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HARRIS v. HOWARD UNIV.

October 13, 1998

CASPA L. HARRIS, JR., Plaintiff,
v.
HOWARD University, INC. d/b/a HOWARD University, Defendant.



The opinion of the court was delivered by: LAMBERTH

MEMORANDUM OPINION

 This case involves a claim for indemnification by plaintiff Caspa L. Harris, Jr., against his former employer, defendant Howard University, for:

 (1) the costs of defending claims against Harris by the Federal Deposit Insurance Corporation (FDIC) in its capacity as receiver for Madison National Bank; for the legal fees incurred by Harris in responding to a 1993 investigation by the Office of the Comptroller of Currency (OCC), and for legal fees incurred in seeking indemnification from Howard University;

 (2) $ 80,000 that Harris paid in settlement of certain of the FDIC claims; and

 (3) compensatory and punitive damages against Howard University on the ground that Howard's refusal to indemnify him was in bad faith.

 The court conducted a bench trial in May 1998. The court now states its findings of fact and conclusions of law.

 I. BACKGROUND

 The FDIC's claims against Harris, as well as the OCC investigation, arose out of the alleged acts and omissions of Harris as a director of United National Bank (UNB) of Washington, D.C. The details of Harris's service on the UNB Board, and of the challenged activities, will be discussed in greater detail later.

 During certain periods relevant to this case, the Bylaws of the Howard University Board of Trustees required the University to indemnify and "provide counsel" to an officer or managing agent of the University against claims arising out of service by that individual as a director of another corporation if he served on that other corporation's Board at the "request" of the University. However, the Bylaws only extended indemnification under those circumstances "to the extent permitted by law," and only if the officer or managing agent "acted in good faith for a purpose which [he] reasonably believed to be in the best interest" of the University.

 Harris claims that, in his capacity as Vice President for Business and Fiscal Affairs and Treasurer of Howard University, and later as a managing agent of the University, he served on UNB at the request of the University's president, Dr. James Cheek, to represent the University's interests as a major depositor and stockholder in UNB, and to implement the University's policy of supporting banks in the minority community. The University's position is that Harris did not serve on the UNB Board at the request of the University, and was not an officer or managing agent of Howard University after June 30, 1987. The University also argues that Harris does not qualify for indemnification because he failed to satisfy the standard of care required by the Bylaws.

 In March 1991, UNB was forced by the OCC to merge into Madison National Bank (MNB), an affiliate of UNB under the common ownership of James Madison Limited (JML). On May 10, 1991, the OCC declared MNB insolvent and appointed the FDIC as receiver.

 In January 1993, the OCC wrote to Harris indicating that it was considering assessing civil money penalties against him for purported regulatory violations by UNB in 1990. After Harris responded, the OCC decided in September 1993 not to proceed against him. Harris never informed the University of the OCC investigation until Harris commenced this suit and made demand for indemnification for his legal fees incurred in successfully resolving the OCC matter. The University subsequently declined to indemnify Harris for any legal expenses incurred in responding to the OCC investigation. See Joint Pretrial Statement at 3.

 In April 1994, the FDIC threatened claims against Harris arising from performance of his duties as a director of UNB. The FDIC's threatened claims arose from: (1) losses incurred on eighteen loan participations purchased by UNB, primarily from MNB (Loan Participation Claims), and (2) losses incurred by UNB in 1986 and early 1987 in connection with an indirect automobile loan program conducted through APA Leasing & Sales, Inc. (APA Leasing Claim).

 Harris sought indemnification from the University relating to the FDIC's threatened claims. The University declined to indemnify Harris for the FDIC claims and related costs of defense. On December 19, 1995, Harris entered into an agreement with the FDIC whereby Harris admitted no wrongdoing but agreed to pay the FDIC $ 80,000 in settlement of the claims involving the Loan Participation Claims. The FDIC and Harris agreed to a tolling of the statute of limitations on the FDIC's remaining APA Leasing Claim.

