On 2021-06-29, the public judicial Order announced that virtually none of the
accusations in the 1st Amended Complaint (and by
inference those of the 2nd Amended Complaint) should be granted as
valid. About 20 days later, the Plaintiff moved to change the composition of the
Plaintiff from Denney to the LCA. This move, like that of the 2nd Amended
Complaint, removes the financial burden from the few persons
responsible for the original lawsuit and places it on the LCA
membership through their contribution to the LCA treasury by their
annual dues. This action is formally known as REALIGNING THE PARTIES.
Unfortunately for the LCA members that do not wish to
be part of this lawsuit nor that their annual dues (assessments) be
used to pay lawyer fees, the motion ultimately passed (see below:
Docket 284, 2021-09-17).
The legal maneuver of realignment is a very technical device that requires for understanding a
grasp of "derivative lawsuit", "nominal plaintiff", "nominal defendant", and "collusion". When the motion to realign was
filed on 2021-07-20 with the current 2021/2022 BoD in control of the LCA and aligned with Plaintiff Denney
who had filed in the 1st Amended Complaint a derivative lawsuit against 2020/2021 BoD members and the
LCA as a nominal defendant,
the curious situation arose that the LCA was now seeking to sue itself. In the words of the Plaintiff's
motion:
"With the current Board committed to pursuing the claims against
Defendants, the continued prosecution of this
case by Plaintiff Denney is unnecessary. The derivative device is a creation of equity that exists to allow a
shareholder of a corporation to pursue claims where the board has wrongfully refused a demand to bring the
claim directly. But the derivative device no longer has application where, as here, the corporation- the LCA-
itself is actively pursuing those claims..."
(Plaintiff's Motion to Realign the Parties, 20-JUL-2021)
A situation in which realignment is not allowed occurs when there is no real adversarial relationship
between the plaintiff and the defendant. That is, realignment is disallowed when the parties are colluding, presumably in some
way that the lawsuit outcome will benefit both parties
D.L. Bassett & R.R. Perschbacher. 2014.Utah Law Review 2014(1):129
[Ref].
The Plaintiff argued there was no collusion; the Defendants asserted there was collusion due to Plaintiff
Denney being (at the time of the 1st Amended Complaint) a member of the 2020/2021 BoD. The Defendants further
argued that realignment was not in the best interests of the LCA membership as their dues would pay
the legal fees and, therefore, the 2021/2022 BoD would be conflicted in their duties by assuming the role of Plaintiff.
In the end, after many legal cases and precedents were cited,
the Plaintiff prevailed, but not without a clear sense among much of
the LCA membership that by pursuing this action without prior knowledge of the membership, the BoD had
acted in secrecy and bad faith.
