Phi Delta Theta Alumni Association vs Colgate University
filed July 20, 2005

STATE OF NEW YORK
SUPREME COURT COUNTY OF MADISON
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CHARLES H. SANFORD, III, PETER O. HANSON,
JOHN R. WILLARD, NORMAN J. PLATT, et al.,
representing at least five percent of the members of
New York Zeta of Phi Delta Theta Corporation,
A New York Not-For-Profit Corporation, on behalf of COMPLAINT
All Other Members Similarly Situated,
Index No.
Plaintiffs,
-vs-
COLGATE UNIVERSITY,
a New York Not-For-Profit Corporation,
Defendant.
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The Plaintiffs, by its attorneys, Smith, Sovik, Kendrick & Sugnet, P.C.,
complaining of the Defendant, Colgate University (“Colgate” or the “University”), on
behalf of themselves as members of New York Zeta of Phi Delta Theta Corporation
(“PDT Corp.”), in the right of PDT Corp., and of all of the members thereof similarly
situated, respectfully allege as follows:
1. The plaintiffs, Ivar E. Berg, Donald Bezuyen, Jeffrey W. Brown, Kurt H.
Brown, Howard Buckley, M.D., James Buckley, Roland Carlson, John S. Clarke,
Michael Collins, Herbert H. Colwell, Jr., James A. Courter, John B. DaGrosa, Sr., Arthur
Davies, Henry John Deion, John P. Devaney, Maurice East, Frank Filisko, Nelson J.
Gough, Campbell H. Gould, James A. Hall, Peter O. Hanson, Robert A. Hartje, Warren
L. Hickman, Ronald G. Holly, Jr., Bruce Kay, H. William Knapp, Arnold Koch, Jr.,
Ronald Kutrieb, Douglas B. Lapierre, Louis F. Larsen, William A. Leek, James Levine,
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Michael Luzzatto, James Lydic, Harvey A. Lynch, Malcolm Lynch, James A. Madura,
Tim Martindale, John T. McKenzie, Michael McKittrick, David R. Meredith, M.D., Greg
Narag, Peter Nogueras, Frank A. O’Toole, Norman J. Platt, George H. Potter, Douglas C.
Reilly, Wayne A. Rich, R.G. Richardson, Samuel C. Sanford, Charles H. Sanford,
Lawrence Santos, S. Richard Savage, Rob Schutt, Matthew Seeve, Daniel O. Smith,
Sidney Strasenburgh, Bryan Taylor, John L. Theriault, Jr., William Gardiner Thompson,
William J. Torrens, M.D., Douglas W. Unger, H. Kent Vanderhoef, Charles R. Veley,
John R. Willard, John A. Willard, Robert W. Williams, Robert V. Wise, were and now
are members of record of PDT Corp., and in number constitute at least five percent of the
total membership of PDT Corp.
2. Defendant Colgate is a New York Not-For-Profit Corporation having its
principal place of business at 13 Oak Drive, 301 James B. Colgate Hall, Hamilton, New
York, 13346.
NATURE OF THE CASE
3. On May 31, 2005, PDT Corp. was forced to sell its chapter house (“PDT
Chapter House”) located at 114 Broad Street, Hamilton, New York, to Colgate pursuant
to a Purchase Offer and other papers contained in the Closing Binder (“Sale
Agreement”). PDT Corp. now seeks to rescind the sale of the chapter house to Colgate
and rescind the Sale Agreement because it was a contract of adhesion and a product of
economic duress. PDT Corp. was compelled to agree to the one-sided contract terms as a
result of the unequal bargaining power and wrongful threats by Colgate that oppressively
precluded the exercise of PDT Corp.’s free will. PDT Corp. had no choice but to
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relinquish its property to Colgate in light of Colgate’s threats to banish its
members/tenants. PDT Corp.’s existence depends on its resident members which Colgate
promised to expel from school if PDT Corp. did not agree to Colgate’s terms of sale.
4. The “Statement of the Relationship Between Colgate University and Its
Greek-Letter Organizations,” approved by the Colgate Board of Trustees July 11, 1991,
and Section IV amended by the Board of Trustees on October 16, 1999, constitutes a
contract between Colgate and PDT Corp. Colgate breached this contract by refusing to
recognize Phi Delta Theta as a fraternity at Colgate University unless PDT Corp. sold the
PDT Chapter House to the University.
