September 27, 2023
The following document is what was filed in Circuit Court, which you can view by FOLLOWING THIS LINK to our article yesterday.
STATE OF MICHIGAN
IN THE CALHOUN COUNTY CIRCUIT COURT
161 Michigan Ave, Battle Creek, MI 49014 – (269) 969-6518
EDWARD HAAS, Case No. 23- -CZ
Plaintiff, Hon.
v
CITY COUNCIL OF THE CITY OF
ALBION and THE ECONOMIC
DEVELOPMENT CORPORATION
OF THE CITY OF ALBION,
Defendants.
KUIPER KRAEMER, P.C.
Scott W. Kraemer (P69822)
C. Christopher Newberg (P79025)
Holly A. Jackson (P71684)
Attorneys for Plaintiff
180 Monroe Ave NW, Suite 400
Grand Rapids MI, 49503
(616) 454-3700
kraemer@k2legal.com
newberg@k2legal.com
jackson@k2legal.com
There is no other pending unresolved civil action arising out of
the transaction or occurrence alleged in this Complaint.
VERIFIED COMPLAINT
NOW COMES Plaintiff, Edward Haas, by and through his attorneys, Kuiper Kraemer PC, and hereby submits Plaintiff’s Verified Complaint against Defendants.
INTRODUCTION
- On August 10, 2023, Plaintiff and other members of the The Economic Development Corporation for the City of Albion (“EDC”) voted to remove its then-president and CEO, Virgie Ammermann. In an almost immediate act of retaliation, the Albion City Council convened on August 15, 2023 to remove Plaintiff and three other EDC board members who voted to terminate Ms. Ammermann from their respective positions on the EDC’s Board of Directors. However, the Albion City Council’s removal of Plaintiff and the other three EDC board members was done without cause and in conflict with the applicable laws and governing documents. Because the Albion City Council’s action on August 15, 2023 was retaliatory, illegal, and outside of its authority, Plaintiff seeks an order invalidating the decision and providing other relief as requested herein.
GENERAL ALLEGATIONS
- Plaintiff, Edward Haas, is an individual who resides in Calhoun County, Michigan.
- Defendant, the City Council of the City of Albion “(City Council”), is a municipal entity located within Calhoun County, Michigan.
- Defendant, The Economic Development Corporation for the City of Albion, is a Michigan corporation formed pursuant to Michigan’s Economic Development Corporations Act that operates withing Calhoun County, Michigan.
- At all relevant times, the subject matter of this Complaint took place within the jurisdiction of this Court.
- The amount in controversy is greater than $25,000.00 or otherwise within the jurisdiction of the Court.
GENERAL ALLEGATIONS
- Prior to August 15, 2023, Plaintiff served as a duly appointed member of the Board of Directors for the EDC.
- The City of Albion’s website describes the EDC as follows: “The Economic Development Corporation of the City of Albion (EDC) was established by adoption of articles of incorporation dated July 29, 1977. The statutory authority for the adoption is found at MCL Section 125.1601, et seq. Board member’s qualifications are found at MCL Section 125.1604. It shall consist of at least nine members, including the Mayor who shall serve as a Director by virtue of holding the office of Mayor of the City of Albion – not more than three can be an officer or employee of the municipality. The Mayor appoints the board members with the advice and consent of the Council.” 1
- At all relevant times, the EDC was governed by its Articles of Incorporation, as amended, and Bylaws. (Articles of Incorporation, Exhibit 1; EDC Bylaws, Exhibit 2.)
- At relevant times, the EDC’s Board of Directors was composed of nine board members, including Plaintiff.
- On August 10, 2023, the EDC’s Board of Directors met at the Albion City Council chambers for a public special meeting.
- The primary topic of the EDC’s August 10, 2023 meeting was the removal of the EDC’s president and CEO, Virgie Ammermann, for cause.
- Ms. Ammermann was regarded as an officer and employee of the EDC and was employed on an at-will basis.
