Attorney's severance agreement appears to damage Glendale's case

BY foxsports • June 11, 2015

If the City of Glendale's legal case for voiding its arena lease agreement with the Coyotes rests on Arizona Statute 38-511 and the notion that former city attorney Craig Tindall violated conflict of interest clauses by taking a job as Coyotes general counsel, that case could be in jeopardy, two legal experts said Thursday.

Tindall resigned as Glendale City attorney in late February 2013 (the resignation became official on April 1 of that year). He left the city well before negotiations with IceArizona began on the arena lease agreement in late May. However, Glendale kept Tindall on a six-month retainer, and he was paid his full salary through September 2013. He became general counsel for the Coyotes in August.

While serving as city attorney, Tindall worked on a prior agreement for Glendale when Greg Jamison tried to buy the Coyotes. In an email originally obtained by the Arizona Republic, Tindall also advised Councilman Gary Sherwood and then-councilmembers Yvonne Knaack and Manny Martinez on the Coyotes' current agreement via e-mail four days before it was approved, and while he was still on the six-month retainer.

Glendale could use this correspondence to argue that Tindall was involved in creating the document that became the Coyotes' current deal, but attorney Dan Barr of of the law firm Perkins Coie said that argument appears flawed.

"Tindall is answering a factual question that he is contractually obligated to answer under his separation agreement with the City of Glendale," Barr wrote in an email. "He is not a Coyotes employee at the time. If this is the only involvement Tindall has with the IceArizona deal before Glendale agrees to it, I cannot imagine what the problem is."

FOX Sports Arizona obtained a copy of Tindall's severance agreement. Within that agreement are three pertinent passages that likely constitute a waiver of conflict-of-interest concerns while outlining Tindall's limited duties with the city during his six-month retainer. The latter would call into question whether Tindall could have been "significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the state, its political subdivisions or any of the departments or agencies," as the statute reads.

Paragraph C of the Recitals section of the severance agreement states that the city will continue to employ Tindall on a six-month retainer: "for limited consulting services and assistance to the City regarding information related to his past duties ..."

Paragraph 2 of the Agreement section states that: "Employee will be available for up to five hours per two-week period from the date of this Agreement to the Separation date to respond to factual questions regarding matters Employee previously handled for the City; provided however, employee will not provide legal advice to the city except by a separate agreement.

Rodney Smith, director of the sports law and business program at ASU's Sandra Day O'Connor College of Law, said that a maximum of five hours every two weeks does not appear to constitute significant involvement by Tindall.

"If you were to ask me which side I would rather be on with regard to this issue, I would much rather be on the Coyotes' side than the city's," Smith said.

Paragraph 6 of the agreement states that: "The City, with informed consent from its attorneys, hereby waives any conflict of Employee or a law firm with which Employee may become affiliated regarding transactional matters previously handled by Employee for the City."

"The conflict provision is muddled, but the short answer is that it should suffice as a defense, although it will require some interpretation," Smith said. "It's very hard to interpret what that means because it's simply not clear, but one would anticipate it means that they are waiving any conflict they may have with Craig."

Barr added: "I would guess that Glendale might argue that this waiver contemplates Tindall going to a law firm that was on the other side of negotiating a transaction with the City of Glendale, and not the Coyotes. If so, that is a pretty weak argument." 

The Glendale Star reported Thursday that Glendale's conflict-of-interest case could rest on more than one former city employee going to work for the Coyotes. After Thursday's council vote, city attorney Michael Bailey told the Star his staff had uncovered correspondence from those employees that shows they had a hand in formulating the contract before leaving City Hall and going to work for the Coyotes.

"The facts support a conclusion that this state law was violated when former employees, who now work for the Coyotes, also heavily influenced and quietly assisted in the final negotiations of the contract," Bailey told the Star

However, when asked about that possibility on a conference call Thursday, Coyotes president, CEO and co-owner Anthony LeBlanc noted that there are no other former city employees employed by the team other than Tindall. A list of Coyotes staff members is available on the team's website. 

If the case does come down to interpretation of the city's severance agreement with Tindall, Smith, citing general legal practice, said the burden of proof would fall on the city.

"If there's confusion regarding interpretation it will be generally interpreted against the party that drafted it," he said. "The city drafted it. They bear the responsibility for clarity."

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