CUNA News 10.31.06

Judge didn't rule 'no cause' for suspension, says group

VANCOUVER, Wash. (10/31/06)--The attorney for a dissident members group involved in a lawsuit against Columbia CU is taking issue with the credit union's interpretation of two issues related to the judge's ruling Thursday.

Doug Schafer, attorney for Save CCU, a dissident group that filed a lawsuit seeking injunctions against the credit union related to governance issues, contacted News Now after it ran a story in Monday's issue about Thurston County (Wash.) Superior Court Judge Paula Casey ruling.

Judge Casey denied both motions from Save CCU--one asking for mail ballots for an upcoming special meeting and one asking to revoke the recent suspension of three Columbia CU member/directors.

Save CCU had asked for mail ballots to be used for the Nov. 15 special meeting during which members will decide whether to expel members Cathryn Chudy and Kathryn Edgecomb and supervisory committee member Lloyd Marbet.

Casey denied the motion because the credit union's bylaws do not provide for mail ballots to be used at special meetings. The bylaws require that members attend a special meeting to vote on the issue.

Columbia CU said the special meeting bylaws requiring in-person voting were championed by SaveCCU members on the credit union's board after the credit union attempted to convert to a mutual savings bank.

According to Schafer, the bylaws championed by the Save CCU members in late 2005 required a mail-in ratification vote following any special membership meeting. However, on June 30, 2006, state regulator Linda Jekel directed CCU to remove that ratification vote provision as not consistent with state law, Schafer said.

He presented affidavits signed by the members indicating that to comply with Jekel's directive, they voted to rescind the ratification vote language.

News Now was told by the credit union that Judge Casey also ruled the board had cause to suspend Chudy, Edgecomb and Marbet during a special board meeting two weeks ago.

Schafer takes issue with this interpretation, saying that "Judge Casey did not rule that there was cause."

According to Schafer, "Save CCU argued that the facts already presented by both sides' affadavits/declarations demonstrated such a clear lack of cause as to warrant a preliminary injunction."

He told News Now that "Judge Casey ruled that parties seeking a preliminary injunction must present a stronger showing of unlawfulness than existed in the record before her--that she would need more evidence before ruling that there was not cause, or ruling that there was cause." He added, "She simply said, in essence, 'Not yet.'"