Académique Documents
Professionnel Documents
Culture Documents
905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
DAVID J. GOSSTOLA
Plaintiff,
v. SUMMONS
Index No.:
.
Defendant.
You are hereby summoned to answer the Verified Complaint in this action, and to serve
a copy of your answer or, if the Verified Complaint is not served with this Summons, to
serve a notice of appearance, on the plaintiff's attorney, within twenty (20) days after
service of this Summons, exclusive of the day of service, where service is made by
delivery upon you personally within the state, or within thirty (30) days after completion
of service where service is made in any other nf:mner. In case of your failure to appear or
answer, judgment will be taken against you by default for the relief demanded in the
Verified Complaint.
D d 201
To the above named Defendant: The nature of the action is set forth in the annexed
Verified Complaint.
. .
a
. .
Filed in Albany County Clerk's Office 08/09/2019 03:20:30 PM 1 of 18 Index # 905126-19 Clerk: KT
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
DAVID J. GOSSTOLA
Plaintiff,
v. Verified Complaint .
Defendant.
David J. Gosstola, "Plaintiff", by his attorney, Law Offices of Daniel M. Sleasman, states the
following as and for a Comraint against Defendant State Employees Federal Credit Union
("SEFCU").
2. SEFCU is a federal credit union with its priñcipal office in Albany County, State
of New York.
3. At all times relevant to this action, Plaintiff is and has been a member of SEFCU.
4. At all times relevant to this action, Plaintiff has been a certified public accouñtañt.
6. Plaintiff was appointed as the Chief Financial Officer ("CFO") of SEFCU in 2008
7. At all times relevant to this action, as Chief Financial Officer of SEFCU, Plaintiff
SEFCU. ("Mr. Castellana") and was intended to report to the SEFCU board of
2 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
acquire and in fact did acquire direct and personal knowledge of facts including
9. At all times relevant herein, Mr. Castenana was a corporate officer of SEFCU
10. SEFCU has been formed and organized as a member owned, democratically
with the specified mission of meeting the credit and savings needs of consumers,
11. As a not for profit corporation and a tax exempt organization, SEFCU members
are intended by operation of law and public policy, and its executive officers are
SEFCU members with the financial benefit of efficient management and prudent
members'
and prudcat use of assets including but not limited to executive
12. Such financial controls and standards are intended by law to benefit SEFCU
making available favorable and more affordable loan terms to its members.
13. Upon information and belief, SEFCU currently has approximately $3.9 billion in
3 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
14. Upon information and belief, SEFCU currently has approximately 369,000
members, many of whom are employees of the State of New York and other
governmental state and local agencies, with its operations concentrated and
15. SEFCU is operated pursuant and subject to the Federal Credit Union Act 12 USC
1751 et. seq. (the "Act") and applicable regüIations, administered by the National
16. The Act provides that a SEFCU, as a Federal credit union, is to be managed by a
17. At all times relevant, SEFCU has had a duly elected board of directors and
Supervisory Committee.
directors from among SEFCU members and along with the SEFCU board of
19. The board of directors, not the ClÎief Executive Officer or any other officer, has
executive management, for general direction and control of SEFCU's affairs, and
principles of law and its by-laws and for the sole benefit of its members.
20. The Act prohibits payment of compensation to the SEFCU directors with the
exception of one board officer, and reimbursement for reasonable and necessary
4 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
21. NCUA Regulation §701.4 provides, among other things, that the SEFCU board of
control"
directors "is responsible for the general direction and of SEFCU, and
familiarity"
required to have at least "a working with basic finance and anemm+ing
management and auditors and must direct the operations of SEFCU "In conformity
with the Federal Credit Union Act, NCUA's Rules and Regulations other
applicable laws such as the Not For Profit Corporation Law of the State of New
22. The officers and directors of SEFCU have a fiduciary duty of loyalty to SEFCU
members, and statutory duties to all of its members, including those as set forth in
the Act and the Not for Profit Corporation Law of the State of New York.
23. The primary purpose of SEFCU, as a federally insured credit union, is to provide
quality, low cost fiancial services that its members need. The SEFCU board of
directors is required, as a not for profit organization, to focus on the best interests
of membership as a whole, and not to serve the best finaselal or other personal
business.
24. NCUA §701.4 (a) also provides that the ultimate responsibility of the SEFCU
board of directors for direction and control is not delegable to executive managers
25. During his employment by SEFCU Plaintiff was provided with and has relied upon
Description"
a written "Job for the position of Chief Financial Officer, which
5 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
A •
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
26. In accordance with Plaintiff's "Job Description", Plaintiff was at all times
direction"
responsible for "providing finsacial to the credit union and for reporting
to the Chief Executive Officer (i.e. Mr. Castellana) and to the board of directors,
and advising the CEO and the board of directors regarding current and projected
direct and control fiscal management operations to ensure compliance with Federal
regulations and other applicable law, and ensure that all activities meet generally
27. At all times relevant to this action, SEFCU had in effect "SEFCU Reporting,
Conduct"
Fraudulent or Dishonest (Whistleblower Policy) Policy No. 715
28. At or about the time that Plaintiff became employed by SEFCU as its Chief
Policy.
