T118 LAW FIRM 01 KELEHER &McLEOD - …files.ctctcdn.com/a2f69172401/00a13e4c-7809-44e1-9c76-5899c3a782… · THOMAS F. KELEHER CLYDE F. WORTHEN W. SPENCER REID THOMAS ... I will begin

WILLIAM B. KELEHER ARTHUR 0. BEACH THOMAS F. KELEHER CLYDE F. WORTHEN W. SPENCER REID THOMAS C. BIRD KURT WIHL S. CHARLES ARCHULETA SUSAN M. McCORMACK DAVID W. PETERSON SEAN OLIVAS GARY J. VAN LUCHENE KATHLEEN M. WILSON ANASTASIA S. STEVENS BENJAMIN F. FEUCHTER MARY BEHM JAMES L. RASMUSSEN JEFFREY A. DAHL DERON B. KNONER ANN MALONEY CONWAY JUSTIN B. BREEN HARI-AMRIT KHALSA BRIAN J. HAVERLY TINA MUSCARELLA GOOCH CASSANDRA R. MALONE

T118 LAW FIRM 01

KELEHER &McLEOD A PHOFESSIONAL AOCIAT1110

100 YEARS

Running Horses 9 Gray Mercer 1989

201 Third Street NW, 12th Floor (87102) PO Box AA

Albuquerque, New Mexico 87103-1626 Telephone: (505) 346-4646 Facsimile: (505) 346-1370

www.keleher-law.com

Jeffrey A. Dahl Direct Dial: (505) 346-9118

[email protected]

CHAD F. WORTHEN NATHAN S. STIMSON MICHAEL G. SMITH JULIA L. MACCINI ZACHARY R. CORMIER

Of Counsel: RICHARD B. COLE ROBERT J. PEROVICH RICHARD K. BARLOW PHIL KREHB1EL MICHELLE LALLEY BLAKE BRIAN J. O'ROURKE

MICHAEL L. KELEHER (retired 2012) CHARLES A. PHARRIS (retired 2014)

W.A. KELEHER (1886-1972) A.H. McLEOD (1902-1976) JOHN B. TITTMANN (1907-1996) RUSSELL MOORE (1931-2003) MARGARET E. DAVIDSON (1950-2001)

May 21, 2015

VIA EMAIL & U.S. MAIL Richard E. Olson, Esq. Hinkle Shanor LLP P.O. Box 10 Roswell, NM 88202-0010 [email protected]

(012973-001)

Re: New Mexico Military Institute v. NMMI Alumni Association, Inc.; Fifth Judicial District Court Case No. D-504-CV-2013-00339

Dear Mr. Olson:

This will acknowledge receipt of your letter dated may 15, 2015. Please accept this correspondence as the response by the Institute Alumni Association ("Association") to the matters set forth therein. I will address the points in the order you raised them.

I will begin by voicing our disappointment in the positions advanced by your client, the New Mexico Military Institute ("Institute"), set forth in your letter. We had hoped that there would be a way to work together to support both the Institute, the Cadets, and the Alumni. Indeed, our client has reached out to your client to discuss matters going forward but has received no response. It now appears that any agreed resolution is unlikely and that further, albeit needless, litigation will ensue.

1. The Association's position is that Section 4.5 of the Memorandum of Agreement, states that the agreement may only be terminated for cause, and that Judge Shuler-Gray's Findings and Conclusions also support that reading. Specifically, a reading of Section 4.5 of the MOA states that the termination provision is subject to a cure period. This inherently implies that the MOA termination is only for cause/breach. Judge Shuler-Gray noted in her Findings (Nos. 14 and 15) that the 1993 and 2001 MOAs allowed for termination with or without cause, but that the current MOA provides for a cure period (Finding No. 20). As you are aware, the Association has done nothing to breach the terms of that agreement. Agency law requires that the principal allow the agent to perform under the contract, which the Association has done and

Richard E. Olson, Esq. Re: NM Military Institute v. NMMI Alumni Association, Inc. May 21, 2015 Page 2

continues to do. We prefer to look forward to serving the Institute and its Cadets and Alumni for years into the future, either with or without the Institute's support.

2. Judge Shuler-Gray clearly denied all of the Institute's requests to transfer funds that we currently hold in trust, and we are not willing to transfer those funds to the Foundation or any other entity. The funds were given to the Association and not to the Institute. We have been and are continuing to administer those funds in accordance with the donors' original intent. Judge Shuler-Gray stated in her Findings and Conclusions that the Institute had an "equitable and legal interest" in the trust funds; but, as you know, that is far different from ownership of the funds and there is no legal basis on which to state that the Institute has an ownership interest at all. Trust funds are not "owned," but instead are held in trust for the benefit of another.

Furthermore, Judge Shuler-Gray's Finding No. 15 notes that the prior MOAs state that the Association is not an agent of the Institute. Our client takes the position that it became an agent of the Institute only when the last MOA was entered into in 2012. None of the funds received prior to that date by the Association would be considered funds over which the Institute would have control in an agency relationship.

3. The Court has ruled that the MOA is still in full force and effect and that is the agreement that the Association is operating under. There is no provision in the MOA to seek prior approval for actions taken by the Association. The MOA is clear in its affirmative undertakings of both the Institute and the Association. A principal may not unreasonably interfere with an agent's work. Moreover, request is hereby made pursuant to Article III of the MOA, "Undertakings of the Institute," that the Institute issue a press release recognizing the Association as the Alumni Association for the Institute. We expect the press release to be done within the next ten (10) days.

4. The Association does not recognize the Institute's intent to terminate. The MOA may only be terminated for cause as set forth above, which you have agreed does not exist.

We look forward to serving the Institute, its Cadets, and its Alumni now and into the future. If the Institute insists on its present position, which we believe is short-sighted and not in the best interest of all parties, it appears that further court proceedings will be initiated. Please advise your client to govern itself accordingly.

Sincerely,

KELEHER & McLEOD, P.A.

JAD/rld cc: The Institute Alumni Association, Inc. 12973-001 /4827-6657-6164, v. 1