Attorneys for the Stillwater Area School District and community group 834 Voice met in court Aug. 30 for a hearing before a judge determines if the case will go to trial.
Fritz Knaak, attorney for 834 Voice defended his case against a motion for summary judgment made by school district attorneys Peter Mikhail and Elizabeth Brodeen-Kuo. A motion for summary judgment asks the court to determine if the case cannot go forward to a jury trial due to a lack of an adequate case or if a jury could only find in favor of the party making the motion when applying the law.
In his motion, Mikhail asked the judge to determine that the case cannot go to trial because the plaintiffs — 834 Voice on behalf of its members and three individuals — do not have a legal standing to sue the district.
Mikhail alleged that 834 Voice was not a bona-fide corporation as it had presented itself in its original court documents.
“Agents of the Department of the Treasury don’t study all of the deviations of the $100 bill that forgers could make; they study the real thing so well that they can spot any deviation,” Mikhail said. ” A nonprofit corporation suing in court on behalf of injuries to its members is a real thing, we know what a real thing looks like. That is what 834 Voice alleged that it was.”
Citing the discovery documents in the case, Mikhail argued that 834 Voice was not following the requirements of a nonprofit as outlined in state law, and therefore could not sue on behalf of alleged members.
“The testimony and the record that we have supplied to the court proved without any doubt that 834 Voice was never formed as a corporation, never operated as a corporation and … never had members,” Mikhail said.
Mikhail argued that a member is more than a supporter.
“Here in the court, the term member under [Minnesota statute] 317A is a very specific thing,” Mikhail said. “It is a position that comes with rights, duties and obligations.”
Judge Daniel O’Fallon asked questions of Knaak in response to the points made in Mihkail’s court brief.
“We are saying that under the provisions of the nonprofit incorporation act there is a great deal of leeway to groups like this,” Knaak argued. “Even if the court were to find that corporation does not exist, the fact that these individuals have come together and are making these claims together is sufficient under the case law we cite.”
“They are moving for summary judgment,” O’Fallon said. “If I were to grant their motion, presumably the next thing they are going to be motioning for is costs for the litigation. Who is going to pay those?”
“I would say it would be the individuals involved and the association,” Knaak said.
“What the school district is entitled to, is to know who the members are, because anyone who is named a member will be legally responsible for any costs awarded, if the school district were to prevail,” O’Fallon said.
O’Fallon also stated that the law requires a person to have some kind of injury in fact in order to have standing to bring forward a case.
“If I’m going to determine what the injury in fact is, don’t I have to know at some point who those people are and what their alleged injury is?” O’Fallon asked. “How have your members been injured in fact?”
Knaak argued that the residents of the school district have been injured by paying too much for disputed contracts related to conflict of interest allegations brought forward in the case.
“This is not a taxpayer lawsuit,” O’Fallon said. “Let’s talk about the lawsuit you brought, not the lawsuit you could have brought.”
O’Fallon asked additional questions of Knaak about his client’s standing and the suggested remedies to the claims brought forward in the case.
The rules of the court state that a judge has 90 days to submit a ruling on a motion for summary judgment. O’Fallon determined that the scheduled trial date for the case — Oct. 30 — was 60 days away and needed to be rescheduled.
If O’Fallon rules in favor of the motion, the case will be over. If the case does move to trial, the court has set the new trial date for 9 a.m. Feb. 26, 2018, in Washington County.
Knaak informed the court that the services of a mediator are being sought.
Contact Alicia Lebens at [email protected]