Judge: Brown’s consulting was not OK
by Kim Isaza
April 04, 2012 12:00 AM | 1188 views | 0 0 comments | 4 4 recommendations | email to a friend | print
MARIETTA — Tuesday’s hearing before Judge Steven Schuster regarding Dwight Brown’s consulting contract with Cobb EMC was unlike any previous hearings involving the utility and a handful of members who sued the utility in 2007.

This time, the plaintiffs and the utility were on the same side in opposing efforts by Brown, the former chief executive of the member-owned electric cooperative, to be paid the $1.8 million left on a consulting contract. He and then-EMC board chairman Larry Chadwick signed the contract on March 1, 2011, the day after Brown retired as ordered in the settlement of the 2007 lawsuit.

Judge Schuster listened to about an hour’s worth of arguments in Cobb Superior Court on Tuesday before telling Brown’s lawyers that he would rule that the settlement barred the former CEO from working with the EMC in any capacity after Feb. 28, 2011.

“I’m not flip-flopping on this,” Schuster said.

One of Brown’s attorneys, David J. Larson, a partner in the Atlanta and Las Vegas offices of Weinberg, Wheeler Hudgins Gunn and Dial, earlier acknowledged to the court that he would likely appeal Schuster’s ruling.

“If you rule against us, we will appeal,” Larson said.

Brown did not attend the hearing, a fact that caught the judge’s attention.

“Mr. Brown was always invited,” Schuster said. “From the beginning of this litigation, I don’t recall him being in court.”

At issue Tuesday was the question of whether the settlement agreement left any room for Brown to continue working at the company after his required retirement.

Dwight Davis, a partner in the law firm of King & Spalding, argued that it did not and that the $13,800-per-week contract was “illegal.” The company also wants Brown to pay back the money he’s already received under the deal before it was canceled in July 2011.

Regarding the 2007 settlement agreement, Davis asked, “Was it the parties’ intention that Cobb EMC could have Dwight Brown continue at the company in some capacity? We believe your answer to that is no. The consulting agreement says Mr. Brown will get his (contract value) if he is wrongfully terminated for cause. We’re not terminating this for cause. We terminated it because it violates your order.”

Larson, though, insisted nothing in the settlement prohibited the consulting contract.

“The plaintiffs may not like this, you may not like it, the members may not like it, but is it barred by the settlement agreement?” Larson asked. “One thing we honor in this country is contracts.”

The dispute between Brown and the utility had been scheduled for arbitration in January when the utility asked Judge Schuster to decide on the validity of the consulting contract.

Three of the plaintiffs to the 2007 lawsuit attended the hearing with their lawyer, Pitts Carr.

“We urge that you protect the members from having to again compensate Mr. Brown,” Carr told the court.

Early in the hearing, when Larson mentioned a meeting in the judge’s chambers last July that Brown did not attend, Schuster said: “The court’s frustration all along is that Feb. 28 came and went and Mr. Brown never left. And then even after I ruled (June 24) that he couldn’t stay, nobody was listening to me! I made myself clear. He’s done!”

As for whether the company and Brown might settle the dispute, Davis said the chances of that were “zero.”

“The company feels Mr. Brown was fairly compensated for the time he was at the company,” Davis said. “He can’t now be a consultant, and therefore they aren’t going to pay him.”

Larson refused to comment to the Journal.
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