ALAMEDA -- An Alameda County Superior Court judge has dismissed the wrongful termination lawsuit that former Interim City Manager Ann Marie Gallant filed against the city, ruling that the City Council acted within its authority when it opted not to renew her contract.

The Feb. 14 ruling also awarded the city reimbursement for its legal costs to fight the lawsuit, which Gallant filed in August 2011 alleging she lost her job in retaliation for being a whistle-blower at City Hall.

"The city is completely vindicated in the actions we took," Mayor Marie Gilmore said. "Not only does this decision end a difficult chapter in the city's history, but it enables the city to recoup its legal costs incurred in defending this meritless lawsuit."

Gallant said the council's decision not to renew her contract violated the City Charter and caused her "humiliation, mental anguish and emotional and physical distress," according to documents filed in Alameda County Superior Court. She was seeking lost wages and damages.

Gallant was hired as interim city manager in February 2009 after Debra Kurita quit the job over what she described as differences with the council.

Gallant was placed on administrative leave in December 2010, and the council opted not to renew her two-year contract when it expired in March 2011, setting the stage for the hiring of John Russo as her permanent replacement.

Gallant maintained the council's move was in retaliation for her decision to have the Alameda County District Attorney's Office investigate Councilwoman Lena Tam on suspicion of having leaked confidential city e-mails to SunCal companies during talks on the redevelopment of Alameda Point.

Gallant also said Tam leaked information to local bloggers and to the Alameda firefighters union while it was in contract talks with the city.

Tam denied wrongdoing and prosecutors declined to file charges against her.

"Gallant's attack on my character cost me and the city money that could have been put to better use during tight budget times," Tam said in the wake of the Superior Court ruling. "I am gratified that the court ruled her allegations were false and without merit, and that she needs to reimburse the city."

Reach Peter Hegarty at 510-748-1654 or follow him on Twitter.com/Peter_Hegarty.