 The University declined to indemnify Harris because it contends that (1) Harris was not requested by the University to serve on the UNB Board during any relevant periods; (2) Harris was not an officer, employee, or other managing agent of the University after June 30, 1987, and is not entitled to indemnification for claims arising in whole or in part from events after that date; and (3) Harris did not act as a UNB director in "good faith" for a "purpose" that he "reasonably" believed to be in the University's "best interest."

 Harris claims that the University acted in bad faith by refusing to honor its obligations to defend and indemnify him, because the University had dropped errors-and-omissions insurance coverage for officers and managing agents otherwise indemnified under the Bylaws for serving as directors of for-profit corporations.

 Plaintiff seeks (1) a judgment awarding damages of $ 80,000, plus the costs of his defense to date in connection with the OCC investigation, the FDIC Loan Participation Claims, and the APA Leasing Claim; (2) a declaratory judgment that, with respect to the APA Leasing Claim, the University is obligated to indemnify him for future costs of defense, including reasonable attorney's fees; and (3) his attorney's fees and costs incurred in seeking to enforce the University's indemnification obligation. Plaintiff also seeks to recover compensatory and punitive damages arising from the defendant's alleged tortious breach of the duty of good faith and fair dealing, with respect to the University's obligation to defend and indemnify.

 II. THE INDEMNIFICATION CLAIM

 A. Was Harris Covered Under the Terms of the Bylaws?

 1. Background Concerning Caspa Harris's Service on the United National Bank Board of Directors

 Howard University is a federally chartered, private, nonprofit university located within the District of Columbia. Harris was employed by Howard from July 1, 1962 until June 30, 1987. From July 1, 1971 until the date of his retirement, he served as Vice President for Business and Fiscal Affairs, and also as Treasurer. After leaving Howard, Harris served as Executive Vice President, and then President, of the National Association of College and University Business Officers. He ended his employment with the latter organization in 1995.

 In 1971, James Cheek, president of Howard University during most of the period relevant to this case, was contacted by officials of the Nixon Administration, who indicated that as part of President Nixon's policy of assisting minority-controlled banks, Howard University should seek one or more local financial institutions in which to deposit funds. On September 17, 1971, Howard's Board of Trustees authorized the use of United National Bank, one of the District of Columbia's two minority-controlled banks, as a depository bank for Howard University funds, and approved the location of a UNB branch on the Howard campus.

 On or about October 13, 1971, both Cheek and Harris were elected to the UNB Board. However, Cheek withdrew from the Board shortly thereafter because he was already a director of another national bank. It is stipulated that Harris accepted the UNB position in 1971 without obtaining any prior written approval from the Howard University Board of Trustees, and that, in 1971, Cheek did not make any written communication to Harris requesting that Harris serve on UNB's Board as a Howard representative. (Stips. 17, 18.)

 The banking relationship between Howard and UNB quickly became controversial. On April 28, 1973, the Howard Board of Trustees had a "lengthy and detailed discussion" concerning "the question of possible conflict of interest." (Stip. 20.) This debate within the Howard University Board occurred shortly after the filing of a class-action lawsuit alleging that Sibley Hospital trustees had invested hospital funds at unfavorable terms at the banks where they were employed as banking executives. See Stern v. Lucy Webb Hayes Nat'l Training Sch., 367 F. Supp. 536, 537 (D.D.C. 1973). Harris thereafter submitted his resignation to UNB by letter (on personal letterhead) dated March 13, 1974. (Ex. 254.) In that letter, he stated that his resignation was "due to recent court actions concerning possible conflict of interest or appearance of conflict of interest." Harris did attend two UNB Board of Director's meetings after his resignation: one on May 14, 1974, and one on July 17, 1974. (Stip. 22.)

