ROUND ONE TO B-CU

Filed under FLORIDA, FRONT PAGE, NEWS

Former Internal Revenue Service Special Agent Robert Delancy’s lawsuit against Bethune-Cookman University was dismissed, but it’s just the beginning of the continuing legal battle between the school’s leadership and alumni.

BY THE FLORIDA COURIER STAFF

DAYTONA BEACH – A Volusia County (Daytona Beach) state circuit court judge dismissed a lawsuit accusing Bethune-Cookman University (B-CU) and its board of trustees of violating its own rules by refusing to seat Robert Delancy, the elected representative of B-CU National Alumni Association (NAA), as a trustee, allegedly in retaliation for Delancy’s aggressive questions about the school’s finances.

Bethune-Cookman University alumnus Robert Delancy and his attorney, Nathaniel E. Green, Jr., leave the Volusia County Courthouse Annex in Daytona Beach after a hearing on May 26.
(CHARLES W. CHERRY II / FLORIDA COURIER)

In a somewhat contradictory order dated June 14, Circuit Judge Christopher France said that Delancy did not have standing to bring a lawsuit, and therefore it wasn’t necessary to further review the facts of the case at that time.

Delancy’s lawsuit says he attempted to take his seat on the B-CU board in October 2016 after being properly elected as the alumni trustee representative.

The lawsuit alleges that the board refused to seat him – the first time that has happened in the institution’s history – without notice or explanation.

‘Standing’ necessary
“As a threshold matter, the Court cannot reach the issue of whether Plaintiff’s Complaint properly states a cause of action unless it is first established that Plaintiff has standing to bring the instant suit…” France wrote in his nine-page order.

“In the present case, Plaintiff lacks standing to bring an action alleging that Defendant has, and will engage in acts, which are ultra vires, (beyond one’s legal power or authority) because Plaintiff is not a member of the Defendant corporation,” the judge ruled, citing Florida law.

Just a recommendation
France also ruled that the NAA’s and B-CU’s bylaws both indicate that the university’s current trustees are not required to seat the NAA’s recommended trustees, and that a B-CU committee of trustees “has sole authority to nominate new potential Trustees for membership on the B-CU Board of Trustees.”

Essentially, the judge decided that Delancy cannot properly bring a lawsuit against B-CU because he is not a trustee. However, France’s order indicated there was still a possibility for the lawsuit to continue, and gave Delancy 30 days to correct and refile it.

“To the extent there was an agreement between NAA and B-CU as Plaintiff alleges, then NAA, not Plaintiff, would be the appropriate party to bring an action for breach of that alleged agreement or breach of each respective party’s bylaws. Furthermore, since the NAA is not before the court in this action, its interests are not protected by this process and cannot be adjudicated.”

Ruled anyway
A few pages later, France seems to contradict himself by actually ruling on the lawsuit.

“In conclusion, after taking all of Plaintiff’s allegations as true, limiting itself to the four corners of the Complaint and attached exhibits thereto, the Court has determined that Plaintiff lacks standing, has failed to state a cause of action upon which relief can be granted and that the adjudication of the claim is not warranted based on the above findings.”

Even as the judge was considering his ruling, the Florida Courier learned that the NAA’s board of directors decided to join Delancy’s lawsuit over the objection of current NAA president Jennifer Adams. The NAA will also be represented by Delancy’s current Fort Lauderdale-based attorney, Nathaniel E. Green, Jr., and is expected to file a request to join the lawsuit shortly.

The topic of Delancy’s lawsuit is expected to be the subject of animated discussion at the NAA’s annual national conference, which takes place in Miami this weekend – after the Florida Courier’s press time late Wednesday night.

Brinson up next
France is also presiding over a second lawsuit filed by a B-CU alumnus, former trustee A. Ray Brinson.

Brinson claims he was terminated from the board in October 2016 without notice or warning, and in violation of B-CU’s bylaws that provide a formal process for removal of trustees. His lawsuit was filed by Jacksonville-based attorney Willie J. Walker.

Brinson, a Jacksonville resident, is a former Prudential and Aetna Insurance executive who retired in 2002 after 33 years in the industry. He is a B-CU alumnus who has combined service of more than 15 years as a trustee. He also served as president of the NAA for four years.

Both he and Delancy, a retired Internal Revenue Service special agent, accuse the university of retaliating against them for asking questions.

Decades of collaboration
Like Delancy, Brinson alleges that the longstanding agreement between the school and the NAA is “independently reflected within the by-laws of both organizations.”

