Nonprofit Law YOU Want to Know
We regularly feature answers to questions from readers in our “To the Point” column. The full list can be viewed here. Here are a few questions recently received from readers.
Can inactive members sue to recoup funds?
Lead Stories
Employee May Proceed with Suit Against Volunteer Board President
Volunteer Protection Act is not basis to dismiss when volunteer fails to show action was not flagrant
A trial court in Connecticut has refused to grant summary judgment to the volunteer president of a Jewish synagogue who was sued by an employee for allegedly failing to adequately supervise the executive director who fired her improperly. The Court has ruled that the federal Volunteer Protection Act protects a volunteer from suit for mere negligence, but not a flagrant indifference to the rights of the injured, and that the president failed to eliminate a question of fact on the issue. (Maisano v. Congregation Or Shalom, Superior Ct., CT, New Haven, No. CV074027175S, 11/19/09.)
Court Refuses to Permit Lease of Parkland to Hospital
City may not change use of land willed for use as public park “forever”
An appellate court in Pennsylvania has refused to grant the City of Philadelphia the right to lease 19 acres of a public park that had been willed to the City as parkland “forever” to the adjacent Fox Chance Cancer Center. The Court said that the City had not shown that the park use was no longer “practicable or possible and has ceased to serve the public interest.” (Estate of Ryerss, Pa. Commonwealth Ct., No. 2446 C.D. 2008, 12/16/09.)
Federal Court Can’t Force State AG to Sue Foundation
Eleventh Amendment bars federal suits against state officials on basis of state law
The Second Circuit Court of Appeals has affirmed the dismissal of a citizen’s federal court complaint seeking to force the Attorney General of New York to take action against a charitable foundation under New York law. (Carvel v. Cuomo, No. 08-3703, 12/21/09.)
Nonprofit Law YOU Want to Know
We regularly feature answers to questions from readers in our “To the Point” column. The full list can be viewed here. Here are a few questions recently received from readers.
May unrecognized church accept donations?
May an incorporated church, which does not have 501(c)(3) status, receive tithes and offerings from its members? --From the Website.
May Auditors Be Liable for Statements When Charity Officers Misrepresent Data?
PA Court narrows in pari delicto defense where auditors conspired with officers to produce false statements
When a charity or other organization sues its auditors for producing false financial statements, the auditor can often avoid liability if the officers of the organization provided false information for the audit. The auditors can be protected by the in pari delicto defense, which provides that in the case of mutual or equal fault, the case of the defender is stronger.
The efforts of the unsecured creditors of the Allegheny Health Education and Research Foundation, which in 1998 filed the largest nonprofit bankruptcy up to that time, took on new life recently when the Pennsylvania Supreme Court disagreed with a federal District Court decision that had denied them the right to sue AHERF’s auditors for false financial statements. The Supreme Court has held that the in pari delicto defense will not apply when the auditors have conspired with the officers to produce the false statements.