 The waters become somewhat murkier at this point, as the circumstances culminating in Harris's rejoining the UNB Board present a central dispute in this litigation. What is certain is that on July 1, 1975, Harris wrote to Cheek (on University letterhead), advising him that he had been officially offered a director's seat on the UNB Board effective July 1, 1975. (Stip. 24.) The letter asked Cheek to sign the memorandum, which he did, by stamp. (Stip. 24.) On September 22, 1975, the Budget and Finance Committee of the Howard Board of Trustees recommended that Harris be permitted to accept the appointment with UNB. The full Board of Trustees approved that recommendation five days later. Harris rejoined the UNB Board sometime between September 27, 1975 and October 15, 1975. He served on the board continuously until he resigned sometime on or before September 27, 1990. It is stipulated that the only formal action ever taken by the Howard Board of Trustees respecting Harris's service on the UNB Board was the action in September 1975, and that, prior to 1975, the Howard Board (apart from any action by Cheek) never formally requested that Harris serve on the UNB Board. (Stip. 29.)

 2. The University Bylaws

 Harris's claim for indemnity rests primarily upon Article VII, Section 3 of the University's Bylaws, as in effect before September 1988. The Bylaws state, in relevant part:

 
To the extent permitted by law:
 
This corporation shall provide counsel and indemnify any . . . Vice President . . . [or] other managing agents . . . acting consequent to University duties . . . made or threatened to be made a party to an action or proceeding . . . including an action by or in the right of any other corporation of any type of kind, domestic or foreign, which any of the above named persons served in any capacity at the request of this corporation, by reason of the fact that such person . . . was a director or officer, or managing employee, of this corporation, or served such other corporation in any capacity, against judgment, fines, amounts paid in settlement and reasonable expenses, if such person acted in good faith for a purpose which such person reasonably believed to be in the best interest of this corporation . . .

 (Ex. 315 at 21.) In September 1988, the Bylaws' indemnification provision was changed to permit indemnification of a director of a corporation only where the threatened or actual claims arise "by reason of" the director's affiliation with the University. (Ex. 17 at 8.) As explained in greater detail at Part II.4.b, infra, the revisions to the indemnification policy are not relevant to this matter because they took place after Harris left his position as Vice President of the University.

 In order to obtain indemnification, Harris bears the burden of proving by a preponderance of the evidence that the requirements of the Bylaws are satisfied. Cf. Rivers & Bryan, Inc. v. HBE Corp., 628 A.2d 631 (D.C. App. 1993).

 3. The University Did Not Admit Liability

 Plaintiff argues that the starting point (and, presumably, the ending point) for determining whether indemnification is warranted is that Howard University supposedly "admitted" that Harris qualified for indemnity for the FDIC claims. This alleged "admission" comes from John L. Procope, a trustee and member of the Howard Executive Committee, who apparently told President Cheek in June 1994 that the University would have covered these claims if it had not dropped its directors' and officers' (D & O) insurance coverage in 1987. (Cheek Direct.) Procope's purported "expertise" on this topic was that he was in the business of providing D & O insurance, and that he had in fact provided the D & O insurance for the University before the University decided to change its coverage. More important, plaintiff claims, is that Procope had participated in the May 17, 1994 Executive Committee discussions concerning the indemnification claim.

 The court attaches no special significance to the alleged "admission." First, plaintiff has offered no corroboration of Cheek's testimony concerning Procope's statement. Corroboration is particularly critical because Cheek is also facing an FDIC action subject to possible University indemnification, and consequently he is hardly disinterested in relaying this statement. Second, the court has no understanding as to how Procope reached his conclusion that Harris qualified for indemnification: i.e., did Procope carefully review the details of the APA Leasing Claim, the Loan Participation Claims, or, most critically, even consider the meaning of the term "managing agent"? Third, there is no reference to this alleged "devastating admission" in any of the extensive communications made by the attorneys for Harris and Cheek to the University, (Exs. 211, 213, 219-20), or in the amended complaint, (Ex. 250), or in any other relevant document in the record. Nor was it referenced by Cheek in his own communications with Procope. (Ex. 369.) If the admission were truly significant, one would expect plaintiff to have made reference to it sometime before trial. Finally, the statement was made to Cheek, about "your claim," creating at least some ambiguity as to whether that statement would extend to Harris as well, since the two joined the UNB Board at different times and under different circumstances.