5. PDT Corp. has no adequate remedy at law and will suffer irreparable harm
if not allowed to rescind the Sale Agreement and is, therefore, entitled to injunctive relief
by order of rescission declaring the Sale Agreement null and void.
6. Plaintiffs have initiated this derivative action pursuant to §623 of the New
York Not-For-Profit Corporation Law.
FACTUAL ALLEGATIONS
Phi Delta Theta Fraternity at Colgate University
7. Phi Delta Theta fraternity is a men’s college fraternity founded in 1848 at
Miami University in Oxford, Ohio.
8. Phi Delta Theta is a national fraternity with 165 chapters at colleges and
universities in the United States and Canada.
9. The chapter of Phi Delta Theta at Colgate University, known as the New
York Zeta Chapter, was founded in 1918.
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10. Prior to May 31, 2005, PDT Corp. owned and maintained the PDT
Chapter House. The PDT Chapter House was originally constructed in 1927.
11. PDT Corp.’s sole purposes are to provide residential services to Colgate
undergraduat es who are members of Phi Delta Theta fraternity and to organize, maintain
and manage the New York Zeta Chapter of Phi Delta Theta at Colgate University.
Colgate’s Action to Buy Fraternity Houses
12. By letter dated July 8, 2003, Colgate Board of Trustees Chairperson, John
Golden, announced a new program for residential education at Colgate (the “New
Residential Education Plan”).
13. As part of the New Residential Education Plan, Colgate recognized the
value of the fraternities and sororities as an integral part of the New Residential
Education Plan, citing self-governance, philanthropic and civic activities and other
valuable contributions by the fraternities and sororities to the Colgate residential
community life.
14. In implementing the New Residential Education Plan, Colgate required
that all Colgate students (with the exception of approximately 250 senior students who
are historically granted permission to live off campus) must live in university-owned
housing by the Fall of 2005.
15. In implementing the New Residentia l Education Plan, Colgate announced
its intention to purchase, and to subsequently operate, all fraternity and sorority housing
at Colgate.
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16. A series of negotiations took place with the Alumni Inter-
Fraternity/Sorority Council (“AIFSC”), which included various board members of the
various alumni owned fraternity and sorority chapter houses. PDT Corp. had
representation on the council through PDT Corp.’s Board of Directors.
17. All members of the AIFSC were opposed to the sale of the chapter houses
to Colgate and proposed alternatives to Colgate’s outright purchase of the chapter houses
and requested that Colgate consider alternatives, such as a long term lease.
18. Colgate summarily dismissed any alternative proposals and reaffirmed that
Colgate would only recognize the respective fraternity and sorority chapters including
Phi Delta Theta, if and only if the chapter houses were owned by Colgate.
19. In February 2004, Colgate submitted purchase offers to each Greek-letter
alumni organization.
20. By letter dated June 1, 2004, the Colgate Board of Trustees Chairperson,
John Golden, announced:
Because our New Residential Education Plan requires that all students live
in university-owned housing by the fall of 2005 (with the exception of
approximately 250 senior students who are historically granted permission
to live off campus), only those Greek-letter organizations that choose
to sell to the university will continue to be recognized by the university
and house undergraduate members in their traditional chapter
houses. (Emphasis added)
21. By letter dated June 22, 2004, Colgate’s Financial Vice President, David
Hale, announced:
We have also made clear to [the Colgate Alumni InterFraternity/Sorority
Council Property Committee] that Colgate University will only recognize
fraternities and sororities that are residential organizations beginning in
the fall of 2005. Organizations that choose to retain ownership will no
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longer be residential and accordingly will not be recognized by Colgate
after June 2005. In this regard, we are aware that there are ideas of houses
functioning as eating clubs or even continuing as underground,
unrecognized fraternities. Everyone should understand the [University]
will not permit this and will adopt a policy that any student who
participates in an unrecognized fraternity or sorority will be subject
to disciplinary sanctions including, possibly, suspension or expulsion.
(Emphasis added)
22. By a memorandum dated September 8, 2004, Adam Weinberg, Dean of
the College, announced:
Any Greek-letter organization that opts not to sell its house to the
university will not become a member of the Broad Street community and
will consequently forfeit university recognition as of July 1, 2005.
