An attorney hired by the Dunwoody City Council said it is not “crystal clear” if there is a conflict of interest for Dunwoody Homeowners Association members to serve on city boards but advises against them doing so “in order to protect the city.”

The City Council hired in June Hulsey, Oliver & Mahar, a Gainesville law firm, to weigh in on its directive that members of the DHA should be prohibited from serving on city boards because of a potential conflict of interest. The law firm states in a legal opinion that it agrees with the city’s legal counsel that there “is a conflict of interest that arguably tends to impair the independence of his or her judgment or action in the performance of official duties.”

The legal opinion of Hulsey, Oliver & Mahar of Gainesville was released in a memo dated Aug. 19 at the City Council’s Aug. 22 meeting after council members met in a brief executive session, according to Bob Mullen, city spokesperson.

The city also released at the meeting the June 6 memo sent by the city’s attorneys to council members and DHA members serving on city boards, including the Planning Commission and Zoning Board of Appeals, laying out their argument why they believed there is a conflict of interest for DHA members to serve on city boards. 

The council did not discuss the memos at the Aug. 22 meeting and approved discussing them at the Sept. 12 meeting.

Dunwoody Mayor Denis Shortal and City Attorney Cecil McClendon. (Photo Dyana Bagby)

In his opinion about a conflict of interest arising if DHA members also serve on city boards, Abbott S. Hayes of Hulsey, Oliver & Mahar, acknowledged that the matter of a conflict of interest “is not crystal clear.”

“Like most ethical issues not involving direct financial conflict, it is a judgment call,” he states in the legal memo.

But Hayes states he clearly believes it is a conflict of interest for city appointees and elected officials to be active members of the DHA and advises such membership “should be avoided to in order to protect the city.”

Hayes points to the DHA’s July 17 email to members and the public statement posted to its website concerning the controversy surrounding DHA members and city boards that erupted after the June 6 memo became public.

In the second paragraph the DHA board states, “For decades, DHA has been the strong voice of Dunwoody homeowners and has worked to protect the single-family character of the city. We have fought some developments—and supported others. The DHA has encouraged project adjustments that we believed enhanced the proposed projects or reduced their impact on Dunwoody.”

Hayes, in his legal opinion to the City Council, takes issue with the DHA noting it supports and opposes developments.

“To align oneself with the DHA, which expressly states that it supports and opposes development, would raise a potential appearance of conflict,” states Hayes.

Hayes goes on to say that the city’s ethics code mandates a public servants’ primary responsibility in their performance of their official duties is to “put the city first and avoid conflicts.”

Dunwoody Assistant City Attorney Lenny Felgin.

“A city attorney’s primary responsibility is representing a city client is to protect that city. Based on those considerations I agree with Mr. [Cecil] McLendon and Mr. [Lenny] Felgin, as well as Ms. [Laurel] Henderson, that active participation by Dunwoody elected officials and appointees in DHA activities, such as service on committees, service as an officer, and attendance at meetings to consider rezoning and other applications made to the city, is a conflict of interest that arguably tends to impair the independence of his or her judgment or action in the performance of official duties …,” states Hayes.

The city’s attorneys are Cecil McClendon and Lenny Felgin of Marietta-based Riley McClendon LLC, and they wrote and distributed the June 6 memo.

Laurel Henderson is an attorney with the Georgia Interlocal Management Risk Agency, or GIRMA. Municipalities pay dues to GIRMA and when sued GIRMA will handle the legal defense and also pay out some settlement costs if necessary. Henderson advised the council last month to settle the Center for Discovery/Manget Way lawsuit for $850,000.

But who gave the direct order to email the June 6 legal memo to DHA members on city boards remains unclear.

Mayor Denis Shortal did call at least two DHA members who serve on city boards to ask them to resign from the DHA or resign their city appointed post before the email memo was sent out. The memo also included an attachment threatening legal action against anyone who received it if they spoke publicly about it.

Gerri Penn immediately resigned from the ZBA after the phone call with the mayor but Bill Grossman, who said he never officially received the June 6 memo, remains on the Planning Commission. The council backed off enforcement of the forced resignations at a June 24 special called meeting.

Hulsey, Oliver & Mahar was also tasked with determining if the City Council violated the Open Records Act during its June 13 executive session when the June 6 memo was discussed. The firm stated the executive session “was proper.”

In that executive session, the council was discussing litigation, real estate and personnel, according to an affidavit signed by Shortal, according to the memo from Hulsey, Oliver & Mahar.

“I understand that the issue and concerns discussed in the memo arose, in part, because they were raised in pending litigation against the city, which litigation is presently being handled primarily by Laurel Henderson,” wrote Hayes.

“I understand that the issues and concerns raised in the memo were part of a consultation with city attorneys to review the pending case and also to avoid potential future litigation and claims of conflicts of interest,” Hayes states.

Shortal has argued publicly that DHA members cannot serve on city boards because they put the city at risk for costly litigation.

Hayes also includes in his opinion the city did not approve a policy behind closed doors that bans elected officials or board appointees from being on or serving as a board member of the DHA.

“In fact, the memo specifically distinguishes the DHA from more traditional homeowners associations, churches, and other community organizations based on the fact that the DHA takes upon itself a role that could be considered a quasi-governmental policy organization,” he states.

“What the [June 6] memo does provide is a legal opinion that participation by elected officials and board appointees in the DHA presents an issue that may affect, or may be perceived as affecting, the independent decision-making role of the city officials and therefore can have the damaging effect of undermining the process to the city’s detriment, financially, legally, and otherwise,” according to Hayes.

Seth Weissman, attorney for the DHA, said he could find no conflict of interest for DHA members to serve on city boards. (Photo Dyana Bagby)

At the DHA’s Aug. 14 meeting, its attorney, Seth Weissman, a real estate attorney and professor at Georgia Tech’s School of City and Regional Planning, said he found no conflict of interest for people to serve on the DHA and city boards. 

Weissman said he understood the mayor and council’s desire to not be sued, but the policy, or directive, that was implemented and then suspended due to heavy backlash from DHA members would do nothing to stop any lawsuits.

“I very strongly believe that if this policy is adopted or not adopted it would not affect in any way how much litigation” the city may face, Weissman said.

The city’s June 6 email:

The Aug. 19 memo from Gainesville law firm Hulsey, Oliver & Mahar:

Weissman’s Aug. 12 memo to the DHA: