"He didn’t become a building official," he said. "He is a building inspector. He has never been given any other authorities. He took on responsibilities that he shouldn’t have done. We have tried to get him not to do it."

In response to the township's appeal, the Michigan Municipal Risk Management Authority general counsel, James T. Mellon, noted Macfarlane's comments at the May 10 meeting and points out how the board was also advised by another attorney and a certified public accountant to make Buller an employee.

"The bigger picture here is that the township intentionally chose to misclassify Mr. Buller as an independent contractor as opposed to an employee in 2013 or early 2014,"  the response reads. "Despite the strong recommendations of its attorney John Macfarlane, another attorney, its CPA, and its wage committee, a majority of the township board refused to properly classify Mr. Buller as an employee. Now the township expects [the Michigan Municipal Risk Management Authority] to, in essence, be its employee benefits guarantor."

Buller's case has been assigned to Calhoun County Circuit Court Judge John Hallacy. No hearings have been scheduled. 

Contact Kalea Hall at (269) 966-0697 or khall@battlecreekenquirer.com. Follow her on Twitter at @bykaleahall.