United Tel. Credit Union, Inc. v. Roberts, Unpublished Decision (5-4-2006)
United Tel. Credit Union, Inc. v. Roberts, Unpublished Decision (5-4-2006)
Opinion of the Court
OPINION
{¶ 1} American Mutual Share Insurance Corporation ("ASI"), and Kenneth A. Roberts ("Roberts"), appeal from the August 10, 2005 judgment entry of the Franklin County Court of Common Pleas in favor of United Telephone Credit Union. Roberts is appealing in his role as the acting Deputy Superintendent of Credit Unions and ASI is the court-appointed conservator of United Telephone Credit Union.{¶ 2} Appellee, United Telephone Credit Union ("UTCU"), is a state-chartered credit union. Until 2003, UTCU was controlled by a board of directors consisting of Martin Hughes, his wife, Natalie Hughes, his cousin, Daniel Hughes, and neighbors, Shannon Gould and Mary Jane Gould.1 UTCU is regulated by the Ohio Department of Commerce, Division of Financial Institutions ("DFI"). F. Scott O'Donnell is superintendent of DFI. Roberts was the acting Deputy Superintendent for Credit Unions within the DFI.
{¶ 3} In 2001, a number of questionable occurrences and practices were discovered during a routine examination of UTCU conducted by DFI. As a result, on July 18, 2002, DFI entered into a supervisory agreement with the five members of the board of directors. Despite the agreement, the UTCU board failed to correct the questioned practices. Furthermore, DFI discovered incidents of self-dealing and misappropriation of UTCU funds by Martin and Natalie Hughes.2
{¶ 4} Based upon these revelations and the board's failure to perform under the Supervisory Agreement, DFI, acting through Roberts as Deputy Superintendent, executed an order appointing a conservator on February 24, 2003.3 The order made ASI the conservator of UTCU.
{¶ 5} On February 27, 2003, pursuant to the 30-day time period set forth in R.C.
{¶ 6} In September 2003, Martin Hughes was declared legally incompetent by the Cuyahoga County Probate Court. His son, Carl Hughes, was appointed as his guardian. As guardian, Carl Hughes consented to the removal of Martin Hughes from his position as a director of UTCU. Shortly thereafter, Daniel Hughes was also removed from the board. By early 2003, Shannon Gould and Kathryn Munteanu had resigned from their positions. On July 23, 2003, DFI issued an order signed by acting Deputy Superintendent Roberts, to remove Natalie Hughes from the board. Thus, by September 2003, there were no members on the board of directors of UTCU.
{¶ 7} Natalie Hughes appealed her removal as a director of UTCU on the grounds that Roberts lacked authority to sign the July 23, 2003 order. On December 22, 2004, the trial court reversed DFI's order and reinstated Hughes as a director. DFI appealed the trial court's decision on December 1, 2005 inHughes v. Ohio Dept. of Commerce, Division of Financial Inst., Franklin App. No. 04AP-1386, 2005-Ohio-6368. We held that the trial court lacked jurisdiction to hear Hughes' appeal of DFI's order. As a result, the July 23, 2003 DFI order removing Natalie Hughes as the last director of UTCU was upheld.
{¶ 8} On May 20, 2004, one year after UTCU voluntarily dismissed its complaint contesting the order of conservatorship and more than nine months after she was removed from the board of directors, Natalie Hughes authorized the original complaint to be re-filed.5
{¶ 9} UTCU filed a motion for partial summary judgment against Roberts, and a motion for summary judgment against ASI or alternatively to dismiss ASI from the action. Roberts filed a motion for summary judgment on the grounds that the trial court lacked subject matter jurisdiction because UTCU had failed to bring the action within the 30-day period provided by R.C.
{¶ 10} The trial court determined that the Ohio savings statute, R.C.
{¶ 11} Appellants allege ten assignments of error:
FIRST ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS JULY 26, 2005 DECISION WHEN IT FOUND THAT KENNETH A. ROBERTS, ACTING DEPUTY SUPERINTENDENT FOR CREDIT UNIONS ("ROBERTS"), DID NOT HAVE THE AUTHORITY TO SIGN AND ISSUE THE FEBRUARY 24, 2003 ORDER APPOINTING CONSERVATOR OVER UNITED TELEPHONE CREDIT UNION, INC. ("UTCU").
