In the Matter of a Mail Dispute ) January 16, 1998 Between ) ) LYLE Q. FOSTER ) ) and ) ) ELLEN DICK ) P.S. Docket No. MD 97-446 APPEARANCE FOR LYLE Q. FOSTER: Lisa Stegink, Esq. Neal, Gerber & Eisenberg 2 N. LaSalle Street Chicago, IL 60602-3882 APPEARANCE FOR ELLEN DICK: Ellen Dick 838 Fair Oaks Avenue Oak Park, IL 60302-1547
This mail dispute has been docketed pursuant to Postal Operations Manual (POM7, August 1, 1996) Section 616.21, which requires the Chief Field Counsel to forward certain unresolved mail disputes to the Judicial Officer for resolution. The mail in dispute, which is addressed to Illinois Association of Non-Profit Organizations (IANO) at 8 South Michigan Avenue, Suite 3000, Chicago, IL 60603-3320, and at 838 Fair Oaks Avenue, Oak Park, IL 60302-1547, is being held by the Chicago and Oak Park Postmasters. In addition, by Order dated December 26, 1997, mail addressed to IANO at 414 Plaza Drive, Suite 209, Westmont, IL 60559-1265, is now being held by the Westmont Postmaster.
Both parties submitted sworn statements, and other documents, in support of their claims, as required by 39 C.F.R. §965.5, and both submitted additional materials in reply, in accordance with 39 C.F.R. §965.6. The following findings of fact are based on all the materials submitted by both parties, including documents forwarded by the Postal Service Law Department, Chicago Office.
1. The Illinois Association of Non-Profit Organizations (IANO) was incorporated in Illinois by Ellen A. Dick on May 5, 1989. Its address was Suite 3000, 8 S. Michigan Avenue, Chicago, Illinois 60603. The Articles of Incorporation named three members of the Board of Directors: Ellen A. Dick, Salvatore V. Ferrera, and Randy Rollinson.
2. Among the stated purposes of the corporation are, "to assist in the development of charitable and educational activities," and to "provide research, technical assistance, referral services, networking opportunities, conferences and seminars, publications and a newsletter."
3. Pertinent provisions of IANO's By-Laws include the following:
"Article V Board of Directors
Section 1. GENERAL POWER. The affairs of the Corporation shall be managed by its Board of Directors.
Section 2. NUMBER, TENURE, AND QUALIFICATIONS. The number of directors of the Corporation shall be no less than ten (10) nor more than fifteen (15).(1)
* * *
Section 4. QUORUM. A majority of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board, . . ..
Section 5. MANNER OF ACTING. The act of a majority of the Directors present at a meeting which a quorum is present shall be the act of the Board of Directors, . . ..
Section 6. REMOVAL. Any Director may be removed by two-thirds (2/3) majority of the members of the Board present whenever in their judgment the best interest of the Corporation shall be served thereby.
Section 7. RESIGNATIONS. Any Director may resign at any time by giving written notice to the President or Secretary of the Corporation.
Section 8. VACANCIES. Any vacancies occurring in the Board of Directors shall be filled by election by the Board of Directors or by appointment.
Article VI Officers
Section 1. The officers of the Corporation shall be the Board Chairman, Vice President, Secretary and Treasurer."
Sections 3-6 of this Article list the duties of these four officers. Section 2 is titled "PRESIDENT," and lists the duties of that person. In essence, those duties are "To operate the day to day business of the Corporation," including hiring and dismissing staff, entering into contracts, planning and marketing programs; and "To act, with the Board Chairman, as official spokespersons of the Corporation."
4. Since the Corporation was formed, Ms. Dick has been the "President," performing the duties listed in Article VI, Section 2 of the By-Laws.
5. Other than the three directors listed in the Articles of Incorporation, the record is unclear as to when, or how many, other Directors were elected.