Beginning in the fall 2005 semester such organizations will not be
allowed to house or enroll Colgate students as members, and will
cease all operations. (Emphasis added)
23. By letter dated December 9, 2004, the Colgate Board of Trustees
Chairperson, John Golden, announced:
The fraternities and sororities that have agreed to sell their houses include
Beta Theta Pi, Delta Upsilon, Gamma Phi Beta, Kappa Alpha Theta, Phi
Delta Theta, Sigma Chi, and Theta Chi,. Delta Delta Delta and Kappa
Kappa Gamma sororities and Phi Kappa Tau fraternity don’t own
properties, and the university will be working with them on housing
arrangements…. Fraternities that have chosen to retain ownership of
their properties will not be allowed to house students next fall, and the
university will withdraw recognition of their undergraduate chapters
in summer 2005; Colgate will work with those students to find
appropriate university housing. (Emphasis Added)
24. Based on these threats and other acts/statements of coercion outlined
above, the Board of Directors of PDT Corp. had no choice but to recommend to the
undergraduate brothers and the alumni members that the PDT chapter house be sold to
Colgate in order to save its very existence from destruction by the University.
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25. The recommendation of the Board of Directors of PDT Corp. to sell the
PDT chapter house to the University was originally scheduled to come to a vote at a
special meeting of members of PDT Corp. held on Saturday, March 5, 2005, but failed
due to lack of a quorum. As a result, the meeting was adjourned to April 16, 2005.
26. By letter dated March 17, 2005, addressed to the members of PDT Corp.,
the Board of Directors of PDT Corp. gave notice of a special meeting of the members to
be held on Saturday, April 16, 2005. Based on the University’s coercive and oppressive
tactics, the Board solicited proxies from the members recommending they vote in favor
of the sale of the PDT chapter house to the University. These proxies had to be returned
by Thursday, April 14, 2005, to be valid.
27. In a Letter to the Editor published in the April 15, 2005 edition of The
Colgate Maroon-News, the student newspaper of Colgate University, Adam Weinberg,
Dean of the College, attempted to retract some of the University’s threats against the
fraternity stating:
Colgate will provide housing for Delta Delta Delta, Kappa Kappa Gamma,
and Phi Kappa Tau beginning in the fall …. Members of unrecognized
fraternities and sororities will not be stopped from associating and
gathering. Members of those organizations will continue to be recognized
as brothers or sisters and will be treated the same way as every other
student. However, the university will not allow them to recruit new
members. (Emphasis added)
This partial retraction occurred after all eligible proxies for the April 16, 2005 meeting
had been returned to PDT Corp.
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28. At the meeting of members of PDT Corp. held on April 16, 2005, based
on the proxies received by April 14, 2005, the sale of the PDT Chapter House to the
University was approved and the house was sold on May 31, 2005.
29. On or about May 10, 2005, prior to the closing, Charles H. Sanford, III, on
behalf of the Plaintiffs herein, made due demand upon the Board of Directors of PDT
Corp. to sue and prosecute the action herein, which demand was refused by the Board of
Directors. A copy of the demand letter is attached hereto as Exhibit “A” to this
complaint.
30. The deal offered by Colgate and that was eventually forced upon PDT
Corp. is one-sided, unfair, coercive and a result of oppressive one-sided unequal
bargaining positions. The Sale Agreement is a result of duress and adhesion because
among other reasons it requires PDT Corp. to sign a General Release of all claims from
the beginning of the world; it allows Colgate to amend its residential plan without notice;
it requires PDT Corp. to maintain an 80 percent minimal occupancy level in order to be
used as a fraternity; it requires PDT Corp. to acknowledge that Colgate’s policies and
procedures are not contractual and may be changed by the University unilaterally; it
reserves Colgate’s right to eliminate fraternities at its discretion; it requires the fraternity
to bear the cost of primary insurance and umbrella insurance and insure the University; it
essentially gives the University absolute control over the house, strips PDT Corp. of its
true existence and yet passes many of the costs of operating the home on to PDT Corp.
31. The University’s purchase of the chapter house and PDT Corp.’s surrender
of control of the house may be the first step toward elimination of fraternities at Colgate
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but the University cannot do so by stripping PDT Corp. of its property and providing it
with no other choice but to sell the property to Colgate on the University’s terms
burdened by threats against PDT Corp.’s very existence.
Relationship Statement
32. The relationship between Greek-letter organizations and Colgate is set
forth in a “Statement of the Relationship Between Colgate University and Its Greek-
Letter Organizations,” approved by the Colgate Board of Trustees July 11, 1991, and
Section IV amended by the Board of Trustees on October 16, 1999 (the “Relationship
Statement”).