- At the special meeting, the EDC board members heard comments and deliberated Ms. Ammermann’s termination.
- At the August 10, 2023 meeting, after several hours of discussion, Ms. Ammermann was removed from her position after a majority of the EDC board members voted to terminate her position within the EDC. (See August 10, 2023 EDC Special Meeting Minutes, Exhibit 3.)
1 https://www.cityofalbionmi.gov/government/city_boards_commissions_and_committees/economic_development_corporation_tax_increment_finance_authority.php
- Plaintiff was one of the five EDC Board members who voted in favor of removing Ms. Ammermann from her position. Plaintiff and four other EDC Board of Directors members voted in favor of removing Ms. Ammermann from her position.
- The majority vote (five out of nine) of the EDC Board of Directors effectively terminated Ms. Ammermann’s role as president and CEO of the EDC pursuant to the terms of the EDC’s governing documents and the law.
- Ms. Ammermann’s removal from the EDC triggered significant backlash among the other EDC board members and, apparently, members of the Albion City Council.
- In an act of retaliation, the Albion City Council held a special meeting on August 15, 2023 to remove four of the five EDC board members who voted in favor of removing Ms. Ammermann from their respective positions within the EDC. Plaintiff was one of the four EDC board members that the City Council sought to remove.
- At the August 15, 2023, special meeting, the City Council members deliberated about their authority to remove the four EDC board members and the appropriateness of doing so.
- Under Article III, Section 4 of the EDC’s Articles of Incorporation, as amended in 1987, a Board of Director’s board member position “shall become vacant” upon “a removal from office in any manner provided by law.” (Articles of Incorporation, Exhibit 1.)
22. Furthermore, the Article II, Section 4 of the EDC’s Bylaws state:
E. removal of the incumbent by action of the Albion City Council for cause as provided by law, including without limitation these circumstances:
(1) the incumbent’s default to the City of Albion which continues more than thirty (30) days after notice by the city clerk, unless the director is, in good faith, actually testing the existence or legality of the default by an appropriate action at law or in equity;
(2) final conviction of the incumbent of a felony involving moral turpitude, or of an offense involving a violation of an oath of office;
(3) a judicial determination that the incumbent is legally disabled;
(4) failure of the director to take the oath or make the affirmation, or file a bond if required, within 10 days after the appointment is effective, or within not more than 30 days, if the board allows;
(EDC Bylaws, Exhibit 2.)
- Recognizing that the City Council could only properly remove a member of the EDC’s Board of Directors “for cause,” the City Council members who supported Ms. Ammermann attempted to articulate the cause for removing Plaintiff and the other EDC board members.
- The “cause” discussed by the proponents of the motion to remove the EDC board members all related back to their opinions as to how the EDC’s vote to remove Ms. Ammermann was handled.
- However, none of the reasons cited by the City Council amounted to “cause” as contemplated by the relevant governing documents or the law. To that extent, the City Council was advised by its attorney that it did not have cause to terminate the four EDC board members.
- Rather, it was evident by certain City Council members’ statements and positions that the only actual reason they sought to remove the EDC board members was because those board members successfully voted in favor of removing Ms. Ammermann on August 10, 2023.
- Ultimately, after nearly two hours of discussion and deliberation, the Albion City Council, in a four to three vote, approved the motion to remove Plaintiff and the three other EDC board members from their positions. (August 15, 2023 City Council Minutes, Exhibit 4.)
- After the August 15, 2023 meeting, the City Council members began discussing the process of engaging a third party to investigate Ms. Ammermann’s removal from the EDC, further indicating that the City Council had no actual cause to remove Plaintiff and the other three EDC board members.
- Since August 15, 2023, the EDC has reconvened with new members appointed and approved by the Albion City Council and immediately began taking efforts to rehire Ms. Ammermann as the EDC’s president and CEO, effectively bypassing the prior decision of the EDC Board of Directors.
- Plaintiff’s injuries in this case are non-compensable. Plaintiff is not seeking financial remuneration and there is no possible way for an award of money damages to remedy the harm caused by Defendants’ actions.