29. At all times, Plaintiff relied upon the SEFCU Whistleblower Policy, and the
30. Among other things, the SEFCU Whistleblower Policy states: "SEFCU expects all
staff and voluntccrs to conduct all Credit Union related business at the highest
6 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
law".
31. The SEFCU Whistleblower Policy further states that "SEFCU employees are
32. The SEFCU Whistleblower Policy required Plaintiff, subject to punishment for
this policy may result in disciplinary action against the manager or supervisor, up
employment."
to and including termination of
Retaliation"
employee, a guarantee in the explicit fonn of "Protection Against
stating that "Employees may not retaliate against an employee filing a complaint
under this policy with the intent or effect of adversely affecting the terms or
conditions of employment....".
34. At all times relevant herein, Mr. Castellana, as a SEFCU employee, the board of
directors and the Supervisory Committee were all required to comply with the
35. At all times relevant herein, Mr. Castellana, the board of directors and the
Supervisory Committee had a legal duty to Plaintiff and all other SEFCU
employees to apply the SEFCU Whistleblower Policy and otherwise to act in a fair
manner, in good faith and in conformity with applicable agreements and applicable
7 of 18
. . . INDEX NO. 905126-19
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
.
36. At all times relevant herein, the SEFCU Whistleblower Policy was and is an
agreement between SEFCU and all of its employees, including Plaintiff, and while
SEFCU.
Whistleblower Policy.
38. During the course of Plaintiff's employmcñt as CFO, Plaintiff became aware of
facts and events that led Plaintiff to a good faith and reasoñable fact based belief
that Mr. Castellana cultivated and expected personal support and loyalty from the
SEFCU board of directors, including approval of Mr. Castellana's proposals for his
own compensation and benefits, overall direction of the credit union, and
approval.
39. The SEFCU board of directors delegated to Mr. Castellana its non-
effectively
41. Prior to January 2018, Plaintiff became aware that Mr. Castellana had
members and the status of their to third parties with whom Mr. Cactanana
loans,
. .
8 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
42. Prior to January 2018, Plaintiff expressed objection and disagreement in person to
43. Plaintiff also requested that he be allowed to fully perform CFO Responsibilities
44. Plaintiff's concerns and requests regarding reduction of his responsibilities as CFO
were not addressed by Mr. Castellana and were referred to by Mr. Castellana in
issues"
internal SEFCU communications as "Dave and as "lack of collaboration".
45. As CFO of SEFCU, Plaintiff formed a good faith and reasonable belief that Mr. -
"perks"
Responsibilities; to obtain such as protection by a full time armed
directors'
personal security guard/chauffeur; to control and manage the board of
review and approval process for CEO compensation and benefits; all contrary to
46. Upon information and belief, in considering compensation and benefits for Mr.
Mr. Castellana and personal advisers, did not retain independent advisers, did not
9 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
implications, and did not consider levels of compensation and benefits provided to
47. Upon information and belief, SEFCU contends that it is not required to disclose
executive compensation and benefits and as a matter of policy, does not disclose
48. Based on his professional experience with SEFCU and in prior executive positions,
2018, Plaintiff formed a good faith and reaconable belief that the CEO's practices
and policies constituted a serious threat to the safety and soundñess of SEFCU and
49. Plaintiff reascñably believed in good faith that the practices and procedures herein
are not concistent with prudent credit union management and gove1ñance, not in
50. During the course of Plaintiff s employment as CFO, Plaintiff became aware of
facts and events that led Plaintiff to a further good faith and ransonable belief that
Mr. Castellana had business and personal relatioñships that created real or
10 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
interests.
51. Upon information and belief, the transactiom referenced in paragraph 50 included
offices.
52. Upon information and belief, while holding board and other fiduciary positions
and relatiomhips with the recipient, Mr. Castellana also proposed, requested and
gift for athletic facility naming rights, a proposal that was eventually withdrawn.
53. Plaintiff formed a good faith and reasonable belief that some or all of the
transactions referenced above were not in the best interests of SEFCU members
and presented serious risks to SEFCU and the interests of its scmbers.
55. Mr. Castellana did not respond to the January 2018 Letter.
56. Upon informatica and belief, the SEFCU Supervisory Comittee retaiñcd the
Rochester New York based accounting firm of Mengel, Metzger Barr and Co. LLP
11 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
57. On June 19, 2018, Plaintiff submitted a letter to the SEFCU Supervisory
58. Plaintiff's Whistleblower Statement was signed and made by Plaintiff in good faith
and submitted to the Supervisory Committee to protect the interests of SEFCU and
its members.