6. Prior to June 1997, Ms. Bridget Magan was Chairman of the Board of Directors, and Mr. Lyle Foster was Vice-Chairman.(2) By letter to Mr. Foster, dated June 10, 1997, Ms. Magan resigned from the Board. (Foster Ex. C-2). She attached resignation letters from seven other Board members, and her letter referred to the total Board Members at that time being fifteen. Another document filed by Disputant Foster indicates there were eighteen Board Members at about this time. (Foster "Timeline.")
7. By this time, a rift had begun among the members of the Board over various things, most particularly over the authority of Ms. Dick and certain actions she had taken, apparently without approval of the Board.
8. At a meeting of the Board on June 12, 1997, eight members, including Disputants Foster and Dick, were present. The Board accepted seven resignations.(3) The Minutes of this meeting state that Ms. Dick offered to resign as a voting member, and that her offer was accepted. In a letter dated July 17, 1997, Ms. Dick denied that she had agreed to this. (Foster Ex. C-4; Dick Ex. 33). The record contains no written resignation from Ms. Dick.
9. During the ensuing weeks, during which Mr. Foster acted as Chairman of the Board, various meetings were held, and correspondence exchanged, that demonstrate the growing acrimony between the parties, but which are not critical to a resolution of this mail dispute.
10. On October 5, 1997, Mr. Foster held a Board of Directors meeting, attended by himself, Mr. Rollinson, Mr. Spector and Mr. Felton. (Foster Ex. M-4). They voted unanimously to terminate the employment of Ms. Dick as "executive director" of IANO. On October 6, 1997, Mr. Foster sent Ms. Dick a letter informing her of the Board's action. (Foster Ex. C-5).
11. On October 10, 1997, Mr. Foster sent a notice to eight Board Members (8 names, in addition to himself but not including Ms. Dick, listed on notice), informing them that the Board would meet by telephone conference on October 13 to discuss, and vote on, the termination of Ms. Dick, and other matters. (Dick Ex. 61).(4)
12. This telephone conference was held on October 14, 1997, beginning at 8:34 p.m. (Foster Ex. M-5; Dick Ex. 63). The Minutes were signed by Judith Keel, who had been hired by Mr. Foster's group to handle administrative tasks for them. The Minutes state, "With four of seven board members present on the conference call when the meeting was called to order, it was determined that a quorum was present." The four were Messrs. Foster, Felton, Rollinson and Spector. The Minutes state that this group voted unanimously to terminate Ms. Dick's employment "as IANO Executive Director/President effective immediately," because of several unauthorized actions she had taken in the name of IANO. The group then voted to take certain actions regarding IANO banking matters, and to change the mailing address of IANO. The meeting concluded at 9:15 p.m.
13. The Minutes of the October 14 meeting also state that Mr. Shrove, another Director, joined the call at 9:10 p.m. Mr. Shrove was not present on the conference call when the vote to terminate Ms. Dick was taken. (Dick Ex. 65 - Shrove affidavit).
14. On October 19, 1997, Mr. Rollinson submitted change of address orders (PS Form 3575), directing that mail addressed to IANO at 8 South Michigan Avenue, Suite 3000, Chicago, IL 60603-3320, and at 838 Fair Oaks Avenue, Oak Park, IL 60302-1547 be forwarded to 414 Plaza Drive, Suite 209, Westmont, IL 60559-1265. (Dick Ex. 25; also part of original file). Ms. Dick protested these change orders, and this mail dispute was generated.
15. In November and December 1997, Ms. Dick continued to send memoranda to IANO members about programs and activities, and an annual meeting and convention was held on November 7, 1997. (Dick Exs. 74, 77-78). Mr. Foster's group did not participate in this meeting, although there is some indication that they were barred from it by Ms. Dick's supporters.
Contentions of the Parties
Mr. Foster's position is that the Board of Directors has authority under the By-Laws for managing the Corporation, that Ms. Dick was not an officer, but merely an employee of IANO, and that her employment was properly terminated by vote of the Board of Directors on October 5 and October 14, 1997. Once terminated, she has no authority to act for IANO, and Mr. Rollinson, acting at the Board's direction, properly submitted the change to IANO's mailing address.