- The injury to Plaintiff is certain and great; the City Council illegally stripped of his ability to continue serving as a public servant of his own community and participate in the City of Albion’s economic development efforts as a duly appointed official of the city.
- Without a restraining order and a preliminary injunction maintaining the status quo, the City Council is very likely to replace Plaintiff’s seat on the EDC’s Board of Directors and the EDC is very likely to take action that unwinds previous decisions and efforts implemented while Plaintiff was serving in his role as an EDC board member. By all apparent accounts, the current members of the EDC intend to take action that will be very difficult, if not impossible, to unwind after Plaintiff is eventually reinstated on the EDC’s Board of Directors.
COUNT I – VIOLATION OF THE ECONOMIC DEVELOPMENT CORPORATION ACT
33. Plaintiff restates the previous paragraphs as though fully set forth below.
- The Economic Development Corporations Act, MCL 125.1601, et seq. (the “Act”), provides the legal framework for the creation, authority, and operation of public economic development corporations.
- At all relevant times, the City of Albion’s EDC was a “corporation” (as defined by the Act) duly authorized to function as the economic development corporation for the City of Albion.
- At all relevant times, the Albion City Council was a “governing body,” as defined by the Act.
- At all relevant times, Plaintiff was a duly appointed member of the EDC’s Board of Directors, thereby availing him of the rights and protections of the Act.
- Under Article III, Section 4 of the EDC’s Articles of Incorporation, as amended in 1987, a Board of Director’s board member position “shall become vacant” upon “a removal from office in any manner provided by law.” (Articles of Incorporation, Exhibit 1.) Accordingly, we look to the Economic Development Corporation Act to determine whether Plaintiff’s removal from the EDC’s Board of Directors was done in a manner provided by law.
- Pursuant to MCL 125.1604(6), that being Section 4 of the Act, Plaintiff could only be removed from his EDC director position “for cause by a majority vote of the governing body.”
- When the City Council voted to remove Plaintiff as a director of the EDC on
August 15, 2023, it did so without sufficient cause as required by the Act.
- Accordingly, the City Council violated the Act when it improperly removed Plaintiff as a director of the EDC on August 15, 2023.
COUNT II – BREACH OF EDC BYLAWS
42. Plaintiff restates the previous paragraphs as though fully set forth below.
- At all relevant times, the EDC’s Bylaws governed the operations of the EDC and the relationship between the Albion City Council and the EDC.
44. Article II, Section 4 of the EDC’s Bylaws state:
E. removal of the incumbent by action of the Albion City Council for cause as provided by law, including without limitation these circumstances:
(1) the incumbent’s default to the City of Albion which continues more than thirty (30) days after notice by the city clerk, unless the director is, in good faith, actually testing the existence or legality of the default by an appropriate action at law or in equity;
(2) final conviction of the incumbent of a felony involving moral turpitude, or of an offense involving a violation of an oath of office;
(3) a judicial determination that the incumbent is legally disabled;
(4) failure of the director to take the oath or make the affirmation, or file a bond if required, within 10 days after the appointment is effective, or within not more than 30 days, if the board allows;
(EDC Bylaws, Exhibit 2.)
- On August 15, 2023, the Albion City Council acted outside of its authority by removing Plaintiff and three other EDC board members without sufficient cause, and out of retaliation after the EDC voted to remove Ms. Ammermann from her role as president and CEO of the EDC.
- By removing Plaintiff and others from the EDC Board of Directors without sufficient cause, the Albion City Council violated the EDC Bylaws and acted outside of its mandate.
COUNT III – DECLARATORY AND INJUNCTIVE RELIEF
47. Plaintiff restates the previous paragraphs as though fully set forth below.
- Under MCR 2.605, there is an actual controversy between Plaintiff and the Albion City Council concerning the City Council’s arbitrary and retaliatory decision to remove Plaintiff and three other EDC board members from the EDC Board of Directors without sufficient cause.
