Justia Non-Profit Corporations Opinion Summaries

Mark Nelson, operating North Country Weatherization Technologies, provided ice removal services to Pine View First Addition Association, a Minnesota non-profit homeowners' association, in spring 2023. Pine View's property manager, a North Dakota LLC, contacted Nelson for urgent ice removal due to water damage. Nelson completed the work and invoiced Pine View, but payment was delayed, allegedly due to Pine View's attempt to have insurance cover the costs. Nelson filed a lawsuit in North Dakota for breach of contract and unjust enrichment, seeking $79,695 plus interest and attorney’s fees.The District Court of Cass County, East Central Judicial District, granted Pine View's motion to dismiss for lack of personal jurisdiction, concluding that North Dakota did not have jurisdiction over Pine View, as it is a Minnesota entity and the services were performed in Minnesota. The court also denied Pine View's motion for Rule 11 sanctions against Nelson and his attorney, as well as Nelson's request for prevailing party attorney’s fees.The Supreme Court of North Dakota reviewed the case and reversed the district court's decision. The Supreme Court held that North Dakota has specific personal jurisdiction over Pine View because Pine View, through its North Dakota-based property manager, initiated contact with Nelson for the ice removal services. The court found that Pine View's contacts with North Dakota were sufficient to satisfy the state's long-arm provision and due process requirements. The Supreme Court also determined that the district court abused its discretion in denying Nelson's request for prevailing party attorney’s fees under Rule 11(c)(2), as Pine View's motion for sanctions against Nelson violated Rule 11(c)(5)(A). The case was remanded for further proceedings and to determine the amount of attorney’s fees Nelson is owed. View "Nelson v. Pine View First Addition Association" on Justia Law

In this case, the plaintiff, Joseph Gazal, donated over $1 million to purchase a car and a home for a destitute family. He was inspired to make this donation after hearing a homily delivered by defendant Carlos Echeverry, a deacon at his church. Gazal brought a lawsuit against Echeverry and his wife, Jessica Echeverry, as well as SOFESA, Inc., a nonprofit founded and led by Jessica Echeverry. Gazal claimed he was deceived into believing the car and house would be purchased for and titled to the destitute family, when in fact they were bought and titled to SOFESA.The defendants filed a special motion to strike the complaint under the anti-SLAPP (strategic lawsuit against public participation) statute, asserting that the homily and following conversations were protected speech. The trial court denied the motion, finding that the complaint did not rest on protected speech, but rather on private conduct and speech not directed at a wide public audience. Additionally, the court found that the causes of action arose from further communications that took place weeks after the homily.On appeal, the Court of Appeal of the State of California Second Appellate District Division Eight affirmed the trial court's decision. The court held that while the homily could be considered protected speech, the plaintiff's claims did not arise from the homily but rather from the alleged misconduct that occurred after its delivery. The court also found that the private discussions following the homily did not qualify for anti-SLAPP protection as they did not contribute to a public conversation on the issue of homelessness. Furthermore, the court denied a motion for sanctions filed by the plaintiff. View "Gazal v. Echeverry" on Justia Law

The case before the Supreme Court of North Carolina involved a dispute between The Society for the Historical Preservation of the Twentysixth North Carolina Troops, Inc. (plaintiff) and the City of Asheville (defendant). The controversy centered around a monument dedicated to Zebulon Vance, a former North Carolina Governor and Confederate Colonel. The plaintiff, a nonprofit historical preservation organization, raised funds to restore the monument and entered into a donation agreement with the City, whereby the monument was restored and then donated to the City. However, the City later decided to remove the monument, citing it as a public safety threat due to vandalism and threats of toppling.In response, the plaintiff filed a complaint against the City, alleging that the City breached the 2015 donation agreement and seeking a temporary restraining order, preliminary injunction, and a declaratory judgment. The plaintiff argued that both parties had entered into a contract with the intent to preserve the monument in perpetuity. The City filed a motion to dismiss the plaintiff’s complaint for lack of standing and failure to state a claim. The trial court granted the City's motion, and this decision was affirmed by the Court of Appeals.When the case reached the Supreme Court of North Carolina, the court reversed the Court of Appeals’ determination that the plaintiff's breach of contract claim should be dismissed for lack of standing. However, the court noted that the plaintiff had abandoned the merits of its breach of contract claim in its appeal. As such, the court affirmed the dismissal of the plaintiff's claims for a temporary restraining order, preliminary injunction, and declaratory judgment for lack of standing. The court concluded that the plaintiff failed to assert any ground for which it has standing to contest the removal of the monument. View "Soc'y for the Hist. Pres. of the Twenty-sixth N.C. Troops, Inc. v. City of Asheville" on Justia Law