59. Plaintiff's Whistleblower Statement was truthful and based on Plaintiff's best
60. Upon information and belief, and unbeknownst to Plaintiff, at some time after
61. Upon information and belief, on or about September 6, 2018, MMB issued a
62. The MMB Report was not provided to Plaintiff by MMB or by SEFCU.
63. Upon information and belief, without notice to Plaintiff, SEFCU then retained one
of its outside law firms, Barclay Damon, LLP ("Barclay Damon") to review the
64. Upon information and belief, on or about March 29, 2019, on behalf of SEFCU,
Barclay Damon sent a letter to Pisintiff advising that it had been cñgaged and that
12 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 . RECEIVED NYSCEF: 08/09/2019
65. Upon information and belief, Barclay Damon did not perform, and was not
66. Upon information and belief, Barclay Damon was instructed, as SEFCU's outside
law firm, to discredit Plaintiff's Whistleblower Statement and the MMB Report, to
clear SEFCU and Mr. Castellana from wrongdoing as had been alleged in
67. Barclay Damon did not interview Plaintiff before issuing its Rebuttal Report.
68. Upon information and belief, the MMB report was dated September 6, 2018.
69. Upon information and belief, Barclay Damon's Rebuttal Report was dated
70. Upon information and belief, in April 2019, Barclay Damon allowed Plaintiff's
71. A copy of the Barclay Damon report was not provided to Plaintiff or his attorney.
72. On or about May 8, 2019, Plaintiff was s=nmened to appear with his attorney for
73. At that time and place, Barclay Damon attorneys informed Plaintiff that his
directed not to return to SEFCU offices, even to retrieve his personal beloñgiñgs.
74. Plaintiff was removed from SEFCU payroll as of May 18, 2019 but was not
compensation.
75. SEFCU did not have any cause and had no good reason to fire Plaintiff as its CFO.
13 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
76. Termination of Plaintiff's employment was in bad faith, contrary to the SEFCU
77. Upon information and belief, Plaintiff s employment was terminated by order of
the board of directors of SEFCU at the direction and request of Mr. Castellana.
78. The reasons for termination of Plaintiff s employment were to punish Plaintiff and
direction of SEFCU.
80. SEFCU has willfully breached its express agreement with Plaintiff to prohibit and
.
refrain from retaliation for filing a complaint under the SEFCU Whistleblower
Policy.
81. SEFCU's breach of that agreement has caused economic loss and damage in
83. SEFCU has breached its implied term of Plaintiff's employment and its implied
agreement to prohibit and refrain from retaliation for filing a complaint under the
14 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
84. SEFCU's termination of Plaintiff's employment was wrongful and in breach of its
86. SEFCU willfully breached its implied obligations to Plaintiff of good faith and fair
dealing.
87. SEFCU's breach of that agreement has caused economic loss and other damage,
and with intent to remove Plaintiff from SEFCU as its CFO and as a restraint upon
90. As a condition and term of employment, SEFCU requires its mañagers, such as
reporting.
Statement and the MMB Report, arranged for anath- report to be prepared by its
15 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
embarrass Plaintiff to cause emotional harm and distress and to damage his
92. SEFCU's conduct was also contrary to public policy, coñtrary to the best interests
of its members and contrary to the purpose of the SEFCU Whistleblower Policy.
93. SEFCU has acted in bad faith and with malice toward Plaintiff and in an
94. Plaintiff demands compensatory and punitive damages and award of costs and
attorneys'
fees.
(Fraud)
96. The representations made and the policies stated in the SEFCU Whistleblower
prohibited and that wisstleblowers are protected against retaliation are false.
97. In fact, SEFCU does retaliate, has in fact retahted against Plaintiff, and in fact
does not prohibit or protect against retaliation under the SEFCU Whistleblower
Policy.
16 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
98. Plaintiff alied to his detdment, and upon informat½n and belief, all other SEFCU
employees and its members have reasonably relied to their detriment upon the
99. The SEFCU Whistleblower Policy is in place to protect Plaintiff, all other SEFCU
. Plaintiff and all other SEFCU employees a guarantee against retaliation, and by
attorneys'
102.Plaintiff demands compensatory, punitive damages and fees in amounts
to be pmven at trial.
.
attorneys'
on the Causes of Action set forth herein, costs and fees, together with such
Dated A gust 9, 20
'
Al y, Yor
17 of 18
FILED: ALBANY COUNTY CLERK 08/09/2019 03:20 PM INDEX NO. 905126-19
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/09/2019
VERIFICATION
.
STA Ili Of NIE Y()RK
COl'NTY Of Al.BANY
I am the Plaintiff named in the within action: that deponent has read the foregoing Complaint and
knows the contents thereof: and that the same is true to deponent s own knowledge. except as to
the matters therein stated to be alleged upon information and belief. and as to those matters
I he grounds of deponent s belief as to all matters not stated upon deponent s knowledge are
based on res iew of business records and documents in his possession as well as personal
knowled
to before - t} •
Sworn
th day o u t -019
DANIEL M. SLEASMAN
Notary Public, State of New York
Qualified in Aloany Coun
Reg# 02SL4829273-
Comm. Expires 10/3/
18 of 18