by Geoff Rushton
A Centre County judge has denied Donald Abbey’s motion for a summary judgment in his lawsuit against the Alpha Upsilon Chapter of Beta Theta Pi over what he says was a multi-million dollar loan for improvements to the fraternity house.
Judge Katie Oliver wrote that “very little discovery has been undertaken” in the case and that the motion was premature.
Abbey filed a breach of contract lawsuit against the fraternity chapter’s alumni house corporation after the chapter’s recognition was revoked by Penn State following the death of pledge Timothy Piazza, a 19-year-old sophomore who died after falls at an alcohol-fueled bid acceptance event at the fraternity house in February.
A 1970 Penn State graduate and alumnus of the Beta chapter, Abbey says he’s owed $8.5 million over more than a decade for repairs, renovations and operations for the house at 220 N. Burrowes St.
An agreement states that if the chapter violated Beta Theta Pi’s “Men of Principle” initiative or ceased “to be a chapter of the general fraternity and the [property]is utilized for a purpose other than Alpha Upsilon of Beta Theta Pi unless agreed to by Abbey,” the fraternity would have to repay the money, according to court filings.
After Penn State permanently revoked recognition, the national Beta Theta Pi disbanded the chapter and former members were evicted from the house in March. It had been unused since then, until the beginning of September when the alumni corporation opened it up for alumni to stay in during home football weekends.
Attorneys for the Alpha Upsilon Chapter, however, say that Abbey made an initial $500,000 gift for renovations to the house and then took control of the project, acting unilaterally to spend millions without approval from the board.
They claim Abbey exerted undue influence on the board and the agreement was signed by the board president after Abbey had spent the money and without approval by the full board. The chapter says it has little accounting for the money spent by Abbey and that he is trying to convert an irrevocable gift into a conditional gift.
That agreement stipulates that if the chapter was unable to repay, a lien would be placed on the house. Because the chapter’s only significant asset is the house, Alpha Upsilon attorneys said the lawsuit is “in essence for ownership and control of the house.”
In her denial of Abbey’s motion, Oliver said has not met the plaintiff’s burden for a summary judgment and that “the factual record remains undeveloped.”
“The existing record reveals multiple genuine issues of material fact that preclude summary judgment, including factual issues potentially relevant to whether a valid and enforceable contract exists, and, if so, whether that contract has been breached and the amount of any resulting damages,” Oliver wrote.