33. The Relationship Statement sets forth “Basic Standards” by which Greekletter
organizations must abide to “receive and retain University recognition.” It further
provides that “[r]ecognition by the University grants to a fraternity or sorority chapter
the right to function on campus, to receive University privileges, enroll students as
members and to be associated with the University.” (Emphasis Added) Also,
“[r]ecognition is granted and maintained through a review and approval process
supervised by the office of the Dean of the College.” This review process is set forth in
Part IV of the Relationship Statement.
34. Among the rights granted to recognized Greek-letter organizations in the
Relationship Statement are the rights to free assembly, to operate in a specific building as
a recognized chapter, to participate in rush and select Colgate students as new members
and access to University services and facilities on the same basis as other recognized
groups.
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35. In exchange for these rights, the University receives affiliation with
Greek-letter organizations, which the University acknowledges in the Relationship
Statement “have the capacity to influence in positive ways the quality of student life” and
are a part of the University’s obligation to “provide opportunities for students to learn and
develop outside of the classroom.”
36. PDT Corp., its members and undergraduate brothers have operated under
and relied upon the Relationship Statement since it was originally enacted in 1991.
37. PDT Corp. has at all times from the date of the initial purchase offer made
by the University in February 2004 through the date hereof been in compliance with the
Basic Standards set forth in the Relationship Statement.
38. Pursuant to the review process in place at Colgate, Phi Delta Theta
fraternity has received a two year rating of “Full Recognition with Merit”, which means
the chapter has met all expectations and requirements of the Relationship Statement and
has exceeded the standards of excellence in more than one area.
39. The Relationship Statement is essentially a contract by implication
between Colgate and the Greek-letter organizations, including Phi Delta Theta and its
chapter corporation, PDT Corp.
40. Under the Relationship Statement, the Dean of the College is given the
responsibility for determining a fraternity’s recognition status following an assessment of
the chapter’s “on-going compliance with the Relationship Statement” performed by an
advisory committee, all as set forth in Part IV of the Relationship Statement.
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41. Colgate’s declarations described in paragraphs 20, 21, 22 and 23 hereof
(the “Declarations”) violate PDT Corp.’s express rights of recognition under the
Relationship Statement. In summary, the Declarations provide: (i) that fraternities which
have chosen to retain ownership of their chapter houses will not be allowed to house
students in the fall of 2005 and the University will withdraw recognition of their
undergraduate chapters in the Summer 2005; (ii) that Colgate will only recognize
fraternities and sororities that are residential organizations beginning in the fall of 2005;
and (iii) that any student who participates in an unrecognized fraternity or sorority will be
subject to disciplinary sanctions including, possibly, suspension or expulsion.
42. Furthermore, Colgate’s threat to summarily terminate recognition of
fraternities and sororities that do not comply with its ownership demand violated PDT
Corp.’s due process rights set forth in the review procedures of the Relationship
Statement and the Colgate Student Handbook. Nothing in the Relationship Statement
requires Greek-letter organizations to have chapter houses to maintain recognition and
the University reserved no right to withdraw recognition for failure to sell the University
a chapter house.
43. The University’s implementation of the policy described in the
Declarations breached the terms of the contract contained in the Relationship Statement.
44. The threats by the University contained in the Declarations were coercive
and wrongful in part because they violated the contractual rights of PDT Corp. under the
Relationship Statement.
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45. PDT Corp.’s sole purpose is to operate a chapter of Phi Delta Theta at
Colgate University. The chapter house owned by PDT Corp. has been used as a
fraternity house since it was constructed in 1927. The chapter house is zoned for use
only as a fraternity. In light of the threats made by Colgate, PDT Corp. was left with no
other choice but to enter into the unconscionable, one-sided, oppressive Sale Agreement
and relinquish its property to the University.
FIRST CAUSE OF ACTION
(Economic Duress, Unconscionability, Contract of Adhesion and Rescission)
46. Plaintiffs incorporate herein the allegations set forth in paragraphs 1
through 43 above as if fully restated here.
47. The statements made by Colgate in the Declarations were wrongful
threats, improperly induced PDT Corp. to enter into the Sale Agreement, and deprived
PDT Corp. of its free will because of the superior bargaining position of the University.
The choice given to PDT Corp. by the University coercing it to relinquish its real
property was in fact no choice at all.
48. The Sale Agreement was the product of economic duress by Colgate,
making the Sale Agreement voidable. By threatening to take its members from their
residence at the chapter house, the University was in essence taking from PDT Corp. its
financial wherewithal to survive. Without rent from its resident members, PDT Corp.
could not and cannot exist. By subjecting students who lived at the house to expulsion,
the University gave PDT Corp. absolutely no choice but to sell the house and surrender
its land and premises.