Ms. Dick makes a multitude of arguments. Among them are that she was the founder of IANO and has run the day-to-day business of the Corporation since its inception, that IANO has always had its office at 8 South Michigan Avenue, and continues now to operate from that location, including publishing newsletters for members and presenting programs. She also argues that the action to terminate her employment was invalid because the group who did this never had a quorum to act, and never represented a majority of the Board of Directors. In addition, she claims that a valid election of new Board Members was conducted in early October 1997, that a new Board has been duly elected and that Messrs. Foster, Felton, Rollinson and Spector are no longer Board Members.
The large volume of documents submitted by the parties, and the many accusations that flow back and forth, make this case appear more complex than it is. The rule that dictates the outcome of this dispute is found in Section 614.1 of the Postal Operations Manual, which states that in the event of a dispute over mail addressed to a corporation, the mail "must be delivered according to the order of the organization's president or equivalent official."
There is no doubt that, at all times prior to October 1997, Ms. Dick was the "president or equivalent official." This is so not merely because of her title, but because she was clearly the chief executive of the Corporation, who managed the daily business and financial activities of IANO. In one sense, she was an "employee," and a "staff" person, as Mr. Foster argues, but she was also a member of the Board of Directors, and as stated in the By-Laws, an "official spokesperson of the Corporation."
It is also true, as Mr. Foster argues, that the Board of Directors has authority to remove Ms. Dick from her position as "President," and take away her authority to act on behalf of the Corporation. The record does not demonstrate, however, that the Board has lawfully done so. The By-Laws require that there be a minimum of ten Board Members, and it is clear that there was some number less than ten when Mr. Foster's group purported to act on October 5 and October 14, 1997. Even if some number less than ten could be valid, however, the four who met did not constitute a quorum, i.e., "a majority of the Board," because the record shows that the Board had at least eight members at that time. (Finding #11, fn. 3). The Minutes of the October 14 meeting refer to "four of seven" being a quorum (Finding #12), but Mr. Foster's notice of that meeting names nine members (Finding #11). Also, the "Timeline" submitted by Mr. Foster, at page 4, states that there were nine members, but argues that a quorum of five was present. This can be true only if Mr. Shrove is counted, but the Minutes, and Mr. Shrove's affidavit, make clear that he did not participate in the vote to fire Ms. Dick. (Findings #12 and 13).
Because I have concluded that Ms. Dick's position as "president or equivalent official" was never validly terminated, and because she has continued to conduct the business of IANO (Finding #15), she retains authority to direct delivery of mail addressed to the Corporation. This is so as to the mail addressed to the Westmont address, as well as to the other addresses. Even though some persons who send mail to Westmont may do so because they intend to support Mr. Foster's group, that is not at all clear. Presumably, anyone who addresses mail to IANO intends for it to go to whomever is carrying on IANO's business activities.
Ms. Dick's arguments regarding the election that was purportedly carried out under her direction in October 1997, and Mr. Foster's responses to those arguments, need not be addressed to resolve this mail dispute.
This decision deals only with delivery of the disputed mail. It does not validate any acts by Ms. Dick that may have exceeded her authority, nor does it determine what persons are, or are not, currently members of the Board of Directors of IANO, who is best suited to running IANO, or any other dispute that may exist between the parties. If either party obtains a court order that directs delivery of the mail, postal regulations provide that mail will be delivered in accordance with such an order. POM 616.3.
The attached delivery order should be issued.
Bruce R. Houston Chief Administrative Law Judge
2. Although the By-Laws use the term "Vice President," rather than Vice Chairman, these are deemed to be the same.
3. There are two versions of the Minutes of this meeting in the file, both unsigned. (Foster Ex. M-2; Dick Ex. 36). The copy filed by Ms. Dick names seven members who resigned, and also says that Mr. Foster was elected Chairman. The copy filed by Mr. Foster omits these items. There is no reference in either Minutes to the eighth resignation letter.
4. There is evidence that Ms. Sims, one of those listed, had already resigned. If that is so, the Board would have had eight members if Ms. Dick is not counted, nine if she is counted.