SAN FRANCISCO – A federal appellate court last week denied a request for reinstatement by a former member of the supervisory committee for San Francisco Police CU who claims he was illegally ousted from the panel for properly performing his oversight duties.
In upholding the lower court ruling, the U.S. Court of Appeals for the Ninth Circuit, said that the appeal by John Mindermann was rendered moot because Mindermann’s term on the committee expired in 2008.
Mindermann had prepared and distributed to the committee and to the Board of directors members a memo on Sept. 21, 2004 questioning some of credit union’s business practices and suggested that the Board undertake a comprehensive assessment of business operations. In January of 2005, he consulted with an outside expert to request an evaluation of the financial performance of the credit union. He then drafted a summary of the expert's findings and opinions, which recommended a review of S. F. Police CU’s investments and operations by an outside management consultant and submitted the report to the Board on January 18, 2005.
The Board responded negatively to the report and confiscated all copies of it, but Mindermann continued to press his concerns.
In March of 2005, the Board approved a motion that Mindermann had violated his fiduciary duty and obligation to maintain the confidentiality of credit union’s records, and made a `slanderous attack' on members of the SFPCU's management that was contrary to the best interests of the credit union.
In January of 2006, the Board adopted a confidentiality policy that prohibited disclosure by Committee members of financial or business information of the credit union but Mindermann declined to sign a copy, claiming it was too broad and would undermine discussion of financial policies with credit union members.
In October of 2006, Mindermann announced plans to seek election to the Board at the next annual meeting in February of 2007.
On November 21, 2006, the Board called a special meeting of the members for December 7, 2006, to vote to remove Mindermann the supervisory committee. They charged that he disclosed confidential information to an outside consultant; was the sole volunteer committee member who refused to sign the confidentiality policy; and he acted outside the structure of the committee and without approval to disrupt the business of the credit union. And Minderman was voted off the committee at the meeting.
In a suit filed in October 2008, Mindermann claimed wrongful removal, breach of membership contract, breach of the covenant of good faith and fair dealing, and violation of the right of fair procedure. He alleged the credit union acted in retaliation for his efforts to scrutinize its financial policies.
“The relief that plaintiff seeks with his declaratory and injunctive relief actions is an order that sets aside his removal from the Committee as a null and void action by the SFPCU,” said the appellate court. “ Even if we were to find the SFPCU's action invalid and set aside the removal of plaintiff from the Committee, the expiration of his term would make any declaratory relief ineffectual.
“Plaintiff cannot be reinstated to a position that has terminated for reasons other than his removal by the Board. Even if we were to reverse the judgment, remand the case for further proceedings, and the trial court was to ultimately find that plaintiff's removal was improper, he could not resume the position as a Committee member,” the court ruled.