The case involves the Reporters Committee for Freedom of the Press, a nonprofit organization that sought to unseal court filings from federal criminal investigations. The District Court in Minnesota dismissed the application for lack of jurisdiction, and the case was appealed to the United States Court of Appeals for the Eighth Circuit.The Reporters Committee's application aimed to unseal electronic-surveillance filings, which were required to be filed under seal by a local rule. The District Court believed the request was too broad since the majority of the materials requested become unsealed after six months. The court suggested negotiations with the United States Attorney’s Office to reach a solution.The Reporters Committee subsequently filed an amended application, seeking an order directing the clerk of the court to presumptively unseal warrants and related documents after 180 days and to begin docketing the government’s applications for electronic surveillance regardless of whether a judge granted them. The Committee claimed these duties arose under the First Amendment and the common-law right of access to public records and documents.The District Court dismissed the application, concluding that the Committee lacked standing because all it had was a “generalized, abstract interest” in unsealing the records. This decision was affirmed by the Appeals Court, which held that the Committee failed to establish it suffered a “concrete” and “particularized” injury. It was also noted that the Committee did not sue anyone who could provide the relief it sought, hence there was a lack of adversity necessary for federal court adjudication. View "Reporters Comm. for Freedom of the Press v. United States" on Justia Law

A Vermont-based non-profit organization and an LLC challenged a superior court's dismissal of their complaint over a grant they did not receive. The plaintiffs, Housing Our Seniors in Vermont Inc. and Lakemont Retirement Community LLC, argued that the grant provided by the Newport Development Fund Grant Committee to another organization was wrongly awarded. The plaintiffs also alleged a conflict of interest in the committee.However, the Vermont Supreme Court upheld the lower court's decision, reasoning that the plaintiffs lacked standing to challenge the grant award. The court clarified that the plaintiffs had no legal right to receive the grant or to have any specific procedure in the allocation of the grant. The court also dismissed the plaintiffs' argument of specific rules governing the grant process asserting that the grant process was discretionary, and the eligibility criteria did not guarantee any particular process.Consequently, the court affirmed the superior court's dismissal for lack of standing, reinforcing that a legal entitlement or right is essential to establish an injury-in-fact for standing. View "Housing Our Seniors in Vermont Inc. v. Agency of Commerce & Community Development" on Justia Law

In the State of Delaware, a lawsuit was brought by two non-profit organizations against multiple public officials, including tax collectors in Delaware's three counties. The organizations sought increased funding for Delaware’s public schools. The Court of Chancery held that the organizations were entitled to attorneys’ fees and expenses. On appeal, the Supreme Court of Delaware held that the Court of Chancery erred in its application of the "common benefit doctrine" and its expansion of a precedent case, Korn v. New Castle County, beyond taxpayer suits. The Supreme Court affirmed the Chancery Court's award of expenses, but reversed the award of attorneys' fees. The Supreme Court held that the litigation brought by the organizations was to compel the defendant county governments to comply with the law, a benefit that did not warrant an exception to the "American Rule" which states that each party bears its own attorneys' fees, absent certain exceptions. The Court also held that, even if this case were a taxpayer suit, it does not meet the standard set forth in Korn because there was not a quantifiable, non-speculative monetary benefit for all taxpayers. View "In re Delaware Public Schools Litigation" on Justia Law

The City and Borough of Sitka, Alaska allowed an independent nonprofit organization to host a public event at a city facility. The nonprofit organization arranged for a volunteer to hang decorations in the facility; a decoration fell, injuring an event participant. The injured participant sued the City, but not the nonprofit organization, for negligence. The City brought a third-party allocation of fault claim against the volunteer. The parties sought summary judgment, and the trial court concluded that, under federal law, the volunteer could not be held financially responsible for the accident and that the City could not be held vicariously liable for the volunteer’s actions. The remaining negligence issues were decided at a jury trial; the jury determined that the volunteer and the city had not been negligent and therefore were not liable for the accident. The event participant appealed. Finding no reversible error, the Alaska Supreme Court affirmed the trial court judgment. View "Sulzbach v. City & Borough of Sitka, et al." on Justia Law