 However, the main reason that Procope's alleged statement is not a "silver bullet" as to indemnification has little to do with its accuracy, or the basis upon which Procope reached his conclusion. The primary reason that the court need attach no special significance to Procope's alleged statement is that it does not constitute an admission of Howard University. The isolated statement of one director of a corporation is not a binding admission of the corporation. "Curbstone admissions or declarations of an individual director have not the effect of binding the corporation in the absence of evidence that authority to make the declarations were duly conferred. If this were not true, then one director's declaration could commit the corporation to a particular course of conduct in defiance of the will of the board." 2A Fletcher Cyclopedia of Corporations § 741, at 464 (1992 rev. ed). There is no evidence of any authority conferred upon Procope by Howard University to bind the corporation as to D & O indemnification. Therefore, there is neither a factual nor a legal basis upon which this court may conclude that Procope "admitted" University liability through his uncorroborated statement.

 4. Was Harris's Service on the UNB Board After 1975 "at the Request" of the University, and in His Official Capacity?

 Pursuant to the Bylaws, indemnification for claims relating to service on another entity's Board is only available if the person served the other entity "at the request of the corporation." (Ex. 315 at 21.) Howard's first defense is that Harris is not entitled to indemnification because the University never requested that he serve on the UNB Board.

 Harris contends that his service on the UNB Board both before March 1974 and from 1975 to September 1990 was at the request of the University corporation, in his official capacity as Treasurer of Howard University. Harris claims that the request was made by President Cheek, and that the Board was fully aware of the nature of his service.

 Cheek testified unequivocally that he did ask Harris to serve on the UNB Board when the Howard-UNB relationship was initiated in 1971. (Cheek Direct.) As discussed previously, Harris assumed his seat in 1972 and resigned of his own initiative in March 1974 out of concerns arising from the Sibley Hospital case. (Harris Direct.) Then, in approximately June 1975, Cheek allegedly indicated to Harris that he wanted Harris on the UNB Board to represent Howard's interests. (Harris Direct.) On July 1, 1975, Harris wrote a brief memo to Cheek, seeking approval of UNB's offer to rejoin the Board. (Ex. 49.) Cheek signed the memo by stamp.

 The issue of Harris's return to the UNB Board was considered at length at the trustees' Budget and Finance Committee meeting on September 22, 1975. The minutes from the meeting state:

 
The Committee was also informed that the United National Bank of Washington, D.C. has offered a seat on its Board of Directors to Dr. Caspa L. Harris, Treasurer, Howard University. The Committee discussed in detail the offer and recommends that Dr. Harris be permitted to accept the appointment after consultation with the General Counsel.

 (Ex. 29.) Five days later, the full Board approved this recommendation of the Budget and Finance Committee, "endorsing [Harris's] acceptance of an invitation to" serve on the UNB Board. (Ex. 28 at A-7.)

 The point of dispute between the parties is whether this permission was granted so that Harris could serve in an individual/personal capacity, or whether his service was at the request of the University and in his capacity as Treasurer/CFO at Howard University. If the latter were true, then Harris would be entitled to indemnity under the Bylaws.

 a. Plaintiff's Evidence that the Service Was At the Request of the University, and in His Official Capacity

 The first item of evidence offered by plaintiff is the Report of the Budget and Finance Committee. In recommending that Harris be permitted to accept the seat, it refers to him as "Treasurer, Howard University." (Ex. 29.) Also, the endorsement of the full Board referred to "Dr. Caspa L. Harris, Jr., Treasurer." (Ex. 28.) Plaintiff contends that the inclusion of the official title demonstrates that the service was to be in his official capacity.

