Plechner v. Widener College, Inc.

• Decision Date: 29 July 1976
• Docket Number: Civ. A. No. 75-2862.
• Citation: 418 F. Supp. 1282
• Parties: Richard F. PLECHNER, Plaintiff, and Alfred Avins, Intervenor-Plaintiff, v. WIDENER COLLEGE, INC., a Pennsylvania corporation, et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

418 F. Supp. 1282

Richard F. PLECHNER, Plaintiff and Alfred Avins, Intervenor-Plaintiff, v. WIDENER COLLEGE, INC., a Pennsylvania corporation, et al., Defendants.

Civ. A. No. 75-2862.

United States District Court, E. D. Pennsylvania.

July 29, 1976.

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Alan S. Fellheimer, Philadelphia, Pa., for plaintiff.

Alfred Avins, intervenor-plaintiff, pro se.

Franklin Poul, Judith Cohn, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for defendants.

OPINION AND ORDER

EDWARD R. BECKER, District Judge.

I. Preliminary Statement

At stake in this unusual lawsuit is the control of the Delaware Law School (DLS), which was founded in 1971 by Dean Emeritus Alfred Avins (Avins), one of the plaintiffs. DLS is located in Wilmington, Delaware. The other plaintiff, Richard F. Plechner, is a DLS trustee. The legal issues before us concern the validity of the transactions in July, 1975, which resulted in the affiliation of DLS with defendant Widener College, Inc. (Widener) and in the transfer of governance of the law school from a Board of Trustees dominated by Avins to a Board, the majority of whose members were named by Widener.¹ However, the central and controlling issues are not legal but factual. Those factual issues emerge mainly from the tense and critical period in the life of DLS when accreditation of DLS by the American Bar Association (ABA) was in doubt. Unless DLS was accredited prior to the graduation of DLS' first class, the graduating students in that class would not be qualified to take bar examinations in most states. Moreover, later accreditation would not have the effect of qualifying these students. The doubt over accreditation thus presented to hundreds of students, who had committed years of study to the ambition of a career at the bar, the spectre that a significant portion of their lives might be wasted.

This thorny period was climaxed by the DLS-Widener affiliation and subsequent ABA provisional accreditation of DLS. Defendants, Widener and DLS, contend, inter alia, that DLS had been run by Avins as a "one-man law school," and that without the DLS-Widener affiliation there would have been no accreditation. The premise of plaintiffs' case is that the accreditation crisis was significantly fomented or fueled by actions of representatives of the defendants, with the connivance or succor of representatives of the Accreditation Committee (Committee) of the Council of the Section of Legal Education and Admissions to the Bar of the ABA (Council), and that accreditation would have followed without affiliation. The principal gravamen of plaintiffs' case is that the DLS-Widener affiliation was a product of coercion and undue influence upon the DLS trustees who voted for affiliation with Widener, or that their vote for affiliation was a product of duress. Plaintiffs also contend that the mechanism by which the affiliation was accomplished, i. e. the issuance by DLS, previously a non-stock corporation, of one share of stock with a par value of $1, and its transfer to Widener for the sum of $1,² violates the corporation law of Delaware in that: (1) there was inadequate consideration paid for the stock since DLS had assets valued well in excess of $1; and (2) as a Delaware nonprofit corporation, DLS could not issue stock hence the issuance of the stock was ultra vires. The relief sought by plaintiffs is the setting aside of the DLS-Widener affiliation and the removal of the present law school trustees so that the pro-Avins trustees could resume control of the law school.

After disposing of a significant number of pre-trial matters,³ we proceeded to a bench trial⁴ at which we heard some five days of testimony. It soon appeared that the plaintiffs could not establish that the defendants or their representatives engaged in acts of coercion against or exerted undue influence over the DLS trustees who voted for merger or that they placed them under duress. What plaintiffs were advancing, it seemed to us, was what we dubbed the doctrine of "ambient coercion," i. e. that the atmosphere was so highly charged, that pressure from DLS students and their parents (many of whom were lawyers and judges who had intervened and taken active roles in what had become an accreditation campaign) was so great, that the DLS trustees felt compelled to vote for Widener affiliation. Of course, there is no such doctrine of "ambient coercion," but in any event, the evidence, both in its discrete portions, and in its totality, demonstrated to us beyond peradventure that the trustees were not subject to compulsion, duress, coercion or undue influence, but rather acted responsibly and voluntarily in voting for affiliation with Widener in the manner and by the means noted above.

