Pioneer pretrial motions continue

Published 12:00 am Saturday, April 10, 2004

The preliminary motions began in the suit filed against Pioneer Electric Cooperative in Circuit Judge Edward McFerrin’s courtroom Thursday morning.

The main order of business during the hearing was motions to dismiss the suit filed by lawyers representing Pioneer Electric Cooperative, its board of trustees and its manager, J. Malloy Chandler.

Three cooperative members filed the suit against its management and board of trustees in February in Butler County Circuit Court.

Wendell Phelps of Butler County, Hoffman Rhyne of Lowndes County and Kenneth Stallworth of Wilcox County are the plaintiffs in the case, claiming Pioneer’s management and trustees allegedly mismanaged funds.

Defendants include cooperative manager J. Malloy Chandler, trustees of the cooperative and the Acme Propane Gas Company’s board of directors including Hugh Strickland, Harold Powell, Thelma Mixon, Wood Till Jr., David Lyon Jr., Herbert Blackmon and Melvia Carter; Lynn Powell, an Acme officer and James H. Strickland, an officer of Pioneer Services.

Trustees Ted Tindal and Jimmy Gardner are not included in the suit.

Phil Butler, of Bradley, Arant, Rose and White, L.L.P., the law firm representing Pioneer’s board, filed his motion to dismiss and covered points relating to Alabama’s good business judgment rule.

Under that rule, it is assumed that everything the board did in its official capacity was a good business judgment based on the information they had at the time.

He said the board should not be held accountable for its decision to buy Acme Propane because of the circumstances the company is now in.

He said the board did not know there would be four rather warm winters and low sales. He said because they based the decision on information at the time, they were not &uot;wanton or reckless,&uot; in that decision. He said they were using their best business judgment at the time.

Attorney Doyle Fuller addressed Butler’s argument that despite its allegedly losing money that Pioneer board was &uot;wanton and reckless&uot; for continuing to throw good money after bad.

&uot;We allege that have wasted $50 million throwing it down the black hole they call a propane company,&uot; he said.

&uot;I think the court is going to be shocked by what it finds.&uot;

Another issue that Fuller argued on was that Cleveland Poole is the in house counsel for both Pioneer Electric Cooperative and Pioneer Rural Services and makes the legal decisions for both.

Butler countered that he wasn’t sure about that, and that in most lawyer/client relationships; the client makes the decisions based on the lawyer’s advice.

Now, both sides must provide written briefs to be presented to Judge McFerrin on Monday, April 19.

Both sides told the judge they would work amicably to set up a schedule for discovery.

If McFerrin moves forward and allows the case to go on, discovery is part of the pre-trial litigation process during which each party requests relevant information and documents from the other side in an attempt to &uot;discover&uot; pertinent facts. Generally discovery devices include depositions, interrogatories, requests for admissions, document production requests and requests for inspection.

The formal procedures used by parties to a lawsuit to obtain information before a trial is called discovery. Discovery helps a party find out the other side’s version of the facts, what witnesses know, and other evidence. Rules dictating the allowable methods of discovery have been set up by Congress (for federal courts) and by state legislatures (for state courts). Common discovery devices include:

Deposition, interrogations, request for admission, request for production of documents, request for inspection, subpoena and subpoena duces tecum.