 Second, Harris offered a great deal of deposition and trial testimony from Howard trustees and officers indicating that it was their belief that Harris was serving in his official capacity, in order to safeguard University interests. This testimony, of course, must be read through the filter of one of the stipulations in this case: that "there is no evidence from any HU Trustee that he or she ever heard Dr. Cheek request Harris to serve on the UNB Board." (Stip 30.) The court will summarize this testimony briefly, though it will not consider any testimony that contradicts that stipulation. See, e.g., Plaintiff's Proposed Findings of Fact at 74 ("Moreover, during Cheek's own discussions with Woods, Cheek indicated to Woods that he had asked Harris to serve on UNB's Board because he himself could not."); id. (discussing Cheek's conversations with Dr. Collins).

 Cheek is in many respects Harris's key witness, because, if there was any authorization, it came from him. Cheek testified that he did request that Harris serve on the UNB Board, in his official capacity as Treasurer and VP, when the UNB-Howard relationship was first initiated, (Cheek Direct), although there was no writing memorializing this. Cheek also signed (by stamp) Harris's July 1, 1975 letter expressing his wish and desire to "rejoin" the UNB Board. However, Cheek had no specific recollection that in the 1974-75 period he actually asked Harris to rejoin the Board, a point that the court will return to in its consideration of defendant's evidence. Cheek claims that, in his mind, Harris's service on the UNB Board was continuous, so there was no need to "request" him to rejoin. Also, Cheek's memory of events in 1974-75 is cloudy because of family matters.

 Dr. William Collins was President of UNB and a member of the Howard Board. There is little question that Collins wanted Harris to return to the UNB Board, (Collins Dep. at 19) (noting that Collins wanted to secure Howard's banking business), and "invited" him to do so. Collins testified at his deposition that he understood that Harris was serving in his capacity as Treasurer and CFO of the University and that this was common knowledge among members of the Howard Board. (Collins Dep. at 24, 41.) He added that, in his opinion, most clear-thinking members of the UNB Board wanted Harris on the Board. *fn1" (Id. at 31.)

 Dr. Carl Anderson was a Howard Vice President. He testified at trial that it was his understanding that Harris preferred to not rejoin the UNB Board because of the considerable conflict-of-interest criticism to which he was subjected, as well as liability concerns, and that Harris had voiced his reluctance a number of times to Anderson. He also stated that it was generally understood that Harris served on the UNB Board to safeguard the University's interests, and that the Board was pleased to have one of its Vice Presidents looking out for Howard's interests. He also testified that he was not aware that Harris was serving for personal reasons, or for "public service." (Anderson Direct.)

 Owen Nichols was the Secretary to the Board of Trustees, and he testified that it was common knowledge that Harris was serving as a Howard representative and in his official capacity as Treasurer in his UNB service. Nichols stated that the Board approved Harris's service because of his position, and also testified that Harris was on the board because of the University's deposits, and that it would be in the best interest of the school to have Harris on the Bank Board.

 Dr. Geraldine Woods was a trustee at Howard dating back to 1968, and chair of the Board from 1975 to 1988. She testified at her deposition that she was fully aware that Harris was serving on UNB's Board at the request of Howard University because Harris had told her so on at least two occasions. (Woods Dep. 5-6; 24-25; 28; 31-32.) Woods also understood that Harris was serving on UNB's Board in his capacity as Chief Financial Officer. (Id. 6-7, 8-9.) Woods even testified that she thought this service was a good idea. (Id. at 7.)

 Roger Estep, another Howard VP, testified that it was his understanding that Harris served on the Board in order to safeguard and protect Howard's interests, and that both the cabinet and the trustees had general knowledge that Harris was serving as a Howard representative. To the best of Estep's understanding, Harris was not serving on the UNB Board as a personal business venture or as a public service. (Estep Direct & Re-Direct.)

