Attorney blames Wagner for fees
Attorney Darin Foster spoke early at the Dec. 19, Socorro Electric Cooperative meeting. Foster was previously with the law firm Kennedy Han in Albuquerque and part of the lawsuit naming the member/owners filed by the co-op.
Foster said he had been asked to give a presentation on the state of the litigation that’s been on going since about January of 2011.
Trustee Charles Wagner asked for a written version of his report and Foster said there would be no written version of the report.
Foster said in 2011 the goal of the board was to see if by-law changes that had been made by the membership were in accordance with New Mexico Law. Former corporate council Dennis Francish was looking for a declaratory action from a judge and the way he chose to do that was to name the members of the co-op as defendants.
This was not a suit against the membership, Foster said. The members were named to get the declaratory action.
“At no time did the co-op seek to get money from the members,” Foster said. “At no time did they say that the members had done anything that would have deliberately caused financial harm or would have required some sort of compensation back from the membership.”
The attorneys tried to dismiss everyone who wasn’t necessary to the suit, he said.
“We could get the judge to do it without having all those names there as defendants,” he said.
A small handful of individuals decided they did not want to be dismissed out of the suit, Foster said.
“If those individuals had allowed us to streamline the process, dismiss everyone, the total cost in legal bills would have been less than $5,000 dollars,” he said. “That would have also been a resolution in the spring of 2011.”
Foster said there were certain people who counter sued their own co-op and went on to say trustee Charles Wagner sued the co-op and thus violated his duty to the co-op. Foster said Wagner named himself as plaintiff and brought in counsel from Texas specializing in suing co-ops for large payoffs in the form of capital credits.
Foster said the judge said the membership had the right to make bad decisions.
“The judge didn’t say these were good bylaw changes,” Foster said. “He simply said if the membership chooses to make them they have that power.”
Foster said if the case had been allowed to end there, legal fees would have been about $15,000. He said Lorna Wiggins of the firm Wiggins, Williams and Wiggins spent the next two years trying to make sure those bylaws were kept to as closely as possible.
Foster said everything that’s happened since then is because Wagner continued to pursue a class action to seek capital credits and collections of “other activities” that were going on in 2010 and 2011.
In fall of 2011, Foster said he filed a series of motions that there is no evidence of fraud and Wagner is a plaintiff on a board of an entity he sued.
“That is completely and utterly inappropriate for him to be a plaintiff,” Foster said. “He can’t be there.”
Then he said, Wagner’s lawyers tried to substitute two other people into the lawsuit.
The judge allowed the substitution, Foster said, and the co-op board held a special meeting and capital credits were discussed.
Foster said the primary motivation issue was capital credits. A lot of people think capital credits are a pile of gold sitting there waiting to be picked up but they are not.
In October of this year, Foster said, the judge granted Foster’s motions from spring 2012; in there he said Wagner was not a proper or appropriate plaintiff in a punitive case against the cooperative. He said Wagner’s case was dismissed.
The vast majority of the co-op’s legal fees in the case were spent after the case should have been resolved.
“Everything paid in 2012 went entirely to Wagner’s inappropriate, wholly without jurisdiction, improper standing, couldn’t-follow-the-rules-of-civil-procedure, lawsuit,” Foster said.
He said the amount Wagner’s action cost the co-op since May 2011 was $22,788.82, which could not be paid by insurance because a member of the board was suing other members of the board.
Foster also said he has not charged the co-op for his past several trips to Socorro, nor for the current one because “I believe that the co-op has paid through the nose for something that should have been solved two years ago.”
Charlene West stood up in the audience to ask why Foster was giving his report at that particular time and was told she was out of order.
“You named me in that lawsuit,” West said. “It was a lawsuit.”
West was asked repeatedly to sit down by board president Luis Aguilar who finally threatened to call the police, the board then took a recess until the Socorro Police Department arrived and escorted West out of the meeting.
When the meeting came back to order, Foster closed by pointing out the presentation could not have taken place until all the litigation was over.