LPCA Board's Unlawful Action - $3,000 MORE in Legal Expenses

The following is the LPCA Renaissance's response to President Elyse Metune's motion to grant herself a $3000 legal fund - out of the LPCA treasury - before the Feb. 11th membership vote on the proposed reforms. This is in addition to the $2,190 of LPCA money that she and two other directors, Luree Stetson and Nikki Rueppel, mispent last month on legal fees to delay a membership meeting - without board approval or knowledge. The motion passed 6-3, with Terry Grimes, Craig Powell and Scott Rose voting against.

Illegal. Unethical. A breach of the fiduciary reponsibility of a non-profit board member - when will it stop?

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From: CkpinsactoTo: elyse_metune@sbcglobal.netCC: terry grimes <terryg@graphiccenter.net>, dennis kellogg <kellfam@macnexus.org>, scott rose <srose@rs-e.com>, lstetson2@earthlink.net, mcgillesq@comcast.net, furniturebydavid@sbcglobal.net

Sent: 1/27/2009 1:02:15 A.M.

Subj: LPCA Board Unlawful Action - $3,000 in Legal Expenses


Ms. Elyse Metune, President
Land Park Community Association

Re: LPCA Board's Unlawful Action Authorizing You to Spend $3,000 on Legal Expenses

Dear Ms. Metune:

Last night, the LPCA Board of Directors approved in a split vote a motion authorizing you to expend up to $3,000 of LPCA money on legal fees at your unfettered discretion.

This motion was passed on the heels of the board's rejection of an earlier motion, also in a split vote. The rejected motion, had it passed, would have removed you as LPCA President for misappropriation of LPCA funds unless you and the other directors involved in the specified misappropriation, directors Luree Stetson and Nikki Rueppel, signed agreements within five (5) days indemnifying the LPCA for the $2,190 in unauthorized legal fees that the three of you charged to the LPCA's credit with the law firm of Goldsberry, Freeman & Guzman, a firm the three of you engaged in the name of the LPCA to obtain help in your effort to delay or prevent a membership meeting at which director term limits would be considered by the membership.

Please be advised that the purported board action last night authorizing you to spend $3,000 more in LPCA funds on lawyers - in addition to the $2,190 of LPCA funds that you have already spent in legal fees - is unlawful and invalid on the following specific grounds: (1) the purported authorization was approved at a board meeting held in violation of the "member participation" mandate of the LPCA bylaws and established board policies; (2) the board action was the product of a fraudulent scheme to deprive LPCA members of their rights to express dissent to the action and to be informed of it in advance; and (3) the conduct of board members in approving such action constituted breaches of their fiduciary duties to the LPCA and its members.

Violation of "Member Participation" Mandate of LPCA Bylaws

LPCA Bylaw Subsection 5.3(b) provides: "Any member in good standing shall be entitled to attend any meeting of the Board to participate in discussion of matters before the Board..." Approved and established board policy requires that the LPCA send to the membership e-mail notice of all meetings of the LPCA board and including the proposed meeting agenda, not less than 48 hours prior to each board meeting.

In this case, last night's board meeting was "called" by you a full five (5) days before on January 21, 2009. Despite having five days to send the required e-mail notice and agenda to the membership, you delayed sending any notice to the membership concerning last night's board meeting until just three hours before the meeting, at which time you e-mailed to the membership a meeting notice and two board agendas, neither one of which including any reference whatsoever to any agenda item disclosing the motion to authorize the LCPA President to spend up to $3,000 more of LPCA money on legal fees, a sum equal to the total annual membership dues of all LPCA members of record as of January 1, 2009.

Clearly, you and your allies had a plan in place to adopt the $3,000 authorization motion long before you sent out the grossly misleading e-mail notice and agenda to the membership three hours before the meeting. I observed first hand that you were working off of a earlier prepared printed script in chairing last night's board meeting, which no doubt included the motion to authorize the $3,000 expenditure. You and your board allies were observed by several people emerging from a private meeting room just off the meeting hall just moments before last night's board meeting commenced, where you were likely putting the finishing touches on your deceptive scheme to sneak the authorization through the board with nary a peep of dissent from the LPCA membership - or even their awareness of it.

