Alumnus Sues Beta Theta Pi Chapter Alumni Board
by Geoff Rushton
Penn State and Beta Theta Pi alumnus has filed a second lawsuit involving the fraternity chapter that Timothy Piazza was pledging when he suffered fatal injuries during a bid-acceptance event in February.
This time, Abbey is suing members of the board of directors for the alumni housing corporation that owns and operates the Beta Theta Pi house at 220 N. Burrowes St. He claims a breach of fiduciary duty for allegedly allowing alcohol use and hazing by active members that led to Piazza’s death, expenses and debt for legal fees and unlawful use of the house after the active chapter was shuttered in the wake of Piazza’s death.
Abbey already has an ongoing suit against the chapter claiming he is owed nearly $10 million he provided for renovations and operations at the fraternity house. He says a funding agreement states the money was to be repaid if the chapter violated Beta’s “men of principle” initiative or ceased to be an active, or if the house was used for a purpose other than housing. The chapter says the money was a gift and its board never signed the funding agreement.
His new lawsuit, filed on Nov. 28, is filed on behalf of all members of the Alpha Upsilon chapter of Beta Theta Pi, which is also a nominal defendant. Named as defendants in the suit are board president William F. Cassidy and directors Kevin R. O’Brien, Eric B. Holmberg, Mark B. Lamm, Marco Dellaria, Park W. Lenhart, George B. Remmey, William J. Torrance, Edward H. Hunt, Garrett J. Vidak, Henry T. Bream.
Henry T. Bream would be Tim Bream, the Penn State football athletic trainer who was the live-in adviser at the fraternity. Bream was present at the house the night of Feb. 2 when fraternity members held the alcohol-fueled pledge event during which Piazza fell multiple times resulting in fatal brain and spleen injuries.
Bream has not been charged with a crime and testified in August that he was in his room sleeping and unaware of the drinking activities that were going on.
Abbey’s new complaint alleges the board members “intentionally and/or recklessly… enabled rampant underage drinking and alcohol-related hazing by the Chapter and its Active Members at the House, which, among other things, resulted in the death of Timothy Piazza.”
Dating back to the early 2000s, the complaint says, the chapter had problems with overconsumption of alcohol, underage drinking and hazing. The chapter was disbanded in the spring of 2009, and the alumni corporation planned to recolonize it with “new, responsible” members and “responsible adults” living in the house to monitor activity. The house also would be alcohol free.
The measures worked for a time, but “In the last few years, the Chapter and its Active Members began returning to their early 2000s ways of excessive alcohol consumption and engaging in alcohol-related hazing activity at the House,” Abbey’s attorney, Matthew Haverstick, wrote in the filing.
Active members sought to do away with the house’s dry status and begin holding sanctioned events involving alcohol, and some board members “championed,” the change, according to the lawsuit.
“Abbey was vocal and unequivocal in his opposition to allowing the consumption of alcohol again at the House, particularly given his substantial financial commitment,” Haverstick wrote, adding that Abbey was then removed from the board of directors in September 2016.
Following Piazza’s death, the Alpha Upsilon chapter was subsequently charged with one count of involuntary manslaughter, 50 counts of hazing, 48 counts of furnishing alcohol to minors and 48 counts of liquor law violations.
To date, the lawsuit claims, the alumni corporation has paid $137,000 in legal fees, and some of that was spent “out of concern that [board president] Cassidy might be charged…
“Upon information and belief, Cassidy directed the Chapter and certain of its Active Members to destroy and/or conceal evidence related to the events of February 2, 2017, including, but not limited to, the deletion of the basement camera footage,” the complaint alleges.
Cassidy has not been charged with any crimes and has not been mentioned in the grand jury presentment that led to initial charges against the chapter and former members, or in the criminal complaints filed in November for new charges.
The new charges arose after that basement video footage was recovered. The video reportedly shows fraternity brothers serving alcohol to Piazza and other pledges. Braxton Becker was charged with tampering with evidence for allegedly deleting the video. A total of 26 former members and the chapter now face a range of charges in the case.
Cassidy breached his fiduciary duties, Abbey says, by causing the alumni corporation “to expend substantial funds and incur substantial debt to protect his own personal rights and interests in ongoing criminal investigations, thereby wasting corporate assets.”
Other board members did the same by authorizing the funds to be spent on Cassidy’s behalf, according to the filing.
They also breached their duties by “knowingly and intentionally” allowing members to hold events involving alcohol at the house “despite Abbey’s repeated objections,” and by not enforcing policies to prevent alcohol-related hazing that led to Piazza’s death, Haverstick wrote.
“The Board Members were on notice and aware that recently the Chapter and its Active Members were again engaging in alcohol related hazing activities at the House,” Haverstick wrote.
The alumni corporation is likely to be subject to one or more civil suits resulting from Piazza’s death and alleged hazing, Abbey says.
Another of Abbey’s claims is that the board is breaching its fiduciary duty by providing accommodations, include food and alcohol, to chapter alumni and their guests for a fee at the house on weekends. The house has received multiple citations from Centre Region Code Administration for changing the use of the property without the required permits. Abbey says in this lawsuit and his breach of contract lawsuit that the use of the house is incurring fines for code violations and violating liquor laws by selling beer and wine, all of which could jeopardize the chapter’s only significant asset. The alumni corporation says it’s not selling alcohol and is not at risk for liquor law violations.
Abbey alleges that Frederick H. Johnson, who is also named as a defendant and is a member but not a director of the alumni corporation, “paid for and arranged changes to the House to better suit its new unlawful use,” handled day-to-day operations for the new use, solicited chapter alumni “to support the House’s new unlawful use,” and paid for alcohol that Abbey purports is being sold.
A Centre County judge recently ruled against Abbey’s motion for an injunction to stop the alumni corporation from renting accommodations in the house.
Taken together, Abbey says, the board members’ breaches in fiduciary duties before and after Piazza’s death resulted in the chapter’s loss of recognition by Penn State and the national Beta Theta Pi and triggered repayment obligations for the millions of dollars he claims he is owed for renovations.
Abbey is seeking to have board members pay restitution to the alumni corporation and reimbursement of his own legal expenses. He also wants an accounting of all money received and disbursed by the alumni corporation since 2009 and access to its books and records.