- As mentioned above, MCL 125.1604(6) provides that Plaintiff could only be removed as a member of the EDC’s Board of Directors “for cause by a majority vote of the [Albion City Council].”
50. Further, Article II, Section 4 of the EDC’s Bylaws state:
E. removal of the incumbent by action of the Albion City Council for cause as provided by law, including without limitation these circumstances:
(1) the incumbent’s default to the City of Albion which continues more than thirty (30) days after notice by the city clerk, unless the director is, in good faith, actually testing the existence or legality of the default by an appropriate action at law or in equity;
(2) final conviction of the incumbent of a felony involving moral turpitude, or of an offense involving a violation of an oath of office;
(3) a judicial determination that the incumbent is legally disabled;
(4) failure of the director to take the oath or make the affirmation, or file a bond if required, within 10 days after the appointment is effective, or within not more than 30 days, if the board allows;
(EDC Bylaws, Exhibit 2.)
- There is no dispute that the Albion City Council could only remove Plaintiff (and other EDC directors) from the EDC’s Board of Directors for cause under the Economic Development corporation Act and the EDC’s Bylaws.
- On August 15, 2023, the Albion City Council acted outside of its authority by removing Plaintiff and three other EDC board members without sufficient cause, and out of retaliation after the EDC voted to remove Ms. Ammermann from her role as president and CEO of the EDC.
- Although some of the Albion City Council members attempted to articulate some sort of “cause” upon which to remove Plaintiff and the other board members, their purported reasons were without merit, failed to establish legal “cause,” and amounted to nothing but a pretext for their otherwise retaliatory and illegal actions.
- By removing Plaintiff and others as EDC board members without cause, the Albion City Council violated the EDC Articles of Incorporation, the EDC Bylaws, the City of Albion charter and related ordinances, and the Economic Development Corporation Act, and is acting outside of its mandate.
- Furthermore, because Plaintiff and the other EDC board members were removed without authority, any action taken by or with respect to the EDC Board of Directors subsequent to August 15, 2023, would lack the requisite authority and would, therefore, be null and void.
REQUEST FOR RELIEF
THEREFORE, Plaintiff respectfully requests this Court enter an order:
(A) Declaring that all actions of the Albion City Council in approving or authorizing the removal of Plaintiff and the other EDC board members from their respective positions on the EDC’s Board of Directors were done without proper authority and is invalid and of no legal effect;
(B) Declaring any EDC board member appointments made by the Albion City Council subsequent to the August 15, 2023 meeting as invalid and void;
(C) Declaring that any action taken by the EDC Board of Directors subsequent to the improper removal of Plaintiff and the other three EDC board members lacks proper authority and is, therefore, invalid and void;
(D) Preliminarily and permanently enjoining the EDC Board of Directors from taking any action that requires a vote of the EDC’s Board of Directors until a decision is rendered as to the status of Plaintiff’s role as an EDC board member;
(E) Preliminarily and permanently enjoining the EDC Board of Directors and the Albion City Council from taking any action inconsistent with the EDC’s August 10, 2023, decision to remove Virgie Ammermann from her position as president and CEO of the EDC;
(F) Preliminarily and permanently enjoining the Albion City Council from appointing new EDC board members until a resolution of this lawsuit is reached on the merits;
(G) Directing the Albion City Council to strictly abide by the City of Albion charter, the EDC Articles of Incorporation, the EDC Bylaws, and the Economic Development Corporations Act at all times going forward;
(H) Awarding Plaintiff his costs and expenses incurred in bringing this action, including reasonable attorney’s fees; and
(I) Awarding Plaintiff all such other relief as may be appropriate under the circumstances.
Date: September 25, 2023
Respectfully submitted,
Scott W. Kraemer (P69822)
Attorneys for Plaintiff
180 Monroe Ave NW, Suite 400
Grand Rapids, MI 49503
(616) 454-3700
kraemer@k2legal.com
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