Lead Stories

A federal District Court has refused to vacate an arbitrator’s award of more than $8 million to several nonprofit advocacy groups when their fundraising counsel violated a confidentiality clause in their agreement by giving proprietary information about their operations to their opponents on an Alaskan ballot measure.  The Court said that the fundraiser had failed to show that the arbitrator had “manifestly disregarded” the law in reaching his decision. (Fund Raising, Inc. v. Alaskans for Clean Water, C.D. CA, No. CV 09-4106, 6/26/12.)

When representatives of the Evangelical Methodist Church met with individuals about forming an EMC church in Nampa, ID, the group created the New Heart Community Fellowship Evangelical Church of Nampa and signed an agreement with EMC agreeing to follow its rules and regulations.  Five years later, the pastor informed EMC that he had resigned as pastor of New Heart and was serving as pastor for a new church called The Crossing.

An appellate court in New York has affirmed the dismissal of a suit against the volunteer board chair of a nonprofit research institute when a company seeking $97,000 on a contract claim failed to allege sufficient facts to show that the board chair had been grossly negligent or engaged in intentional misconduct.  (Krackeler Scientific v. Ordway Research Institute, Supreme Ct., App. Div., Third Dept., 7/26/12.)

The board of directors of a nonprofit corporation may not by themselves amend the bylaws to deprive the corporation’s sole member of voting rights, an appellate court in New York has affirmed.  The member’s voting rights could be removed only by its removal as a member or its resignation under the state law.  (Gluck v. Chevre Liady Nusach Hoary, Supreme Ct., App. Div., Second Dept., 7/25/12.)

The volunteer director of a nonprofit school in Hawai‘i who donated his services as a real estate broker and loaned the school funds to buy real estate jointly with a Buddhist temple has been denied coverage under his professional liability policy in a suit by the temple when the joint purchasers could not agree upon a division of the ownership.  An appellate court in Hawai‘i has affirmed a decision that the policy specifically excluded coverage of a claim for damages.  (Keown v. Tudor Insurance Company, Intermediate Ct. of App., HI, No. 29695, 8/16/12.)

A federal District Court in North Carolina has affirmed a Bankruptcy Court decision holding that the founder and “Chief Apostle” of a church, who had the powers of president and CEO of the corporation, is personally liable for payment of withholding taxes for church employees when the church failed to remit the amounts due.  The Court has rejected a claim that an interpretation of her powers, based in part on a reading of the church’s bylaws, violated the Apostle’s and the church’s rights under the First Amendment of the U.S. Constitution. (Vaughan v. Internal Revenue Service, E.D. NC, No. 4:11-CV-222, 7/16/12.)