The critical time in the quest for accreditation was the summer of 1975, when the first DLS class was about to graduate, for, as we have noted, under most state bar admission standards subsequent accreditation does not resurrect a wasted law school career. As will appear from our findings of fact, there is no doubt that but for affiliation with Widener, DLS would not have been accredited at that critical time, nor is there doubt that the trustees reasonably believed this to be so and acted accordingly. Neither, as will appear in our discussion of the applicable law, is there merit in plaintiffs' contentions as to the validity of the affiliation mechanism under Delaware corporation law. Accordingly, we will enter judgment for the defendants.

What now follows is our more detailed findings of fact as well as our conclusions of law, as required by Fed.R.Civ.P. 52(a). Because of the unique nature of the case and the importance of the matter to the parties and the DLS students, we have chronicled the relevant facts in considerable detail.

II. Findings of Fact

Delaware Law School was incorporated in Delaware as a non-profit corporation on June 1, 1971. Avins, who was its incorporator and first dean, started the school to create a "haven" for conservative members of the teaching profession.⁵

By the terms of the original certificate of incorporation, the purposes of the corporation were "to establish and operate a law school in the State of Delaware" and engage in the various activities normally related to such an enterprise. The trustees or "members" had no right to any financial benefit arising out of their interest in the corporation. Upon the filing of the certificate of incorporation, the powers of the incorporator Avins terminated and were transferred to a Board of Trustees composed of Avins, Delaware State Senator Dean C. Steele, and Cornelius Milione, a Wilmington banker. The trustees had the power to dissolve the corporation and donate the assets to "another school." The corporation also reserved the right to restate or amend, alter, change or repeal any provision contained in the certificate. Finally, in contemplation of a future affiliation with a university, the certificate provided that the corporation could "merge, affiliate or contract with another non-profit educational institution under terms and conditions to be set by the Board of Trustees." Such an intention was indicated in the first catalogue of DLS.

The first students at DLS enrolled in a four-year evening program in September, 1971, with graduation set for spring of 1975.⁶ Avins taught the first classes, which were held in space rented by him at the Wilmington YMCA. The only other employee of DLS at the time was a part-time librarian. During the first year Avins handled all the administrative details as well, with the assistance of only a few part-time personnel. At this time DLS had neither degree-granting power nor accreditation from the ABA which was necessary to enable its graduates to take bar examinations in most states. Avins, however, apparently anticipated no problems in getting the necessary approvals.

By the fall of the next academic year, DLS moved to its present quarters in a former church in Wilmington which Avins had arranged for DLS to purchase by use of a purchase money mortgage. The building was in dilapidated condition, and Avins personally supervised its clean-up. At the same time, he was teaching classes and acquiring books for a library. The story of how Avins, using the help of students, revamped the physical facilities, furnished the building, and built an adequate law school library is truly astounding. We will not recount here how he (to use his own term) "scrounged;" e. g. searched out the estates of deceased lawyers and purchased books from them, obtained (at distress prices or gratis) shelving and furniture from structures about to be razed, acted as watchman for the premises, and supervised a clean up, paint up and fix up campaign, etc., but will comment only that we marvel at his resourcefulness and energy.

In the fall of 1972, DLS admitted its first full-time day students. These students also anticipated graduation in the spring of 1975. During the 1972-73 academic year, DLS hired four faculty members. Apparently as a "gimmick" to render DLS distinctive and aid its quest for accreditation, Avins imposed the requirement that a faculty member could not obtain tenure unless he had a J.S.D. or Ph.D. (law) degree. No faculty member except Avins had such a degree.⁷

During 1972 DLS attempted to obtain degree granting power. Avins initially applied to the Delaware Department of Public Instruction for such approval, but when he was unsuccessful, he sought legislation as an alternate route. Legislation was then passed which would have given DLS degree granting power if an application were made and there were no objection made by the Chief Justice of the Delaware Supreme Court, the Chancellor of Delaware, the Presiding Judge of the Superior Court, the Attorney General, the State Superintendent of Public Instruction, the President of the Delaware State Bar Association or the Chairman of the Delaware Board of Bar...