Business counsel resigns, board votes to withdraw lawsuit

SEELEY LAKE – The Seeley Lake Sewer District held a special meeting June 22 to take action on issues stemming from their attorney resigning from his position as the Board’s business counsel. They also discussed and voted to withdraw a lawsuit initiated by the District and filed on June 12 against newly elected Directors Tom Morris and Jason Gilpin.

The meeting started out with a discussion on what was on the agenda and what was not. On the District’s website, information for the meeting listed several actions the Board may take, however, the agenda listed just two action items, a resolution to address legal counsel resignation and execution of contracts. Director Pat Goodover was concerned that the Board was considering three resolutions but there was only one listed on the agenda.

Vice President Beth Hutchinson felt that they could continue the meeting and if they hit something on which they felt they couldn’t take action they could schedule another special meeting.

On June 17, Hutchinson, Goodover and Director Walt Hill received a resignation letter from attorney Jon Beal stating that he would continue to represent the Board in two ongoing lawsuits but that he was resigning as the Board’s business counsel. Beal has made it a point that he is not able to contact Morris and Gilpin due to a conflict arising from Morris being a party in a lawsuit against the District.

In the resignation letter Beal states that Beal Law Firm PLLC is unable to continue to represent the District as its business counsel “given our legal and ethical compliance concerns and the Board’s refusal to address them.”

Attached to the resignation is correspondence Beal sent Hutchinson, Goodover and Hill on June 16. Beal explained that he can’t approve contracts with granting agencies because, with the election of Morris and Gilpin, the Board now has a majority of directors that have publicly opposed the project. It would be a conflict to accept the grants if the Board does not intend to move the project forward.

At the bottom of the correspondence is a list of six questions Beal asked for responses from the Board. In his resignation, Beal accused Hutchinson of failing to respond explaining that she is required to act in the absence of President Morris.

While the by-laws state that the vice president is to act in the absence of the president, it does not state that either is to act in the absence of the Board. The June 16 correspondence is time stamped less than 24 hours before Beal’s resignation giving no time for a Board response.

Hutchinson, Goodover and Hill voted to acknowledge Beal’s resignation while Morris and Gilpin recused themselves.

The Board then discussed hiring a new attorney to review the contracts and other documents that Beal refused to approve. Some of these contracts need to be signed in a timely manner if the Board wants to accept the grants that have been received.

District Manager Jean Curtiss said she found an attorney in Missoula who would be willing to review the contracts and is familiar with the grant programs in question.

The Board discussed holding another special meeting to give Curtiss time to find some options. Morris pointed out that all the contracts are things the Board has already agreed to, they just need an attorney to approve the signing of the contracts. It is not new business.

The Board voted to have Curtiss work with Morris and Hutchinson to hire an attorney to review only the pending contracts. Hiring an attorney for general Board business would be done at a later date.

The Pathfinder first learned of the lawsuit against Morris and Gilpin through information requested from the court that was received early on June 17. The lawsuit aimed to stop Morris and Gilpin from taking any steps that may interrupt the ongoing sewer project.

The Pathfinder put in a request to the Board’s secretary, Curtiss and Goodover asking for information on when the Board had voted on filing the lawsuit and how each Director voted on it. No answer was received so the question was asked again at the special meeting.

Former President Goodover stated that they held a closed meeting May 21. The meeting was ahead of the regular Board meeting and it was publicly noticed as such. Goodover asked Hill and Hutchinson what they thought of opening the minutes from the closed meeting in order to answer the question.

Hill felt that it should remain closed while Hutchinson argued that they could vote to open it and that she didn’t feel the votes could be taken inside a closed meeting. Hutchinson also said she felt that the decision to move forward with the lawsuit was still in the discussion process.

Goodover confirmed that there were motions and actions taken inside the closed meeting.

“But I do not disagree with you that we wanted final approval before [the lawsuit against Morris and Gilpin] was filed, and it was not given,” said Goodover.

Hutchinson explained that the only way the Board could undo it was to instruct Beal to withdraw it. Goodover, who’s signature is on the lawsuit, said that he had already asked Beal to withdraw it last week and was told that he didn’t need to seek Board approval at the special meeting to do so.

Goodover said Beal sent out a letter ahead of the meeting suggesting that the Board really does need a court to provide them some direction on how they proceed with the sewer. Goodover suggested that maybe they could just take Morris and Gilpin’s names off the lawsuit and still use it to get an opinion from the court on how to proceed.

Hutchinson disagreed saying that she didn’t think the Board should be turning to lawsuits but instead should work with a new business attorney and try and work together.

Discussion turned back toward if the item could be voted on, as it was not on the agenda.

The Pathfinder asked why the Board would have to vote to withdraw the lawsuit if the Board never authorized it in the first place. Goodover responded that he thought Beal recognized that he was not authorized to file it in his letter to the Board earlier in the day.

Hutchinson felt that the board needed to produce a statement at the meeting to withdraw the lawsuit so she moved to send a letter to Beal asking the lawsuit to be withdrawn.

Hutchinson, Goodover and Hill voted in favor of sending the letter. Morris and Gilpin recused themselves.

The full text and supporting documents of the lawsuit is available on the Pathfinder’s website: http://www.seeleylake.com/home/customer_files/article_documents/sewer_district_vs_morris_gilpin.pdf