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UDWI REMC files counterclaim against former CEO Brian Sparks
BLOOMFIELD – The Utilities District of Western Indiana REMC filed a counterclaim today against former Chief Executive Officer Brian Sparks, who sued the Cooperative in December alleging Breach of Contract and other damages.
The counterclaim was announced in a press release from UDWI REMC on Wednesday morning.
The counterclaim, filed by UDWI REMC’s legal counsel, affirms the Cooperative’s assertion that Sparks was terminated for cause and further cites he owed a fiduciary duty to the Cooperative, which he failed to honor during his employment from 2006 to 2017.
The counterclaim states that Sparks abused his position as CEO and put his and his family’s interests above those of the Cooperative and its members. The filing offers examples of Cooperative funds being used for sports tickets for personal use, sponsorships not affiliated with any UDWI business interest, unapproved and excessive charitable donations, and political contributions that were not actually given to political candidates or causes.
Included in the filing, are allegations that Sparks caused UDWI to incur improper and personal expenses for him and members of his family, and that he did not follow appropriate procedures for documentation, reimbursement and did not demonstrate legitimate business purposes for expenses. The claim states that Sparks’ conduct constituted malicious, fraudulent and, in some cases, blatant theft or conversion of UDWI funds.
UDWI’s counterclaim requests an award for damages, which includes all losses caused to the Cooperative by Sparks including the ongoing and significant costs of the internal investigation related to his actions, monies paid to Sparks that he unjustly collected during his employment, and attorney’s fees.
UDWI staff and Board of Directors will provide no additional comments regarding the counterclaim and pending legal matters.
Sparks filed his civil suit Dec. 18, 2017. The suit requests a “complaint and demand for jury trial.” The 13-page complaint alleges breach of contract and unpaid wages.
UDWI REMC board of directors placed Sparks on paid administrative leave May 2, 2017 pending the outcome of an internal audit. The board of directors announced June 30, 2017 Sparks’ employment had been terminated.
“Upon our review of the information from the internal audit, and after much thoughtful deliberation, we determined Mr. Sparks did not fulfill management expectations for UDWI. Mr. Sparks is relieved of all duties and responsibilities effective immediately,” the June release stated.
Sparks worked for the cooperative for a total of 33 years, starting his career as a lineman and working his way up. He spent the last 10 years serving as CEO of the cooperative.
The complaint states Sparks and REMC entered into a three-year contract, titled “Chief Executive Officer Employment Agreement,” starting July 27, 2015.
“...And thereafter his contract would automatically renew for three-year periods unless canceled under clause six of his contract,” the complaint states.
The clause reportedly states the CEO must be given 30 days notice in writing if the agreement were to be canceled and also pay “the CEO severance pay consisting of three years salary plus all accrued unused vacation and sick leave, plus an amount equal to the cost of 36 months individual and dependent/family health insurance plan.”
The complaint also notes another clause of the employment contract reportedly states Sparks could only be relieved of his duties if “the CEO engages in an act of omission or dishonesty, fraud, misrepresentation, conflict of interest, break of fiduciary duties or any act of misfeasance, malfeasance or moral turpitude.”
The complaint states Sparks did not violate any of the terms outlined in the contract during his employment.
“Contrary to REMC’s contentions, REMC did not have cause to terminate under (the clause),” the complaint says.
At the time of the complaint, it is alleged Sparks has not been paid his contractual severance compensation, though a notice of termination from REMC allegedly states he would be paid for time worked and unused paid-time-off up to the date of termination.
“At the time of termination, Sparks had earned and accrued 1,000 hours of vacation time and 1,000 hours of sick time, with an approximate value of $189,420,” the complaint states, noting the liquidated damages total $378,840 plus attorney fees and costs.
The complaint specifically requests a jury trial in the matter, noting a preferred venue in Greene County.