Had you honestly disclosed to the membership 48 hours in advance of last night's board meeting that you were planning to seek unfettered board authority to spend another $3,000 of LPCA money on legal fees, you and your board allies knew full well that the membership would have descended upon last night's meeting like locusts, particularly after the public revelations of last week of your misappropriation of $2,190 of LPCA funds to secretly hire a law firm at LPCA expense - without requisite board approval or even its awareness. You also were aware of the large number of LPCA members who had showed up at last Wednesday's so-called "LPCA community forum" anxious to question you and directors Luree Stetson and Nikki Rueppel about your unauthorized expenditures of LPCA funds, only to be completely deprived by you, as chair, of any opportunity to even speak, an action which led to over one-half of those attending the forum to promptly walk out of their own "forum" in disgust.

The "member participation" mandate of LPCA Bylaws Subsection 5.3(b) requires more than just allowing members to physically enter into the meeting room in which the board meeting is to be held, particularly for special board meetings that are scheduled at different times and dates than the LPCA's regularly scheduled monthly board meetings held on the 3rd Wednesday of every month. Compliance with Subsection 5.3(b) requires notice of special meetings and an agenda informing them of the substance of the meeting, particularly in the age of cost-free e-mails. Otherwise, the right of members to participate in special board meetings would be a nullity. How could a member conceivably participate in a special board meeting that he knows nothing about?

It was in recognition of this imperative of Subsection 5.3(b)'s "member participation" mandate that the board adopted a fixed policy some time ago requiring that the LPCA always send e-mail notice of board meetings, as well as the proposed board agenda, to the membership at least 48 hours before each board meeting. You failed to comply with both the "member participation" mandate of Subsection 5.3(b) and established board policy in failing to send an honest agenda and meeting notice to the membership 48 hours prior to last night's meeting. Consequently, any action taken in violation of the "member participation" mandate and board policy is unlawful and invalid. No court will permit a rogue board to get away with taking action at a meeting held in violation of its own bylaw's requirements that members be permitted to participate in all board meetings. Any such action is unlawful and invalid under the law.

$3,000 Authorization Was Procured in a Fraudulent Scheme to Deceive the LPCA Membership

A board action procured through fraud, artifice or a scheme to deceive or defraud is unlawful and invalid under California law. In this case, you and your board allies concocted a scheme to obtain board approval of a motion giving you the sole and absolute discretion to spend $3,000 of LPCA money while taking active steps to conceal, deceive and defraud the membership into inaction and keeping them in ignorance of your plans, thereby depriving them of their participation rights under the LPCA's Bylaw's "member participation" mandate and established board policy.

Your failure to provide 48 hours' prior e-mail notice and a copy of the agenda to the membership was no mere oversight. You and your allies concocted your plan well in advance of the moment you e-mailed the false agenda to the membership three hours before last night's meeting. You intentionally prepared and disseminated a false agenda to the membership to prevent members from finding out about your plan and to prevent them from descending on last night's meeting in protest, in much the same way as large numbers of LPCA members descended on Wednesday night's "forum" to question and confront you and directors Stetson and Rueppel on your misuse of LPCA funds last month.

Since the board authorization was procured in a fraudulent scheme to deceive the membership and deprive them of their rights to participate in last night's board meeting, the authorization was unlawful and invalid under California law.

Breaches of Fiduciary Duties by Scheme Participants

Every director owes a fiduciary duty to his or her corporation and its members, including a duty to be loyal to them and to treat them fairly. This duty also requires directors to act as fiduciaries or trustees with respect to the care and safekeeping of the assets of the corporation. By: (1) participating in this fraudulent scheme to deny LPCA members their rights to participate in last night's board meeting; (2) giving you - a person who has already clearly demonstrated her proclivity for misappropriating LPCA funds on lawyers hired for your own personal reasons - authority to spend $3,000 more of LPCA money; and (3) failing to take appropriate action to seek reimbursement and indemnity from you and directors Stetson and Rueppel for your prior acts of misappropriation, you and the directors who voted to approve this authorization have breached your fiduciary duties, rendering each of you liable for all damages resulting from those breaches, including personal liability for repaying all funds expended by the LPCA under this unlawful authorization.

As a result of your bylaw violations, your fraudulent procurement of board authorization and your breach of fiduciary duty, please be advised that every dollar you spend pursuant to the unlawful and invalid board authorization issued to you last night will be a dollar that we will recover from you and your board allies following your removal from power over this organization.

Misuse of LPCA Funds to Fight Proposed Reforms

One final caution: if you misuse this $3,000 in LPCA funds as a slush fund to pay for legal help to assist you and your board allies in your current efforts to defeat the LPCA governance reforms proposed by LPCA Renaissance, as you did in your misuse of LPCA funds last month, we will provide a full report of such illegal conduct to the California Attorney General and to local law enforcement authorities.

Very truly yours, Craig K. Powell

cc: LPCA Board of Directors