Attorneys clash at EMC hearing Tuesday

The first court hearing in a lawsuit filed last year by disgruntled members of the Grady Electric Membership Corporation resulted in what could be considered a draw Tuesday.
Although the plaintiffs were successful in keeping the suit in the courts with Senior Superior Court Judge Loring Gray not dismissing the case, the defendants, which includes the Grady EMC board of directors and current and former managers, were successful in convincing the judge to appoint a litigation review committee to investigate the merits of the plaintiff’s claims.
Judge Gray, after hearing from lawyers on both sides, ordered the counsel for the plaintiffs and the defendants to submit to him within 48 hours a list of potential candidates to serve on an independent litigation review committee.
“Next week I will appoint the committee and give them marching orders and some time parameters to follow,” Judge Gray said.
The judge said he plans to appoint a three-person panel to review the case.
During the hearing Tuesday, which lasted less than an hour, Hugh B. McNatt, an attorney representing Grady EMC, read a list of potential committee members they recommended as candidates to serve on the litigation review committee.
All of McNatt’s suggestions were other EMCs’ attorneys or managers, which was objected to by George T. Talley, attorney for the plaintiffs.
Talley said the committee, if one was ordered by the court, should include independent lawyers and not lawyers affiliated with other EMCs.
“We don’t need lawyers that go to meetings of co-ops every month. I know some of the people he is talking about and they are great people, but a large part of their practice is related to work they do for co-ops,” Talley said.
Included in McNatt’s list of recommendations were officials of both Mitchell EMC and Three Notch EMC as well as others. “They know how co-ops operate,” McNatt stated.
Plaintiffs’ attorney Ed Preston also took issue with the recommendations saying that it was a matter of accountability.
Preston urged Judge Gray to consider candidates who are “impartial” and do not have “industry ties.”
Preston and defendants’ attorney T. Joshua R. Archer argued case law concerning the appointment of a litigation review committee.
Archer stated that an independent review committee was the most efficient and fair way of settling the suit.
“This is a case where five disgruntled members of the Grady EMC brought this lawsuit. They’ve been at this over a year now. They have run advertisements in the newspaper. They’ve been trying to get up a crowd to go with them. They have a democratic process they can go through. They had no success getting up a crowd to replace the board. They’ve been unsuccessful so far so, apparently, they set up this lawsuit to get the court to take over the running of Grady EMC,” McNatt said in open court.
According to Archer, the defendants in the case failed to rally support of the EMC membership and noted that the members have the ability to call for special elections to remove board members and even rewrite the bylaws of the co-op and prohibit the board from amending them.
“This is an attack on how the EMC has been managed and on the democratic process called for in the bylaws, because a small group of members don’t like how the EMC is run,” Archer said.
Archer claimed the plaintiffs had no rights under law to be involved in the appointment of litigation review committee members, but he said the defendants had no objections to the plaintiffs submitted nominations.
“That way there is no question of objectivity of the committee. The committee will decide if this goes forward,” Archer said.
Plaintiffs’ attorney Ed Preston countered that the EMC had sought from the beginning to “stonewall” and delay court action. Preston said the only reason a hearing was held Tuesday was because the plaintiffs brought the matter to a head.
“If any of our questions had been answered, this suit may have been over. If we had been allowed discovery, it could be over today,” Preston said.
“We need facts. They say they have nothing to hide so why won’t they answer our questions? We think a whole lot more evidence will come out in discovery. The more we dig the more we will find. They are afraid of what we are going to find,” Preston said.
The plaintiffs’ attorney said the EMC has fought “tooth and nail to keep the plaintiffs from getting information” they sought and he contends they did so because “they have something to hide.”
He added, “If they don’t, show it and prove it.”
Grady EMC attorneys filed an emergency motion to stay discovery on May 28 in an attempt to keep information sought by the plaintiffs in the case confidential.
The plaintiffs are seeking information from both Grady EMC and United National Bank concerning Grady EMC’s purchase and subsequent sale of UNB stock to Thomas A. Rosser Sr. They want information from EMC regarding work performed by Grady EMC mechanics on personal vehicles belonging to Rosser Sr., the $3.8 million renovation of the EMC headquarters, the purchase of a large tract of land on GA Hwy. 112, and more.
Archer argued that case law cited by Preston did not apply and Preston argued there is no provision for a litigation review committee under the state’s EMC Act.
Judge Gray determined there is an “overlapping of statutes” and he suggested the review committee would “bleed over” from the not-for-profit provisions and the EMC Act.
“It’s in the best interest of this litigation to appoint a review committee,” Judge Gray stated.
Archer stated that by having a court appointed review committee it would make the process of selecting the committee members public.
The plaintiffs, who are Gordon Clyatt, Ronald Sellars, C. Seaborn Roddenbery, Jerome J. Ellis and Roy Brock, originally filed suit Oct. 7, 2014 against the EMC over the way it retains capital credits, then only disburses them to deceased members, and for business decisions made including using EMC funds to purchase stock in United National Bank and then selling the stock to Thomas A. Rosser Sr., while financing the purchase with a loan from the co-op, among other things.
Between July 23, 2014, and Aug. 27, 2014, the plaintiffs placed six advertisements in The Messenger raising their concerns with the operation and management of Grady EMC.
In addition to Rosser Sr., and the EMC, the defendants include EMC board of directors members Dewey Brock Jr., Caylor Outzs, Lamar Carlton, James Freeman, Lamar Strickland, Robert E. Lee, James Lewis, and current EMC General Manager Thomas A. (Bo) Rosser Jr.
Rosser Sr. is being represented in this matter by Greg Michell of Stanley, Esrey & Buckley of Atlanta. Other attorneys for the defendants include Hugh B. McNatt of Vidalia; T. Joshua, R. Archer, M. Anne Kaufold-Wiggins, and Matthew B. Ames of Balch & Bingham of Atlanta; M. Claire Chason of the Chason Law Firm in Cairo; V. Gail Lane of Altman & Lane in Thomasville; and Thomas Conger of Bainbridge.