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49. The Court should void the Sale Agreement and order that it be rescinded
as a contract of adhesion based on economic duress, unconscionability, oppression, onesidedness,
unequal bargaining power and patent unfairness of process.
SECOND CAUSE OF ACTION
(Breach of Implied Contract/Public Policy and Rescission)
50. Plaintiff incorporates herein the allegations set forth in paragraphs 1
through 47 above as if fully restated here.
51. The Relationship Statement constitutes an implied contract between
Colgate and the undergraduate student members of Phi Delta Theta, Phi Delta Theta
fraternity and PTD Corp. as representative of Phi Delta Theta fraternity at Colgate
University.
52. PDT Corp. changed its position in reliance on the University’s statements
and actions.
53. PDT Corp. fully performed under this contract.
54. Colgate breached the Relationship Statement by unilaterally, arbitrarily
and capriciously refusing to continue recognizing Phi Delta Theta as a fraternity at
Colgate University unless PDT Corp. sells the PDT Chapter House to the University and
by not following the procedures set forth in the Relationship Statement for withdrawing
recognition of Phi Delta Theta as a fraternity at Colgate University.
55. PDT Corp.’s attempt to use the Phi Delta Theta Chapter House for an
alternative purpose, to-wit: a private eating club, and Colgate’s threats of suspension
and/or expulsion constitute a breach of the Student Rights Code.
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56. Because PDT Corp.’s sole purpose is to operate a chapter house and
chapter organization for undergraduate members of Phi Delta Theta at Colgate
University, the University’s breach of the contracts will irreparably harm PDT Corp.,
which has no adequate remedy at law.
57. The Court should specifically enforce the Relationship Statement and
rescind the Sale Agreement.
THIRD CAUSE OF ACTION
(Injunctive Relief)
58. Plaintiffs incorporate herein the allegations set forth in paragraphs 1
through 55 above as if fully restated here.
59. PDT Corp. will suffer irreparable harm in absence of injunctive relief
ordering rescission of the sale of the PDT chapter house to Colgate and enjoining
Colgate’s violation of the Relationship Statement because without such relief, the
undergraduat e members of the Phi Delta Theta will be forced to contract for housing for
Fall 2005 with the University. This result will destroy PDT Corp.’s ability to contract
with its undergraduate members to provide them housing at the PDT chapter house.
60. Plaintiffs are likely to prevail on the merits of this action.
61. This harm cannot be adequately redressed with money damages.
62. The Court should issue an injunction rescinding the sale of the PDT
Chapter House to Colgate and enjoining Colgate from violating the Relationship
Statement.
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63. There exists an actual, substantial and immediate controversy within the
Court’s jurisdiction, which controversy is the result of Colgate’s conduct and which
controversy can be redressed by a judicial decision in favor of Plaintiffs. Thus, the Court
may properly declare Plaintiffs’ rights in respect to this action.
DEMAND FOR RELIEF
WHEREFORE, Plaintiffs request this Court issue a judgment and order:
A. Rescinding the sale of the PDT Chapter House to Colgate and declaring
the Sale Agreement null and void;
B. Restoring title of the chapter house to PDT Corp. and enjoining Colgate
from violating the Relationship Agreement;
C. Requiring Colgate to abide by the rights given to Greek-letter
organizations under the Relationship Statement and to comply with the
procedures for withdrawing recognition of PDT Corp. as a fraternity at
Colgate University as set forth in the Relationship Statement;
D. Providing Plaintiffs with their attorneys’ fees and disbursements and costs
in this action pursuant to §623(e) of the New York Not-For-Profit Law;
and
E. For such other and further relief to Plaintiffs as the Court may deem just
and proper.
DATED: July 14, 2005
SMITH, SOVIK, KENDRICK & SUGNET, P.C.
By: ________________________________
Kevin E. Hulslander , Esq.
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Attorneys for Plaintiffs
250 South Clinton Street, Suite 600
Syracuse, New York 13202
(315) 474-2911

Students & Alumni for Colgate, Inc.
2707 E. Willamette Lane, Greenwood Village, CO 80121
sa4c@sa4c.com

Phi Delta Theta Alumni Association vs Colgate University filed July 20, 2005

Phi Delta Theta Alumni Association vs Colgate University
filed July 20, 2005