INDIANAPOLIS (AP) — The Indiana Court of Appeals threw out the 2007 mayoral election in Terre Haute on Thursday, declaring the office vacant because winner Duke Bennett's former job running a federally funded mental health network made him ineligible to run.

The court ruled 2-1 in favor of former Mayor Kevin Burke, who claimed after the election that Bennett's candidacy had violated the Hatch Act prohibiting political activities by federal workers.

Bennett said he will seek a stay of the court's ruling and appeal the decision to the Indiana Supreme Court within 30 days.

"I won the election, I won the recount, I won the local (Superior Court) hearing," Bennett said. "Now the Court of Appeals says there should be another election. ... It's not the final step. It's another step in the process. We feel we're in a good position."

At the time he ran for mayor in 2007, Bennett was operations director of Hamilton Center Inc., a Terre Haute-based mental health system that received more than $4.8 million from the federal government for its Head Start program from 2000 to 2005. The appeals court said that work in connection with the federally funded program disqualified him from being a candidate.

"Because Burke has standing to contest the election and Bennett is ineligible, we conclude that a vacancy exists," the appeals court said in a 59-page opinion.

But Bennett said all the information he had at the time indicated "there was never an issue" with a possible violation of federal law.

He said if the question of eligibility had arisen before the election, he simply would have quit his job at the Hamilton Center.

Bennett, a Republican, won the election by 110 votes and took office last Jan. 1, two weeks after Vigo Superior Court Judge David Bolk ruled that he saw no evidence indicating that Bennett had "willfully flouted" the Hatch Act.

Burke, a Democrat, appealed the lower court ruling and sought to be declared the winner because of Bennett's ineligibility, but the appeals court ruled he cannot take over the office because voters weren't aware Bennett wasn't eligible.

"To act constitutionally we must either count all votes cast in good faith, including those cast for a disqualified candidate, or count none of the votes cast in good faith," the court ruled.

Judge Edward Najam dissented from the majority opinion, calling the ruling "incompatible" with common law.

He said a challenge after the election can't be based on the winning candidate's ineligibility "unless the voters knew of that ineligibility and wasted their votes accordingly."

Najam said because of that, Burke "failed to state a successful claim against Bennett and has no grounds to upset the election."

Bennett said he will remain mayor and conduct city business until the matter is settled. If his appeal fails and another election is ordered, he "would definitely be a candidate" because he no longer works for Hamilton Center, he said.