Continuing to play the cards being dealt to them, regardless of mounting evidence to the contrary, Black Diamond Councilmembers Erika Morgan, Brian Weber and Pat Pepper were dealt yet another blow when the attorney for the City in the legal case brought by CCD Black Diamond Partners LLC produced more evidence not in their favor.
The latest evidence to hit the fan centered on their ability/inability to each pay $50,000 towards a surety bond of $150,000 in preparation for the lawsuit in front of them. In their latest move, Morgan, Pepper, and Weber have been attempting to change the Court’s order regarding their preliminary injunction by requesting a reconsideration for paying the fees as they claimed they were unable to obtain a surety bond as earlier directed. The purpose of the bond was to assure the City that it would be repaid if the Court finds the Councilmembers are responsible for the costs of their own defense rather than putting the burden on the City taxpayers.
According to court papers, the three Councilmembers had not submitted any evidence or sworn declaration showing their attempts or inability to secure the bond. They also proposed to solicit third party cash deposits, which could possibly be considered as illegal.
As proposed by the Councilmembers due to their inability to secure a bond, they needed to look for cash contributions from third party sources. They stated that they were acting within the scope of their duties as Councilmembers from the beginning of the lawsuit, which maintained that the three Councilmembers had violated the Open Public Meetings Act (OPMA) over 135 times. This raised the question that if they were acting within the scope of their duties, they are not allowed to solicit gifts and donations for their defense because of their actions. And while the three Councilmembers were arguing for third party cash donations, they did not identify who the donations were to come from or the amount of the contributions from the contributors.
Morgan, Weber and Pepper also suggested that they should be allowed funds that continue rolling in even past the posted surety. However, because there is a very real possibility that the Councilmembers will exceed their funds and not be able to post sufficient security, they more than likely will argue prejudice or injustice if not allowed to continue with their attorney. For their part, the City is asking that the full bond amount be secured up front to avoid the prejudice/injustice thereby compounding the costs on the City’s taxpayers.
While arguing for changes to the conditions of their preliminary injunction, it was pointed out that the Councilmembers have supplied no evidence that they are unable to meet the original Court requirements. The same day they filed their motion to make changes to the conditions of the preliminary injunction, they stated that they did not have personal insurance while at the same time did not include any information regarding any of their financial assets, any of the efforts they made to secure a bond including companies they tried to contact, any evidence as to why they were turned down, or any financial statements showing their personal conditions.
According to Court documents, the only declaration supporting the Councilmember’s inability to secure a $150,000 bond came from their lawyer, Jeff Taraday stating, “ ‘…have not been able to obtain the $150,000 surety bond[s,]’ and that it is unlikely they will ever be able to qualify for this bond or even a $50,000 bond.”
This however did not show the whole picture. While the three Councilmembers were not showing the Court any of their financial assets such as savings, investments, tax refunds, and more, a look at their State of Washington Personal Financial Affairs Statements through the Public Disclosure Commission that were filed in order to hold public office, a different story emerges. For instance, according to Court documents with supporting evidence through the statements, Morgan has property valued at over $120,000 as well as is a 17.9% owner of Morpac Industries, Inc. She is also a shareholder in the same company with an income of between $72,000 and $167,000.
Then taking a look at the other two Councilmembers, Pepper receives her income from the Social Security Administration as well as multiple pension sources giving her a value of between $52,000 and $119,000. Weber on the other hand did not report any income or assets in 2015, yet on the Personal Financial Statement he submitted in May 2015 while running for a seat on the Council, he showed that he earned between $48,000 and $119,000 from his job as an Engineer at Boeing. He also claimed that his spouse earned between $24,000 and $47,999 from her job at UW/Valley Medical Center.
As pointed out in the Court papers regarding Morgan, Weber and Pepper, “This evidence is inconsistent with a claim that they cannot afford the surety bond. There has simply been a lack of effort to put forth evidence that they tried to comply with the Court’s order. Instead, the individual Defendants are asking the Court to accept at face value the representation of their lawyer that all three have tried and failed to obtain a bond without any supporting sworn testimony. The individual Defendants have the burden of proving that ‘substantial justice’ has not been done by this order, but have not provided sufficient evidence to allow the Court to grant their requested relief.”
In their concluding remarks, the Court documents noted that the City was concerned that Morgan, Weber and Pepper may violate a state ethics law if allowed to receive cash donations from third parties. The City is also concerned that the Councilmembers have not submitted any sworn declarations or evidence regarding their inability to obtain the surety bond of $150,000 as required by the Court as a “condition precedent to getting the preliminary injunction.”
In the end, the judge sided with the City’s concerns and denied Morgan, Weber, and Pepper’s motion for a reconsideration of the preliminary injunction. The judge clarified that some of the security may be provided in cash but did not endorse fundraising or borrowing since the question of legality was undecided. The judge also ordered that a conference take place on April 28 to develop a discovery plan and a plan for early mediation.