“For as long as this agreement has been in existence, it has been the understanding, custom, pattern, and practice, that the NAA’s Alumni Trustee Representative, elected in accordance with the NAA’s bylaws, would be accepted, and not subject to veto by the BOT,” Brinson’s complaint alleges.

“During or around 2015, Plaintiff…expressed worries about the B-CU’s level of debt and lack of transparency regarding the B-CU’s plans to enter into a $72,000,000.00 capital lease over forty (40) years to finance a 1,200-bed student housing project. As such, Plaintiff raised these questions in written correspondences directly to the BOT, its Chairperson, and B-CU’s administrators concerning the housing project,” the lawsuit alleges.

“B-CU’s refusal to accept Plaintiff as a duly elected Alumni Trustee Representative is a direct result from Plaintiff’s questioning B-CU’s lack of transparency, quality of financial leadership and the institution’s long term financial health. Such rejection is both retaliatory and punitive as a direct result of Plaintiff having raised the aforementioned concerns.”

The lawsuit states that for months, Brinson tried to “resolve the matter informally” with B-CU before finally hiring Walker.

‘Last thing’
Walker said that filing a lawsuit is “the last thing” Brinson wanted to do.

“It’s not about money. It’s about the orderly conduct of corporate business,” Walker explained.

“Any removal has to be done in according with relevant documents. Articles of incorporation and bylaws mean something.”

Citing what he called “a whimsical application of the bylaws,” Walker said he’s looking forward to presenting his case in court.

“We need a judicial resolution. It’s vital to Bethune-Cookman’s corporate operations. They must understand that rules must be followed.”

Neither asking for money
Both lawsuits request that France stop the B-CU board from moving forward until they are seated as trustees. Neither man is requesting that B-CU pay them any money damages.

Brinson sued the university and all its current board members individually. Delancy sued only the university. Both complaints also ask for a determination of Brinson’s and Delancy’s rights as trustees.

Delancy dropped his request that B-CU pays court costs and attorney’s fees, something Brinson is still requesting.

Moving aggressively
Brinson’s lawsuit was filed after Delancy’s, and was originally assigned to Judge Michael S. Orfinger, who recused himself from the case without giving a reason. It was subsequently transferred by Chief Judge Terence R. Perkins to France, who will now decide both cases.

A review of the activity in Brinson’s case indicates that some of the trustees have yet to be served with an official copy of the lawsuit.

However, Walker, Brinson’s attorney, is moving aggressively using a process called “discovery” which can force the university to produce documents, answer lists of written questions, and ask questions of all the trustees under penalty of perjury.

Dismissal requested
Brian Rubenstein, B-CU’s Tampa-based attorney, is attempting to slow the discovery process down. He had asked the judge not to allow any discovery activity until the court has ruled on a motion to dismiss Brinson’s case.

Rubenstein alleges that Brinson’s term as a trustee expired and was not renewed, so he was not thrown off the board. He claims that B-CU’s trustees were well within their rights not to extend Brinson’s term.

Rubenstein’s motion to dismiss also claims that Brinson can’t legally sue individual trustees nor the board of trustees itself.

List of defendants
Among the trustees sued include Dr. Lucille O’Neal, a B-CU alumna who is the mother of NBA superstar and Basketball Hall of Famer Shaquille O’Neal; retired Circuit Judge Belvin Perry, Jr. of Orlando; and Dr. Kent Sharples, the former president of Daytona State College.

Bishop Sue Haupert-Johnson, the episcopal leader of the North Georgia Conference of the United Methodist Church; and Dr. Nelson Adams III, a prominent Miami physician who once served as the national president of the National Medical Association – the organization representing almost 30,000 Black physicians – were also served.

A date for the hearing on the motion to dismiss has been set for July 26.

Asking hard questions
As previously reported in the Florida Courier, Delancy has been sounding the alarm about B-CU’s finances to other alumni for more than two years.

“If you have a business entity that is dominated by one person, when the accounting department is compromised, when internal controls are weak, when important transactions occur between the company and its officers, and when the management board is not active and involved, the danger of management fraud is greatly increased. These are the situations that are conducive to fraud and should make an independent auditor particularly alert,” he wrote in an email to alumni on May 13, 2015.

“Again I make it very clear, I am not suggesting that management fraud exists at Bethune-Cookman University. However, enough information has been uncovered and enough questions surfaced that an independent forensic accounting of the schools (sic) finances is warranted.”

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