Co-op board changes mind about lawsuit
Socorro Electric Cooperative’s board of trustees tried to undo what they did three months ago, but it may not stick.
At its regular meeting on Wednesday, Aug. 25, the board voted 5-2 to dismiss the co-op’s lawsuit against its member-owners. But co-op attorney Dennis Francish reminded the board before the vote that approving the motion wouldn’t mean the lawsuit would go away anytime soon.
“This dismissal will dismiss what can be dismissed. There are counter claims,” he said.
Most significantly, a counter claim filed the day before by a team of attorneys asking for class action certification for a countersuit targeting nine trustees, four former trustees and Polo Pineda Jr., who was terminated as general manager later in the meeting (see story, Page 1).
Named as representative of the class of member-owners is trustee Charlie Wagner, a leader in the movement to reform the co-op.
Paradoxically, Wagner and Prescilla Mauldin, who won election as a reform candidate last October, voted not to dismiss the lawsuit, which challenges the validity of three newly adopted bylaws they support.
Trustees Luis Aguilar, Leroy Anaya, Milton Ulibarri, Dave Wade and Donald Wolberg voted in favor of dismissal. President Paul Bustamante abstained. Trustees Jack Bruton and Leo Cordova were absent.
Immediately following that vote, the board approved a motion to utilize Albuquerque attorney Paul Kennedy in the case.
“He would assist in the lawsuit you voted to dismiss,” said Francish, who made the recommendation to involve Kennedy. “There are some pretty complex issues.”
Kennedy, a former New Mexico Supreme Court Justice, was hired by the co-op last year to serve on retainer. He said in an Aug. 26 phone interview that he would help the co-op however he could.
“There’s a bunch of litigation going on; I’m vaguely familiar with it,” he said. “I hope to get a handle on the litigation and maybe we can get it resolved as quickly and painlessly as possible.”
At its May meeting, the co-op’s board of trustees voted unanimously to seek a declaratory judgment and injunctive relief from three new bylaws overwhelmingly passed by member-owners at the annual meeting in April.
All three bylaws were aimed at increasing transparency of governance, which called for board meetings to be open to the public and the press, and allowing them access to any financial data that wouldn’t violate privacy laws.
In order to challenge the bylaws, the co-op filed suit against “all unnamed member-owners” of the co-op, which includes more than 10,000 individuals, businesses and public and private entities.
For the lawsuit to be dismissed, the parties who responded to the complaint would have to agree to acquiesce, or surrender their complaint. If they decline to do so, the matter could be brought before a judge.
So far, seven individuals and both Socorro-based newspapers have entered appearances or filed answers to the lawsuit.
Alvin Hickox of San Antonio, N.M., who was the first to file an answer to the lawsuit and who attended Wednesday’s meeting, said he wasn’t willing to surrender anything.
“Why would I do that?” he said after the board went into executive session. “My attorney, if he would ask me, I’d say no way.”
Hickox, who was wearing a T-shirt that read, “Socorro Electric Cooperative Member-Owner and My Vote Counts,” said there were two reasons he wanted to see the lawsuit reach a conclusion in court.
“I want an acknowledgement that we’re right, and I’d like to know how much money has gone their way,” he said, referring to allegations that members of the board of trustees had been excessively compensated over the years for what are non-paid positions.
Hickox noted that according to the co-op’s own records, 11 trustees collectively incurred expenses totaling close to $480,000 in 2009, or an average of more than $45,000 per trustee.
That total includes per diem, travel expenses, registrations, fees, insurance and health benefits.
The Socorro law firm of Deschamps and Kortemeier represents several individuals who have answered the lawsuit and is also part of a team of attorneys who brought the counterclaim.
Attorney Lee Deschamps said there would still be unanswered questions if the co-op’s lawsuit were dropped.
“The people who filed this lawsuit either filed it in good faith, in which case it should not be dropped if they were truly interested in representing the interests of the co-op members,” he said.
“If it was not brought in good faith, it shouldn’t be dropped so the court can take the appropriate disciplinary action for those responsible for filing a spurious lawsuit.”
Deschamps is one of the attorneys who filed the counter claim against the individual trustees, former trustees and Pineda. That one, he said, is not going away.
“In any manner, we do not intend to dismiss our counter claim,” he said.
Contact T.S. Last