Lead Stories

Defendants’ Lawyer Disqualified After Interviewing People on Plaintiffs’ List

Court says information gained by improper questions cannot be unlearned and would harm proceedings

An appellate court in California has affirmed the disqualification of an attorney for a Sikh religious center after he interviewed 11 members on a list of more than 150 members challenging the merger of two centers.  Although the lawyer said the members told him they were not represented by other counsel, the Court held that there was adequate reason for the disqualification.  (Grewal v. Gurunanak Mission Sikh Center, Ct. of App., CA, Fifth Dist., No. F-57688, 4/27/10.)

May Director Inspect Records To Pursue Personal Lawsuit?

Court avoids issue, says director has no right after being removed from the board

May the director of a nonprofit condominium association inspect the records of the association in order to obtain information to pursue her personal lawsuit against the association?

A trial court in California held that she had an absolute right to inspect under the statute and permitted the inspection.  It further prevented the members’ action of removing her from the board from becoming effective until after the inspection was supposed to take place.

Court Refuses to Reform Will To Create CRAT and Save Taxes

Attorney, not told the extent of the donor’s estate, followed instructions to draft simple, inexpensive instrument

A man who lived in subsidized senior housing and failed to tell his lawyer the extent of his estate told his lawyer only that he wanted to keep his legal fees as low as possible. Following instructions, the lawyer produced a simple 2-page will, leaving the income from his securities and bank accounts to two friends, with the residue thereafter to the American Cancer Society and the American Heart Association.

Corporation Is Not Successor To Unincorporated Association

Court says attempt to incorporate association is invalid without adequate notice, unanimous consent of members

A nonprofit corporation approved at a meeting of an unincorporated association does not succeed to the interests of the association when the members have not received adequate notice of the proposal and have not approved it unanimously, a federal District Court in Virginia has held.  (Bedford Genealogical Society, Inc. v. Bedford Museum and Genealogical Library, W.D. VA, No. 6-09-cv-00060, 5/21/10.)

Receiver in Ponzi Scheme May Sue School to Recover Gifts

School received more than $1.1 million from partnership and intervening foundation

A receiver appointed to collect assets dissipated by the perpetrator of a Ponzi scheme has been permitted to pursue a recovery action against a nonprofit private school that received “purported charitable donations” of more than $900,000 directly from the fraudulent partnership and another $200,000 from a foundation that received it from the partnership.  A federal District Court in Philadelphia has denied the school’s motion to dismiss the case.  (Hecht v

Triathlon Club Ordered to Indemnify New York City for Accident During Race

Court says nonprofit has obligation to pay any damages for which City may be ultimately responsible

When a bicyclist riding in Central Park in New York City was injured in an accident with a cyclist riding in a race organized by the New York Triathlon Club, he sued the City for damages.  He claimed that the City failed to exercise reasonable care to prevent foreseeable dangers that arose from allowing the race to proceed on park roads while the roads were being used simultaneously by the general public.