Thursday, May 25, 2017
Stevens, Brown Need to Explain…If They Can
By ROGER M. GRACE
Los Angeles County Bar Association President Margaret Stevens has some explaining to do. So does her sidekick, outgoing General Counsel/CAO Clark Brown.
The questions they won’t answer, and which others in LACBA won’t answer, will not simply vanish.
Unless Stevens can point to some justification for what appears to be an obdurate refusal on her part to carry out a nondiscretionary duty, there looms the prospect of her being barred from serving on LACBA’s Board of Trustees in the next fiscal year. Unless Brown can explain away what appears to be his lying to a Los Angeles Superior Court judge, he could face the prospects of being found in contempt and incurring State Bar discipline.
While these potential penalties are drastic ones, so are the actions that were taken by Stevens, Treasurer Duncan Crabtree-Ireland, et al., in upsetting the results of an election of officers and trustees on pretextual bases: that there was lobbying of Nominating Committee members (which is forbidden by no rule) and disclosures to the press (printed after the committee made its decisions).
In connection with the efforts to undo an election, more than half of the members of the Board of Trustees were caused to be recused and, on the say-so of six members of the 28-person board (on a 6-5 vote), a new election was set in motion, with the prospect of additional candidates entering, and (unless the Superior Court intercedes) balloting will end the day before new terms are to begin on July 1.
Stevens has declined, through a spokesperson, to explain her rationale in failing on March 23, and continually since then, to cause a certification of the election results.
The bylaws say that nominations for officer and trustee positions are to be made by the Nominating Committee and if nobody gets into a contest with any of the committee’s choices by timely filing a petition with signatures of at least 100 LACBA members, the election is over. The president is obliged to tell the chief executive officer, on the day after the deadline (this year, March 22), to cast a ballot for the Nominating Committee’s nominees, “thus unanimously electing all candidates.”
Art. VII, §4 of the bylaws says the president “shall” do that—but Stevens, notwithstanding the lack of any nominating petitions, didn’t.
As a result of that refusal, a judge concluded on May 16 that the final step in the election process this year did not occur, so no election took place. The judge, James Chalfant of the L.A. Superior Court, was acting on a request for a temporary restraining sought by six plaintiffs who want a confirmation of the election results that they say should have been finalized on March 23, the day after the 5 p.m. deadline came and went, with no nominating petitions filed.
The plaintiffs, whose action seeks injunctive and declaratory relief, are now additionally asking, in a first amended complaint, for an order to Stevens to perform her prescribed duty. A hearing on a preliminary injunction is set for hearing June 13.
This newspaper asked for Stevens’ explanation of why she hadn’t adhered to the bylaw, and was told by a spokesperson:
“LACBA has been advised by counsel that we should not respond to questions that address legal issues or could compromise legal rights related to the ongoing lawsuit.”
It’s not that the powers-that-be, acting in the name of LACBA, are declining to say anything outside of what’s containing in papers filed with the court. To the contrary, a 1,117-word rationalization of the disputed actions appears on the organization’s website.
Aside from telling its side of the story there, the Stevens/Crabtree-Ireland faction has sent an email to members with its spin on why the election results were nullified on April 26 (by a rump board of trustees) and why LACBA is proceeding with a new election.
It puts forth much argumentation, but won’t address how Stevens was justified in failing to carry out her mandatory ministerial duty to cause one of the two acting co-CEOs to cast a ballot for the Nominating Committee slate.
No justification is put forth is, evidently, because there just isn’t any. “I don’t wanna,” which appears to be the basis for Stevens’ refusal, falls far short of an excuse.
And the reason she doesn’t want to do so seems to be that she regrets that opposition was not mounted to the Nominating Committee’s nominees (which did not include the candidate she favored for president-elect), and she wants another crack at putting up contenders.
LACBA is a nonprofit mutual benefit corporation. Under Corporations Code §7223, the Superior Court has power, upon application, to remove an officer or a director (or “trustee”) of such a corporation from office based on “dishonest acts or gross abuse of authority” (or two other bases that don’t apply).
An immediate reaction might well be: why bother to seek her ouster? Only slightly more than a month remains in her term as president.
The answer is that Stevens would, under the bylaws, remain on the board for an additional year as “immediate past president.”
An action to boot Stevens from the board could be brought, under §7223, by just one trustee.
It could also be instituted by a group of LACBA members—either 48 or 100, depending on how two statutes, taken in conjunction, are interpreted—but it is unlikely that no trustee would be willing to sue. Among the plaintiffs in the present action are two present officers—Senior Vice President Philip H. Lam and Vice President Tamila C. Jensen—who are trustees, and two non-officer trustees, William L. Winslow and Edwin C. Summers III. (The lead plaintiff is Susan J. Booth, a nominee for a trustee position, and former LACBA President Harry L. Hathaway.)
The more outrageous Stevens’ conduct becomes in connection with the election, the greater is the prospect of her ouster being sought.
And then there’s Brown. He’s LACBA’s peevish and nettlesome general counsel.
