Appeals Court rules Preston severance package ruled null and void


By Stan Welch
On Tuesday night, November 18, 2008 the Anderson County Council, by a vote of 5-2, awarded then county administrator Joey Preston a severance package worth $1.2 million, despite the fact that his employment contract would run out six weeks later.
The severance package was also awarded against the advice of the employment attorney hired by the Council to advise them. Tom Bright told the council that Preston’s claim of anticipatory breach of contract had no standing. He also offered the Council three other options aside from paying Preston his groundless demands.
Finally, on May 31 of this year, after a grueling eight year legal battle, the South Carolina Court of Appeals ruled the severance contract null and void, and instructed the circuit judge who originally ruled in Preston’s favor to revisit the question of how to redirect Preston’s monthly retirement benefit of $8,000 into a constructive trust from whence it would be directed back to the county.
The ordeal began in  mid 2008 when three Republican members of the Council, including Larry Greer (D3), Bill McAbee (D4), and Michael Thompson (D5) all lost their primary elections. Eddie Moore, Tom Allen and Tommy Dunn won those three seats, respectively. They lost little time in making their intentions to rein in Preston’s free wheeling administrative style, as well as conducting a thorough review of the county’s finances.
Preston wasted little time in responding, hiring an attorney and making public his position that the incoming council’s intentions amounted to an  anticipatory breach of his contract, since they would interfere with his ability to do his job. That position conveniently ignored the question of whether he would still have a job by then or not, since his at will contract expired on December 31, 2008.
Preston’s attorney presented his demands which included $827,000 in compensation and salary, an additional $356,000 to purchase Preston’s time with the state retirement system so he could retire immediately, and $92,000 to secure his retirement health benefits. (Numbers rounded to even amounts by author.) Council responded by turning the issue over to the personnel committee, which  was chaired by District 6 councilman Ron Wilson.
Preston and Wilson would later be found to be deeply involved in Wilson’s silver bullion Ponzi scheme. Preston garnered over a million dollars for his part in the scheme, according to federal court records. Wilson then employed Bright who conducted a review of the situation and advised Council to simply let the contract expire.
Instead, on the night of November 18, 2008 the Council voted without notice, as required by the South Carolina Freedom of Information Act, to amend  the agenda of the regular council meeting. They then approved the severance agreement, and also approved unspecified transfers of funds between accounts to finance the agreement. Then, in a clever procedural move, they raised the issue for reconsideration, and once again approved it by a 5-2 vote, thereby sealing the deal.
Their next step was to offer the administrator’s job to Michael Cunningham, Preston’s long time assistant. Cunningham accepted and quickly became Anderson County’s first black administrator, to the glee of black council member Gracie Floyd, who miraculously produced an employment agreement already drawn up and ready for approval.
The incoming Council, in the meantime held a number of strategy meetings, and were ready to act soon after being sworn in. They took a series of actions to change the terms of Cunningham’s employment, and to undo the severance package. Thus began an eight year court battle that may not be over yet.
In the first round, circuit court judge Roger Couch ruled in Preston’s favor on every point, even supporting his counter claim that the county had surrendered its rights to pursue legal action against him. Despite mounting legal fees and public pressure to cut their losses, the council continued to appeal and to advance its case.
In the same time period, ancillary cases not directly related to the County’s legal actions were heard and also appealed. One case, brought by supporters of Preston and Floyd, and litigated by Candy Kern-Fuller, who still represents Preston in some  matters, argued that only Preston could authorize an investigation into his performance as county administrator. That argument received a stinging rebuke before the S.C. Supreme Court.
The latest ruling dealt with several other aspects of the previous rulings, but the crux of the matter was based on the circuit court’s ruling  that four of the Council members who voted that night had conflicts of interest. While Waldrep and Councilwoman Cindy Wilson were found to be disqualified due to their involvement in personal lawsuits with Preston, Thompson and McAbee were also disqualified due to other entanglements with Preston.
Crouch’s ruling had the effect of voiding a quorum at the November 18 meeting. Since the county ordinances only prohibit any conducting of business in the absence of a quorum and  does not provide a remedy if business is conducted anyway, the appellate court referred back to Roberts’ Rules of Order, which states that “In  the absence of a quorum,  any business conducted is null and void.” According to the appellate court, that includes the severance agreement.