Opinion ID: 2112780
Heading Depth: 2
Heading Rank: 3

Heading: The Trial Court Possessed Equitable Power to Order Restitution Where the Individual Trustees were Afforded Legal Counsel at the Corporation's Expense

Text: The Trustees contend that the trial court's restitution order is invalid, asserting that WCOA suffered no damage as a result of their decision to discontinue funding HCC and that the individual Trustees derived no benefit from the corporation's payment of legal fees on their behalf. They further assert that since HCC's funding was discontinued, the corpus of WCOA's assets has increased. Finally, they assert that their most recent version of the by-laws allowed for the corporation's expenditure on their defense. We reject the Trustees' argument for two reasons: (1) the decision to discontinue funding HCC impeded the Directors' ability to carry out the corporation's charitable mission and disadvantaged the population that HCC serves; and (2) without the corporation's payment of the Trustees' legal fees, the Trustees would have had to expend that cost themselves. [17] Pursuant to the trial court's order for an accounting under Super. Ct. Civ. R. 58, the Trustees filed an Accounting and Supplement complete with several objections. Upon consideration of those documents, the trial court ordered restitution based on: (1) the Trustees' unilateral efforts to restructure WCOA, which included $16,444.87 of expenditures paid to Williams & Connolly LLP for services rendered from June 1999 to June 2000, and Ms. Ruth E. Rucker, whom the Trustees hired in 2000 to consult on alternative uses of WCOA's assets; (2) the Trustees' unauthorized expenses between the inception of this case in June of 2000 and the court's Declaratory Judgment Order issued on November 19, 2003, which included $233,847.67 paid in legal fees to Williams & Connolly LLP and $1,427.59 paid to Ms. Rucker; (3) the unlawful exercise of authority after declaratory judgment, which included $3,793.65 in legal fees paid to Williams & Connolly LLP; and (4) the unlawful exercise of authority after the trial court's affirmation of declaratory judgment in March 2004, which included another $139,879.97 in legal fees paid to Williams & Connolly LLP. The trial court ruled that each Trustee shall be held jointly and severally liable for the restitution ordered. The trial court possessed equitable power to order restitution. The equitable powers of the trial court to effect remedies are wide and absent an abuse, they should not be circumscribed. See Lemon v. Kurtzman, 411 U.S. 192, 200, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973) (holding that the trial court possessed broad discretionary power when crafting a remedy based upon equitable restitution, thereby requiring narrow appellate review). Here, the Trustees ceased funding a longstanding charitable activity of the corporation and ousted the Directors, exceeding their role as provided by the WCOA Charter and eliminating the role of the Directors. After exceeding that role, the Trustees utilized corporate funds to defend their actions. Although the most recent version of the by-laws provides that the corporation may expend funds to defend the Board of Trustees, these by-laws were unilaterally passed by the Trustees after they had ousted the Board of Directors. By-laws of the WCOA art. V, § 2 (Feb. 25, 2000). The Trustees' reliance on them is unavailing. [18] We review the trial court's construction of a statute de novo as a question of law. In re Doe, 855 A.2d 1100, 1102 (D.C.2004). Having done so, we conclude that the trial court's construction of the WCOA Charter is correct. In all respects, the judgment of the trial court is affirmed. So ordered.