A memorandum of points and authorities in support of the amended complaint sets forth:
“During the May 16, 2017 hearing, Mr. Brown sought to justify the Rogue Board’s actions in invalidating the NomCom’s selection of candidates and recommencing the election process. Mr. Brown unequivocally stated that the Rogue Board amended the January 3, 2017 Bylaws….Mr. Brown’s statement is manifestly untrue.”
Non-recused trustees say they have no knowledge of a bylaw change; no notice was given of any such proposed action, as required by the bylaws; and it is not reflected on the LACBA website.
I queried LACBA as to whether Brown was correctly understood as representing “that the bylaws were amended in such a manner as to authorize the election timetable now being utilized”; if so, by whom the bylaws were amended (requesting a copy); and if “he did state that and it is incorrect, what is the explanation for it?”
If there was simply a slip of the tongue or some other explanation, I would think that would have been said.
But the statement from a spokesperson quoted above—that counsel advised no comment—applied both to my question as to Stevens’ noncompliance with a bylaw and Brown’s alleged misrepresentation.
An attorney is obliged by Business & Professions Code §6068(d) “[t]o employ, for the purpose of maintaining the causes confided to him or her those means only as are consistent with truth, and never to seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law.”
Rule 5-200(B) of the Rules of Professional Conduct instructs that an attorney “[s]hall not seek to mislead the judge, judicial officer, or jury by an artifice or false statement of fact or law.”
As the California Supreme Court observed in a 2004 case, “an intentionally false statement made by an attorney to a court clearly constitutes a contempt of court.”
Code of Civil Procedure §1209(a)(3) spells out that “violation of duty by an attorney” is a contempt.
The allegation that Brown made a false representation to Chalfant at the May 16 hearing raises the question of whether he intentionally lied to the judge.
If so, it is a matter not to be taken lightly.
It is clear that actions of Stevens, Brown, and Crabtree-Ireland (who is orchestrating the new election and is the only trustee not under a gag order forbidding comment on the matter) are not those of trustworthy individuals.
And nothing they might do as the events unfold to boost the interests they serve—which are not the interests of LACBA—should come as a surprise.
What has happened so far, with a concluded election being tossed out, or purportedly so, is nothing short of bizarre.
More shenanigans are to be expected.
INORDINATE PROCEDURE: Last night, assuming all went as expected, LACBA’s Board of Trustees hired Rick Cohen as interim chief executive officer.
Cohen, immediate past president and CEO of Buchalter, is not a controversial fellow. But there is something odd about the board voting on Wednesday night to employ him when he started work last Monday, and his selection was publicly announced on Friday.
LACBA’s spokesperson, Jason Ysais, explained in an email Tuesday night:
“The Board of Trustees will meet Rick Cohen tomorrow at its May 24, 2017 meeting, and President Stevens hopes that the Board will ratify the collective decision by senior management and the Officers to hire Rick.”
The supposed governing body of the organization was thus asked to ratify a decision which had already gone into effect (although, I understand, a contract had not yet been signed).
The spokesperson provided this background:
President Stevens and the Executive Committee discussed the need to retain a short-term CEO at the April 12, 2017 meeting. At the April 26, 2017 Board of Trustees meeting, she discussed this proposal from the Executive Committee, stating that she was postponing the search for a permanent CEO. She shared that based on discussions with the Officers and Executive Committee as well as its consultants, she was in the process of interviewing possible candidates with the intention of hiring an interim CEO within the following week or two. On May 10, 2017, the Executive Committee directed President Stevens to retain a short-term CEO as soon as possible. In executing the directive of the Executive Committee, President Stevens spoke with all proposed candidates given to her as well as others, contacted them and set up interviews with senior management. Rick Cohen interviewed with senior management and then each of the Officers, who unanimously agreed to offer Rick the position of CEO through 2018. LACBA is fortunate enough to have found a very qualified candidate whom everyone liked and agreed upon.
Well, “everybody” didn’t agree upon the selection in advance.
LACBA will not publicly reveal Cohen’s salary.
“We respectfully decline to provide his salary because divulging his personnel information would be against LACBA’s interests in the very near future when it attempts to search for and negotiate with candidates for a longer-term CEO. Pursuant to statutory reporting requirements, LACBA will disclose the 2017 compensation of its key management on the IRS Tax Form 990 in November 2018. If LACBA determines that it will not jeopardize its interests to disclose Rick Cohen’s salary prior to this date, it will do so.”
Whether the trustees will be told what Cohen will be paid is another question.
Sally Suchil is his predecessor. She was recommended by a search committee and was hired by action of the board, effective Dec. 1, 2009. Trustees were not let in on the secret of what she would be making, it has been learned.
It emerged later that she was paid $197,851 in 2010, and her salary burgeoned to $374,261 in 2013.
She resigned, effective Jan. 13, receiving $350,289 in severance pay—which was awarded to her in the absence of board action, and without its knowledge.
One of LACBA’s various needs is a bylaw amendment specifying that the Executive Committee—that is, the officers—may act in the stead of the full board only in an emergency situation.
Copyright 2017, Metropolitan News Company