 Finally, there is the testimony of Harris himself. He testified that Cheek had indicated to him that the 1971 directive requesting that he serve on the UNB Board was still in effect in 1975. He also claimed that the reference to "previous discussions concerning my membership" in his July 1, 1975 letter refers to discussions with Cheek during which Cheek asked him to rejoin the UNB Board. Also, Harris testified quite vehemently that he preferred to not rejoin the UNB Board in 1975 on the basis of all the controversy surrounding the relationship, and also that his duties as VP were time-consuming enough.

 b. Defendant's Evidence that Harris's UNB Service Was in His Individual Capacity

 At the outset, defendant notes that it is undisputed and stipulated that the Howard University Board never voted to request that Harris serve on the UNB Board for the benefit of the University. (Stip. 28.) The Howard Board "permitted" him to serve on the UNB Board. The defendant claims that the choice of the word "permission" in the minutes -- the official record of Board actions -- clearly demonstrates that the University was allowing one of its officers to engage in an outside activity. Had the service been "at the request" of the University, the Board minutes would have used those words or similar language.

 Second, defendant notes that there is not a single writing from 1972 until 1990 containing any reference to the fact that Harris was serving at the request of Howard University (or of Cheek) and in an official capacity. There is no reference to this "request" in several documents in which one might expect to find it, including, inter alia : the Howard Board minutes; correspondence electing Cheek and Harris to the UNB Board in 1971, (Ex. 6); correspondence in which Harris resigned from the UNB Board in 1974, (Ex. 254); Harris's 1975 memorandum advising Cheek of Harris's "wish and desire" *fn2" to join the UNB Board, (Ex. 49); Harris's retirement letter from Howard, (Ex. 64); the annual reports of HU auditors which disclosed that several HU officers or trustees served as directors of financial institutions, (Exs. 13, 15, 19), but that did not disclose any special role that Harris played; Harris's personnel file, which did not distinguish between his UNB Board service and other memberships, such as the Red Cross, (Ex. 263); UNB's or JML's annual reports or proxy statements, (Exs. 121, 294); UNB's Board minutes, (Exs. 354-59); any annual disclaimer statement filed by Harris with UNB concerning conflicts of interest, (Ex. 117 at 5; Ex. 246 at 219); or Harris's letter resigning from the UNB Board, (Ex. 304). In fact, of the hundreds of trial exhibits and thousands of documents produced for this litigation, not one mentions a request to serve. This absence of a writing is especially significant when contrasted with Harris's testimony that he "always put things in writing." (Harris Direct & Cross.)

 The University also points to the fact that Harris personally retained most of the director's fees that he received from UNB as proof that his service was a personal enterprise. For example, in 1985, UNB paid Harris $ 6,000 in director's fees, but he donated only $ 125 of that total to Howard University. (Stips. 75-76; see also Stip. 78 (noting that Harris believed that he had no obligation to turn over any director's fees to Howard University).) Defendant claims that his retention of director's fees suggests that Harris did not view his service on the UNB Board as part of his University responsibilities, because the proper source of compensation for professional duties would be his salary and benefits package. Defendant also notes Harris's testimony that he normally would not accept anything of value from a firm doing business with him in his capacity as Howard's vice president. (Harris Cross.)

 Third, Howard claims that Harris's position cannot be reconciled with Board concerns about liability. In light of the fact that Harris's service on the UNB Board would expose the University to considerable indemnity liability, one would expect the precise nature of his service to have been carefully reviewed by the Board, and that the Board would have been explicit in any resolution. The absence of any explicit Board authorization is all the more notable because, at the time of the alleged "request," the Howard Board was acutely aware of conflict of interest problems and taking steps to police relationships with UNB. Because of the Sibley Hospital case, and the vociferous opposition to any official role in UNB by persons like Dr. Watts, the University (and Harris) would have every reason to be explicit about the nature of Harris's service. *fn3"

 Fourth, defendant contends that the trial and deposition testimony fail to support Harris's claim that he was serving at the request of the University or in his capacity as Vice President of the University. If anything, the testimony sustains the opposite conclusion. The court will review the salient parts of the testimony briefly.

