Judge criticizes Windermere about unauthorized land sales
JEFFERSON CITY, Mo. (BP)--Cole County Circuit Court Judge Thomas Brown III started a hearing on May 9 by expressing strong displeasure that recent real estate transactions by the renegade Windermere Baptist Conference Center board of trustees occurred before the court rules on the board’s legal authority.
Brown expressed frustration in front of lawyers for the Missouri Baptist Convention (MBC) and five breakaway entities about case delays that have given time for “one defendant to start dissipating its assets as if the court will do nothing about it.”
The comment referred to the Windermere board that transferred 941 acres to National City Bank in November 2005. NCB, in turn, sold the land in February 2006 to a company connected to William Jester, Jerald Hill and Hill’s brother, James Hill, former MBC executive director and current executive director of the breakaway Baptist General Convention of Missouri.
The judge expressed surprise that lenders and buyers would think the Windermere board had authority to sell the land before he ruled on its authority. Brown signaled that the transactions could be voided if the court finds that the breakaway boards acted unlawfully in changing their charters without MBC approval.
“Every Windermere trustee should personally read this May 9 transcript of Judge Brown’s comments,” Michael Whitehead, MBC lead attorney, said. “Every lender and title insurer who has been assured that Windermere’s board is on solid legal ground should get a copy and read it. Mr. Jester and the Hill brothers should read it. Then they should stop their shenanigans with the Windermere real estate. Show enough respect for the law to wait for the judge to rule.”
Also during the hearing, MBC lawyers showed the judge an affidavit filed in the Camden County real estate records by Jim Shoemake, Windermere’s counsel, in September 2004 titled “Notice of Termination of Lis Pendens.”
The affidavit purported to “terminate” a prior notice filed by convention lawyers warning the public of the lawsuit pending in Cole County which might affect title to the Windermere real estate. Shoemake’s affidavit mentioned that Brown had dismissed the Cole County petition in March 2004 but failed to mention that the case was on appeal. The MBC won that appeal and the case returned to the Cole County circuit court in May 2005.
John Holstein, MBC co-counsel and former chief judge of the Missouri Supreme Court, told Judge Brown that Shoemake’s affidavit was false and misleading and constituted new misconduct that ought to be addressed in the case.
Shoemake rose and told the court that he wanted to explain that he sent a cover letter to the Camden County clerk which referred to the fact that the case was on appeal. Shoemake said he didn’t want the court to think he had misled the clerk by hiding the fact of the appeal.
“But the cover letter to the clerk was not recorded on the public record,” Holstein retorted. “It is the affidavit that was recorded and that misleads the public.”
Overruling objections by the five breakaway entities, Brown also granted key legal motions by the MBC and scheduled several critical pre-trial steps leading to a trial-setting conference Oct. 2.
The court granted MBC’s motion to amend their petition, adding information regarding a conspiracy among breakaway leaders, facts uncovered during the prior depositions in the case. The “third amended petition” also adds a request for the remedy of “rescission” whereby the convention would get back the Windermere real estate and some of the cash conveyed to the five corporations before they broke away.
“A motion for leave to amend should have been routinely granted,” Holstein said afterward. “It is simply a matter of conforming the pleadings to the evidence we have discovered.
“I could not believe how much time we had to spend in this hearing listening to the defendants argue vigorously against our amendment. The court naturally allowed our amendment.
“In all my years as a trial judge, I never denied a motion to amend in a case that is not even set for trial. I even allowed amendments during the trial of a case.”
The court allowed the defendants 30 days to file their answers to the amended petitions. He then allowed the parties 30 days to file any “dispositive” motions that could allow the court to resolve any key legal issues without waiting for a jury trial. Counsel for both sides agreed that several key issues were pending before the court at the time of the appeal and now needed to be raised and resolved.
“From the beginning, Mr. Shoemake has grounded much of his breakaway strategy on the legal theory that the MBC has no standing to bring this lawsuit,” Stan Masters, MBC co-counsel, said afterward. “The Court of Appeals rejected most of this theory, but they did not reach one part of his argument.
“Defendants argue that R.S. Mo Section 355.141 means that only the attorney general can bring this type of lawsuit against a nonprofit corporation. The statute doesn’t say that and has no application to our case. It’s time to put that issue to rest,” Masters said.
The court’s July deadline for filing dispositive motions could mean hearings and key rulings would be made by early August. MBC attorneys were pleased that the court is putting the issues on a fast track, and they said they believe that favorable rulings on these key issues may force some defendants to “see the handwriting on the wall.”
“Mr. Shoemake persuaded the breakaway trustees that a 1935 Missouri Supreme Court case had already held that the MBC doesn’t exist as a legal entity and can own no contract rights,” Whitehead commented. “The Court of Appeals has already rejected that part of his legal theory. That should have been enough to wake up some of the breakaway trustees.
“When the court rules that 355.141 does not bar MBC’s standing, Mr. Shoemake’s legal charade should be over,” Whitehead predicted. “The 141 spell he seems to have cast on trustees, bankers and others should finally be broken. But folks who want to avoid personal liability have ample cause to wake up now and stop the intentional wrongdoing.”
The court also heard a report on the depositions that have been taken regarding the Windermere real estate transactions during the past few months. Whitehead reported that the deed from Windermere to National City Bank was executed before the court’s temporary restraining order was entered Dec. 19. A deed from NCB to Jester’s business was executed in February 2006, after Brown issued a temporary restraining order. Whitehead reported that MBC attorneys had subpoenaed Jester and his company, Windermere Development Company, to give a deposition on April 7. Jerald Hill appeared on behalf of the company but refused to produce most of the documents requested. Jester did not appear, claiming that recent life-threatening surgery prevented him from giving a deposition.
Holstein told Brown that Jester and his attorney had refused to provide information about the nature of the medical condition and, more importantly, failed to say when Jester would be able to testify at a deposition. Holstein said Jerry Hill had testified that Jester was in the business office in Springfield after his emergency surgery, and a few days before the deposition date, and that Jester had driven himself to his lake home to recuperate on the date the deposition was scheduled.
Brown granted MBC’s motion to compel Hill’s attendance at a second deposition and to produce remaining documents he had refused to produce on April 7. The judge suggested that the next procedural step would be to file a motion for contempt of court if Jester failed to attend and failed to provide adequate medical evidence to excuse his deposition at this time.
Whitehead said he will notice-up Jester’s deposition and will follow the court’s suggestions regarding the contempt procedure, if necessary, to get Jester’s deposition.
Whitehead reported that he intends to take the deposition of Chet Reid, president of California Plan of Church Finance, Inc. (CPCF), which is now set for June 6. CPCF helped Windermere arrange refinancing of its debt, finding two California banks which have loaned $14 million for a one-year term, due and payable on Nov. 15. CPCF is a church bond sales arm of the California Baptist Foundation and has agreed to sell bonds to pay off Windermere’s debt to the California banks.