Oak Hill’s boardroom dispute heads to trial

This post is one in a partnership between the Rochester Beacon and veteran reporter Gary Craig, featuring articles published on his Substack site.

Whether the Oak Hill Country Club wrongly ousted a board member doesn’t really matter, lawyers for the club argue.

Why? Because the board member, retired businessman Eugene Baldino, is alleged to have resigned before the board’s action.

Yes, the topsy-turvy lawsuit embroiling the venerated country club – home to past and future major golf tournaments – continues to get topsier and turvier.  And this lawsuit – one I wrongly predicted over a year ago would surely settle – is now on the eve of trial.

Thousands of pages of court documents have been filed in the proceeding, divisions within the country club membership have become inflamed, and, over the past year, the club’s own reputation has been tarnished and burnished: Tarnished by the allegations of Animal House-like behavior among some of the club’s wealthy members and burnished by its recent choice to host the PGA Championship in 2035.

The latest legal volley, with claims that Baldino chose to quietly resign from the board, has its own Animal House resonance: Is there “triple secret probation” in the Oak Hill code of conduct? (If you know, you know.)

Probably over $1 million has been spent on legal fees by the parties, and those costs will surely balloon with the forthcoming trial. Club insurers have said they will not cover the defense so club members may well shoulder the costs.

 The trial is scheduled to begin Monday, Dec. 1, presided over by state Supreme Court Justice Daniel Doyle. It could last a week or more, likely more. Doyle has set aside Dec. 1 through Dec. 22.

I plan to attend a good portion of the trial, though do have conflicts for some days. I have filed a photo request for photos for the trial’s start and should know something this coming week. If approved, it’s likely my friend and former colleague, photographer Jamie Germano, will join me. Jamie and I both retired from the Democrat and Chronicle in recent months.

I also wonder whether this will be the first request in New York, if not beyond, for camera presence at a court proceeding on behalf of a Substack user.

Resigned or jettisoned, or both?

Over the past week, attorneys for both sides have filed pretrial reports, highlighting the arguments they plan to present at trial. The country club along with some of its board members and senior employes are being sued, and three different law firms are providing representation. (One is used because of a conflict for a past board member.)

“Significantly, the Court need not even reach the issue of the validity of the Board’s vote to remove Baldino on June 18, 2024, because prior to then, he had already resigned,” the country club attorneys contend.

The club has maintained that it ousted Baldino because of rude and ugly behavior to a club dining manager, a claim that the club employee, Hanna Halpin, says has largely been manufactured by the club. She, too, is suing Oak Hill.

The board alleges that Baldino resigned on May 21, 2024, and it was approved by a 13 to 2 board vote. Baldino, the club lawyers say, later tried to “renege on his resignation.”

Baldino’s lawyer has maintained that there was no written agreement about any resignation, court papers show, and that the process to remove him breached state laws for nonprofit boards. The Oak Hill attorneys say the process was proper and legal, even if irrelevant after the supposed resignation.

The discussions of a possible resignation apparently came during settlement negotiations, which never led to a resolution.

How did it get this bad?

The central issue in the lawsuit, from Baldino and four other club members, is the vote to kick Baldino off the board and whether it was legally proper. That can seem like a narrow and arcane question, and in many ways it is.

Nonetheless, the lawsuit spiraled into allegations of fiscal malfeasance, crass behavior not only on the part of Baldino but also other Oak Hill Board of Governors members as well, and allegations that one board member may have tried to coerce a key witness with a payment.

“Indeed, the (Oak Hill) Board had previously determined that far more serious allegations against other Governors merited no disciplinary measures whatsoever,” Kelly Foss, the attorney for Baldino and the other petitioners, wrote in court papers. “Such disparate treatment serves as proof that the Board’s underlying decision was arbitrary and capricious.”

Baldino has insisted that the board was not exercising fiscal oversight and that the club’s finances needed to be better monitored. He was elected to the board with a pledge to tighten the fiscal reins, his supporters have said.

Baldino’s push for access to more financial records and more fiscal transparency is the true reason for his removal, he has argued.

Foss writes in court papers that, at trial, there will be evidence that Baldino raised questions about “Club’s finances and suspected mismanagement of discretionary funds, about misuse of Club assets, about lack of oversight over executive reimbursements and compensation, and about inaccurate and unverifiable Club tax filings.”

What to expect at trial?

The trial will hinge on some of the nuances of state laws that impact nonprofit boards and whether the laws were ignored. But, beyond that, it’s possible if not likely that the allegations of juvenile behavior by some members – drunkenness, anger on the links, churlish conduct toward club employees – will also be part of the testimony.

Baldino has been accused of not one but two boorish interactions with staff, and court papers hint that the club is prepared to offer testimony about the earlier allegation.

Baldino’s “member file contained a recommendation from a prior Board, composed of a different slate of Governors, that should he do something like this again, he be suspended from the Club.” Club lawyers said in court papers.

As well, the club contends that it had legal advice from a labor counsel saying that “Baldino’s actions created the risk of legal exposure, and counsel recommended that formal discipline be taken against him.”

(As I’ve earlier reported, the board also may have ignored the advice of a member of the board – a lawyer who also was the board’s only woman – that the board might need to pay more attention to state laws before Baldino’s removal.)

The most delicate parts of the trial will likely be the expected testimony of former board president Robert Sansone and Halpin.

Club lawyers are likely to portray Halpin as a former employee who has altered her story about the interaction with Baldino and is now misrepresenting it for her own lawsuit. Halpin has maintained that Baldino was not over-the-top rude and that the club clearly and duplicitously tried to use her to oust Baldino.

Both Sansone and Halpin were deposed for hours.

Sansone knew Halpin from the club and once, learning that she was having some financial struggles, sent her money which he has portrayed as a helping hand. This happened during the pendency of the litigation and Baldino and his allies have questioned whether this was an attempt to sway Halpin and her testimony.

It’s hard to say how long after the trial before Doyle renders a decision.

And it’s even harder to predict whether, thereafter, the losing side appeals and opts to spend hundreds of thousands more.

Gary Craig is a Rochester Beacon contributing writer. A retired Democrat and Chronicle reporter, he now writes on Substack.

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