SECOND ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS JULY 26, 2005 DECISION WHEN IT FOUND THAT F. SCOTT O'DONNELL, SUPERINTENDENT OF FINANCIAL INSTITUTIONS, DID NOT PROPERLY AUTHORIZE ROBERTS TO ISSUE THE FEBRUARY 24, 2003 ORDER APPOINTING CONSERVATOR OVER UTCU.
THIRD ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS JULY 26, 2005 DECISION WHEN IT FOUND THAT O'DONNELL AND/OR THE STATE OF OHIO COULD NOT RATIFY THE ACTIONS OF ROBERTS IN SIGNING THE FEBRUARY 24, 2003 ORDER APPOINTING CONSERVATOR OVER UTCU.
FOURTH ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS JULY 26, 2005 DECISION WHEN IT FOUND THAT THE FEBRUARY 24, 2003 ORDER APPOINTING CONSERVATOR IS VOID. FIFTH ASSIGNMENT OF ERROR: THE TRIAL COURT ERRED IN ITS JULY 26, 2005 DECISION WHEN IT FOUND THAT PLAINTIFF'S COMPLAINT WAS AUTHORIZED BY UTCU.
SIXTH ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS JULY 26, 2005 DECISION WHEN IT FOUND THAT A SINGLE DIRECTOR OF UTCU COULD AUTHORIZE THE FILING OF AN ACTION UNDER R.C.
SEVENTH ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS JULY 26, 2005 DECISION WHEN IT FOUND THAT PLAINTIFF FILED ITS COMPLAINT WITHIN THE TIME PERIOD ALLOWED BY OHIO REVISED CODE ("R.C.") 1733.361.
EIGHTH ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS JULY 5, 2005 DECISION AND ENTRY THAT OHIO'S SAVINGS STATUTE, R.C.
NINTH ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN ITS AUGUST 1, 2005 DECISION AND ENTRY DENYING DEFENDANT'S MOTION TO DISQUALIFY COUNSEL.
TENTH ASSIGNMENT OF ERROR:
THE TRIAL COURT ERRED IN DENYING DEFENDANT ROBERTS' CROSS-MOTION FOR SUMMARY JUDGMENT.
{¶ 12} Appellate review of motions for summary judgment is de novo. Doe v. Shaffer (2000),
{¶ 13} Appellants' fifth and sixth assignments of error are interrelated. We will address them together. In their fifth assignment of error, appellants allege that Natalie Hughes was not authorized by the board of UTCU to refile the complaint. InHughes, supra, we held that because Hughes failed to comply with the requirements of R.C.
{¶ 14} Even if Natalie Hughes had been a lawful director of UTCU at the time of the re-filing of the complaint under R.C.
{¶ 15} R.C.
Except as otherwise provided by law, the articles, or regulations, the corporate powers of a credit union shall be exercised, its business conducted, and its property controlled by a board of directors, provided that the number of directors fixed by the articles or regulations shall not be less than five.
Thus, under R.C.
{¶ 16} UTCU contends that the general provisions in R.C.
{¶ 17} We decline to accept appellee's broad interpretation of who may sue on behalf of a credit union. The plain language of the statutes mandate that an action brought on behalf of a credit union may be initiated only by a board of directors made up of no fewer than five members. R.C.
{¶ 18} Appellants' sixth assignment of error asserts that the trial court erred in holding that a single director could authorize the filing of an action on behalf of the credit union. As pertinent to this question, R.C.
{¶ 19} The provisions of the Ohio Revised Code are clear. An action to remove a conservator pursuant to R.C.
{¶ 20} Appellants' tenth assignment of error alleges the trial court erred in denying Roberts' cross-motion for summary judgment. Pursuant to our determination that the trial court lacked subject matter jurisdiction to hear this action, we find appellants' tenth assignment of error moot.
{¶ 21} For the foregoing reasons, we sustain the fifth and sixth assignments of error. All remaining assignments of error are moot and this matter is remanded to the trial court with instructions to dismiss the complaint.
Judgment reversed and remanded with instructions.
Sadler and French, JJ., concur.
Reference
- Full Case Name
- United Telephone Credit Union, Inc. v. Kenneth A. Roberts, in His Official Capacity as Acting Deputy Superintendent for Credit Union, Ohio Department of Commerce, Division of Financial Institutions, United Telephone Credit Union, Inc. v. Kenneth A. Roberts, (American Mutual Share Insurance Corp., Intervenor-Appellant).
- Cited By
- 2 cases
- Status
- Unpublished