Lawsuit over Rehoboth city manager contract moving forward

A Chancery Court judge has ruled parts of a lawsuit filed against Rehoboth Beach related to the hiring of City Manager Taylour Tedder can proceed.

In a decision issued May 28, Vice Chancellor Bonnie W. David said claims that the city violated its charter can move forward, while claims the city violated the Freedom of Information Act cannot.

A little more than a year ago, the city announced Tedder’s hiring; he began working May 15, 2024. Among other things, his contract calls for a $250,000 annual salary, plus $50,000 in moving expenses and a $750,000 home loan that will be forgiven in full if he stays for seven years.

Exactly four months later, Aug. 15, attorney Theodore Kittila, on behalf of property owners Steven Linehan and Thomas Gaynor, filed the lawsuit against city commissioners in Chancery Court. The suit claims the city violated FOIA and that Tedder didn’t meet the qualifications for city manager spelled out in the city’s charter.

There was a hearing in March on whether the lawsuit should continue or be dismissed in full.

The judge took up claims against violations of the charter first.

“Because the city and its commissioners are bound by law to comply with the charter, the court must decide plaintiff’s challenge,” said David.

The city argued the plaintiffs’ challenge was filed too many days after finding out about the contract to be fair to the city and Tedder, because it “would impose a substantial hardship on the defendants, be a waste of city resources and be impossible to enact with fidelity.”

Finally, the judge didn’t dismiss claims against violating the charter because it’s ambiguous. The charter is susceptible of two reasonable interpretations, so a motion to dismiss must be denied, David said.

Moving to FOIA, the lawsuit argues the city violated rules related to FOIA when it held a number of executive sessions in late 2023 and early 2024 to discuss the hiring of Tedder. David dismissed those challenges because the lawsuit was filed more than 60 days after learning of the executive sessions.

A second FOIA issue was related to a July 8 meeting when the city ratified Tedder’s contract. The lawsuit argued the city violated FOIA when it instructed the public in attendance at the meeting that comments regarding the charter’s requirements or the qualification of Tedder would be deemed out of order.

However, the judge said the complaint alleges the opposite because it also includes wording that 18 people spoke out at the meeting on charter violations.

In response to the judge’s decision, Gaynor said, at the end of the day, this opinion was a solid rebuke to the city’s position that the main claim should be dismissed, and now they can proceed to legal discovery and depositions of commissioners. This is exactly where any plaintiff would want to be, he said.

While this ruling does not resolve all claims, Mayor Stan Mills said in a statement May 29 that the city is encouraged by the court’s agreement with the city on several key points.

“We remain confident and will continue to defend the hiring of City Manager Taylour Tedder,” said Mills. “Our focus remains on delivering high-quality public services and ensuring that City Manager Tedder can continue leading our team with the stability and direction that our community deserves.”

The judge’s ruling comes less than two weeks after commissioners conducted a three-hour-long executive session May 16 to administer Tedder’s one-year performance evaluation and determine if he deserved a merit pay increase. No decision on the increase was made at the conclusion of the executive session.

Commissioners are expected to resume discussions about Tedder’s performance evaluation and a merit increase at a special meeting Monday, June 9, said Lynne Coan, city spokesperson.

Editor’s note: A comment from plaintiff Tom Gaynor has been added regarding the judge’s decision.