ST. HELENS, Ore. — After about a year of wrangling with members over a potential merger and the makeup of the credit union's board, St. Helens Community FCU is still battling a lawsuit that claims the CU rigged a 2012 director recall vote.
The lawsuit, which now resides in state court after being rejected in a federal court, followed a tumultuous 2012 in which an initial letter of intent from the credit union was executed to discuss the possibility of merging with another credit union; a potential merger some members objected to. The merger talks never progressed, and were terminated when a new CEO, Brooke Van Vleet, was named.
Van Vleet was hired after former CEO Jeff Schwarz was terminated by the board. Those two moves upset a group of members who had been calling for changes to the board, which led to a special meeting in September of 2012 to recall the majority of the seven-member board. The recall bid failed.
Lawsuits Filed, And Filed
Earlier this year members filed suit in federal court, claiming the incumbent board and management of St. Helens rigged the 2012 vote to recall the board. The court eventually dismissed the suit saying a federal court is not the proper venue to hear the case.
CU member Steven Knebel, who brought the suit, then in June filed a similar action in state court. "We're filing in state court to assure that these people are held accountable," Knebel told Credit Union Journal in a previous report.
In dismissing the federal suit, the U.S. District Court for the District of Oregon ruled that because Knebel alleged that the mail-in ballot for the board ouster violated NCUA's bylaws, only NCUA can move to enforce the bylaws - not a member.
NCUA then told the dissident CU members that it would not intervene in the dispute because it did not appear to affect the safety and soundness of the $160 million credit union.
In the state suit, Knebel asks the Columbia County Circuit Court to declare the credit union in violation of its own bylaws under Oregon's Uniform Declaratory Judgment Act.
He asks that the court declare that the "Credit Union's Bylaws serve as the contract between plaintiff Knebel and the defendant Credit Union." And that "By soliciting and counting mail-in ballots from members not present at the September 4, 2012 special meeting, the Credit Union has refused to comply with its own Bylaws, thereby breaching its contract with its members, including plaintiff Knebel."
He asks the court to declare the results of the recall vote void and to count only the votes of the 165 members who attended the special meeting.
Later this year Knebel asked the state court for a summary judgment, which the court denied. But as the case continues to move forward, St. Helens members have had their say. At this year's annual meeting, two new board members, Steven Correll and Seth Holmes, won seats.
Vice Chairman Tom Tussing was elected as the new chairman, replacing Lea Chitwood, who as defeated for reelection. Holmes is a long-time SHCU member and former credit union employee. Some 915 ballots were cast in the election.
