loading

Golden Rain Foundation v. Franz
filed June 10, 2008, Fourth District, Div. Three
Cite as 2008 SOS 3425


Penalties Imposed on Non-Profit Corporation Affirmed

Plaintiff appellant Golden Rain Foundation (GRF) is a California non profit corporation formed in 1961. Its articles of incorporation state that it was formed to “engage primarily and specifically in providing services and furnishing community facilities to housing operated on a cooperative or other basis and other occupant.”

Defendants are among the 900 residents of Leisure World and members of GRF.

The controversy commenced when the defendants sought various document from GRF pursuant to the Davis Sterling Act and other statutes. GRF refused the document request. Defendants initiated small claims action and the courts found GRF wrongly withheld the documents and awarded damages to the defendants.

GRF file an appeal and declare that it is not subject to penalties pursuant to the Davis - Stirling Act for failing to produce the requested documents.

After hearing the court held that GRF is an “association” governed by the Davis – Stirling Act.

GRF file an appeal.

Whether or not GRF is an association with in the meaning of Davis – Stirling Act or a Foundation as it alleges?

The Davis – Stirling Act defines an “association” as a non profit corporation or unincorporated association created for the purpose of managing a common interest development”.

GRF concedes that it is a non profit corporation and through substantial evidence the court held that GRF was created for the purpose of managing Leisure World. It has no any independent operation other than serving the Mutuals and maintaining the common facilities.

GRF also acknowledges that it was created to manage Leisure World. In its 2003 annual report it stated that “the sole purpose for the existence of GRF is o provide management, accounting and maintenance services to the sixteen mutual corporation and for the care of the community facilities”.

Therefore, GRF can be held liable under the Davis – Stirling Act.

Judgment of the lower court is affirmed.


| More
First Name  
Last Name  
City  
State  
Phone  
Email  
Type  
Details  
Join Our Mailing List

  Type the letters below:  

Captcha Image
Follow us on Twitter
Facebook
Avvo Profile
Linkedin Profile
Rodney Mesriani on

Follow us on Twitter
Facebook
Avvo Profile
Linkedin Profile