 Defendant places considerable emphasis on the testimony of plaintiff's key witness, Dr. Cheek, because Harris's argument rests in large part upon what Cheek told him and allegedly told other Howard officers and trustees. While Cheek had no doubt that he had requested that Harris serve on the UNB Board in his official capacity back in 1971, he had no recollection at trial of asking him to rejoin in 1975. Nor could Cheek identify a single trustee he told of this request. (Cheek Exam; Cheek Cross; Cheek Dep. at 170.) Cheek also admitted in his deposition that the fact that Harris was permitted to go on the Board did not necessarily mean that he was serving as a University representative. (Cheek Dep. at 157.)

 Defendant goes on to dismiss the testimony of Drs. Nichols, Estep, and Anderson, noting that, whatever they personally may have thought about Harris's service, they all lacked any direct knowledge supporting Harris's basic contention, that Cheek had requested that he serve on the UNB Board.

 Howard next points to the trial testimony of Carl Klemme, an HU trustee from 1975 to 1991. While Klemme could not specifically recall the September 22, 1975 meeting of the Howard budget committee meeting at which Harris's rejoining the UNB Board was discussed, he testified that he had no recollection of hearing from Harris or from Cheek that Harris was serving at Cheek's request. (Klemme Direct.) On the other hand, he had never heard that the service was for Harris's personal or public service interests. (Klemme Cross.) He also noted that each year, when the bank relationships were re-approved, Harris would disclose that he was serving as a director of UNB, but would never state that he was doing so at the request of the University. (Klemme Direct.)

 John Dellenback was a trustee from 1975 to 1992, and also served on the UNB Board. He testified by deposition that the Howard Board did not request that Harris serve on the UNB Board, stating that "it was neither prescribed nor proscribed in the sense that what he was doing was perfectly in order, but on the other hand, this was not part of the jot and tiddle of what he was expected to do." (Dellenback Dep. at 27.) Furthermore, Dellenback had no recollection of express statements by Harris that he was the University's representative on the UNB Board. (Id. at 21.)

 Dr. Charles D. Watts, a trustee from 1973 to 1991, was one of the most vocal critics of Harris's service on the UNB Board. Watts raised issues concerning conflicts of interest with Cheek, and at that time Cheek did not state that Harris's service was pursuant to his request. (Watts Dep. at 67.) Also, Watts had no knowledge that the Howard Board ever requested that Harris serve on the UNB's Board to safeguard the University's interest, nor did he ever see any evidence in that regard. (Watts Dep. at 17, 36.)

 Carlton Alexis was Howard's Vice President for Health Affairs from 1969-87, and became interim President of Howard after Cheek's resignation. He attended over 100 meetings of the Howard cabinet and had no knowledge of the trustees requesting that Harris serve on the UNB Board, (Alexis Dep. at 35), or of Harris ever saying that he had been requested to serve by the University, (id. at 11, 35), or of Cheek making such a request, (id. at 9.)

 Defendant also points to the testimony of Dr. Woods as supporting its characterization of Harris's service rather than Harris's. Defendant notes that Woods was never told by Cheek that he had requested that Harris serve on the UNB Board, (Woods Dep. at 21-22), nor was she ever aware of the Board being told that Cheek has requested that Harris serve, (Woods Dep. at 69.) Woods does not recall the Board's consideration of the issue in 1975, but she did state that she would have expected Cheek to inform the Board if he requested that Harris serve in an official capacity. (Woods Dep. at 35-36, 39-40.) Also, Woods believed that any request by Cheek mentioned at the meeting should have been included in the minutes, which were usually very good. (Woods Dep. at 57-58.)

 c. Conclusion

 Suffice it to say that, after the extensive trial testimony, depositions, documentary evidence, and analysis of the foregoing contained within the proposed findings of fact and conclusions of law, this question of Harris's service on the UNB Board remains an extremely close one (which itself is of considerable import, because it affects Harris's claim of a "bad faith denial" of indemnification, see infra). The absence of any trustee who could affirmatively state that the Board requested this service, or that he or she ever heard Cheek make any reference to his "request," is damaging to plaintiff's claim. On the other hand, the University was unable to point to one piece of evidence that definitively proves that the service was ...


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