In 2003, the Alabama Legislature and the citizens of Greene County voted to allow nonprofit organizations in that county to operate bingo games for fundraising purposes. Greenetrack, Inc. ("Greenetrack"), which was not a nonprofit organization, almost immediately began offering live and electronic bingo games at its gambling facility. From 2004 to 2008, Greenetrack reaped vast profits under the guise that its whole casino-style bingo operation was constantly being leased and operated by a revolving slate of local nonprofit organizations, whose nominal role earned them a tiny fraction of the bingo proceeds. Eventually, the Alabama Department of Revenue ("the Department") audited Greenetrack, found that its bingo activities were illegal, and concluded that it owed over $76 million in unpaid taxes and interest. Following a decade of litigation, the Alabama Tax Tribunal voided the assessed taxes on the threshold ground that Greenetrack's bingo business (regardless of its legality) was tax-immune under a statute governing Greenetrack's status as a licensed operator of dog races. The Department appealed, and the Alabama Supreme Court reversed, rejecting the statutory analysis offered by the Tax Tribunal and circuit court. Judgment was rendered in favor of the Department. View "Alabama Department of Revenue v. Greenetrack, Inc." on Justia Law

The issue presented for the Court of Appeal's review in this case centered on whether petitioner, The Community Action Agency of Butte County (CAA), had to produce its business records pursuant to the California Public Records Act (CPRA), the Freedom of Information Act (FOIA), and/or a regulation promulgated by real party in interest, California’s Department of Community Services and Development (the Department). After considering the arguments presented (including those of amici curiae), the text and history of CPRA, and other applicable authorities, the Court concluded: (1) a nonprofit entity like CAA might be an “other local public agency” only in exceptional circumstances not present here; (2) under a four-factor test adopted based on persuasive out-of-state authority, there was not substantial evidence for the trial court’s ruling that CAA was an “other local public agency”; (3) FOIA did not apply to CAA; and (4) the Department’s regulation did not require CAA to provide public access to its records generally. Accordingly, the trial court’s order was vacated. View "Community Action Agency of Butte County v. Super. Ct." on Justia Law

Debra Turner, formerly a director and president of the Conrad Prebys Foundation (Foundation), appealed judgments of dismissal in favor of the Foundation and its directors, following orders sustaining demurrers to her probate and civil actions. In those actions, Turner alleged the other Foundation directors breached their fiduciary duties in preapproving a settlement range for Laurie Victoria, who served both as a Foundation director and as the trustee of the Conrad Prebys Trust (Trust), to negotiate a settlement of a trust challenge by a disinherited heir. Turner also challenged Victoria’s actions as trustee. Several months after commencing her action, Turner’s term as a Foundation director and officer expired when she was not reelected to her positions during the annual election process. The civil and probate courts determined that Turner lost standing to maintain her causes of action. The issue this case presented for the Court of Appeal's review centered on whether a director of a nonprofit public benefit corporation who brings an action on behalf of the nonprofit public benefit corporation could lose standing to pursue its claims if the director was not reelected during the litigation. The Court of Appeal concluded the statutory scheme and public policy considerations required a continuous relationship with the public benefit corporation that was special and definite to ensure the litigation was pursued in good faith for the benefit of the corporation. "If a plaintiff does not maintain such a relationship, the statutory scheme provides the nonprofit public benefit corporation with protection through the Attorney General, who may pursue any necessary action either directly or by granting an individual relator status." Because Turner lost standing to pursue her causes of action, the Court affirmed the judgments of dismissal as to Turner acting in her capacity as a former director and officer. The case was remanded, however, with directions for the civil and probate courts to grant 60 days leave to amend, limited to the issue of whether a proper plaintiff could be substituted to pursue the existing claims. The Attorney General could consider during that 60-day period whether granting relator status to Turner, or another individual, for these claims was appropriate. View "Turner v. Victoria" on Justia Law