Judge: James L. Crandall, Case: 21-01240081, Date: 2022-08-25 Tentative Ruling

Petition for Writ:

Petitioners Tan Huu Tran, Hai Thi Nguyen, Dung Ngoc Ho, and Thanh Duc Nguyen Petition for Writ of Mandate commanding Dai-Dao Tam-Ky Pho-Do, Toa-Thanh Tay-Ninh (“Temple”) and its directors, to make available to Petitioners Temple’s books and records for Inspection and Copying is GRANTED.

The Temple is ORDERED to make available to Petitioners the requested records at the offices of the Temple’s counsel within seven (7) days of the notice of this order.

Code of Civil Procedure Section 1085, subdivision (a) provides that: “A writ of mandate may be issued by any court to any inferior tribunal, corporation, board, or person, to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station, or to compel the admission of a party to the use and enjoyment of a right or office to which the party is entitled, and from which the party is unlawfully precluded by that inferior tribunal, corporation, board, or person.”

California Code of Civil Procedure Section 1086 provides that: The writ must be issued in all cases where there is not a plain, speedy, and adequate remedy, in the ordinary course of law. It must be issued upon the verified petition of the party beneficially interested.”

Right to Inspect and Copy:

Petitioners contend that they have a statutory right and a right pursuant to the Temple’s Bylaws to inspect and copy the books and records of the Temple.

As to a right to inspect, Corporations Code Section 6330, subdivision (a)(1) provides that a member may: “Inspect and copy the record of all the members’ names, addresses and voting rights, at reasonable times, upon five business days’ prior written demand upon the corporation which demand shall state the purpose for which the inspection rights are requested.”

Corporations Code Section 6333 provides that: “The accounting books and records and minutes of proceedings of the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of any member at any reasonable time, for a purpose reasonably related to such person's interests as a member.”

For a corporation that is a nonprofit religious corporation, the Corporations Code contains similar statutes concerning the duties of the corporation to maintain adequate records and the members’ right to inspection.

Corporations Code Section 9511 provides that: “Every corporation shall keep at its principal office in this state the original or a copy of its articles and bylaws as amended to date, which shall be open to inspection by the members at all reasonable times during office hours. If the corporation has no office in this state, it shall upon the written request of any member furnish to such member a copy of the articles or bylaws as amended to date.”

Corporations Code Section 9512 provides that: “Except as otherwise provided in the articles or bylaws, a member may inspect and copy the record of all the members’ names, addresses and voting rights, at reasonable times, upon five business days' prior written demand upon the corporation for a purpose reasonably related to the member's interest as a member.”

Corporations Code Section 9512 provides that: “Except as otherwise provided in the articles or bylaws, the accounting books and records and minutes of proceedings of the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of any member at any reasonable time, for a purpose reasonably related to such person's interests as a member.”

Pursuant to Sections 6330, 6333, 6321, 9160, 9511, and 9512, Petitioners move for issuance of a preemptory writ of mandate commanding the Temple and its directors, to make available to Petitioners the following Temple records:

d) the record of all the members’ names, addresses, and voting rights;

e) the accounting books and records and minutes of proceedings of the members, the board, and committees of the board; and

f) the annual report required under Corporations Code Section 6321(a).

Petitioners also move pursuant to the Temple’s Bylaws. Article 10.02 of the Temple’s Bylaws states:

“Any member, director, officer, or committee member of the Corporation may inspect and receive copies of all the corporate books and records required to be kept under the Bylaws. Such a person may, by written request, inspect or receive copies if he or she has a proper purpose related to his or her interest in the Corporation. He or she may do so through his or her attorney or other duly authorized representative. The inspection may take place at a reasonable time, no later than seven (7) days after the Corporation receives a proper written request.”

(Brandon Q. Tran Decl. ¶ 12, Ex. L.)

Pursuant to the Bylaws, Petitioners move for the production for inspection and copying, of the following documents:

i) file-endorsed copies of all documents filed with the California Secretary of State relating to the Corporation, including but not limited to the articles of incorporation, and any article of amendment, restated articles or merger, articles of consolidation, statement of information, and statement of change of registered office or registered agent;

j) a copy of all Bylaws, including these bylaws, and any amended version or amendments to them;

k) Minutes of the proceedings of the members, Board, and committees having any of the authority of the Board;

l) a list of the names and addresses of the members, directors, officers, and committee members of the Corporation;

m) a financial statement showing the Corporation’s assets, liabilities, and net worth at the end of the one most recent fiscal year;

n) a financial statement showing the Corporation’s income and expenses for the most recent year;

o) all rulings, letters, and other documents relating to the Corporation’s federal, state, and local tax status; and

p) the Corporation’s federal, state, and local tax information or income-tax returns for each of the Corporation’s most recent tax years [sic].

Petitioners have shown that the Articles of Incorporation filed by the Temple with the California Secretary of State, state that: “This corporation is a religious corporation and is not organized for the private gain of any person. It is organized under the Nonprofit Public Benefit Corporation Law for religious purposes.” (Brandon Q. Tran Decl. ¶ 3, Ex. H.)

Petitioners are of the Cao Dai faith and members of the Temple. Specifically, Petitioners have shown that Tan Huu Tran and Hai Thi Nguyen have been members of the Temple since 2004; Dung Ngo Ho has been a member of the Temple since 1998; and Thanh Duc Nguyen has been a member of the Temple since 2002. (Tan Huu Tran Decl., ¶ 2, Ex. A; Hai Thi Nguyen Decl., ¶ 2, Ex. B; Dung Ngo Ho Decl., ¶ 2; Thanh Duc Nguyen Decl., ¶ 2.)

On August 19, 2021, Petitioners Hai Thi Nguyen, Dung Ngoc Ho, and Thanh Duc Nguyen along with other members of the Temple, made a written request to inspect the corporate books and records. (Hai Thi Nguyen Decl., ¶ 3, Ex. C; Dung Ngoc Ho Decl., ¶ 3, Ex. C; and Thanh Duc Nguyen Decl., ¶ 3, Ex. C.)

The request was made to “James” Hai Tran as the Director for the Temple. (Ibid.)

The Temple failed to comply with the request. (Hai Thi Nguyen Decl., ¶ 4; Dung Ngoc Ho Decl., ¶ 4; and Thanh Duc Nguyen Decl., ¶ 4.)

On November 9, 2021, Petitioners’ counsel sent a second formal written demand to inspect the Temple’s corporate books and records. (Brandon Q. Tran Decl., ¶ 4, Ex. I.)

The Temple agreed to produce documents for inspection and copying, however, the parties disagreed as to the location of the inspection. (Brandon Q. Tran Decl., ¶ 8.) Petitioner wanted the inspection to occur at the temple itself where the books and records are maintained because if there were categories of documents missing, the Temple could easily access its storage and obtain the necessary documents. (Brandon Q. Tran Decl., ¶ 8.)

The Temple, however, proposed that the inspection occur at its counsel’s offices. (Brandon Q. Tran Decl., ¶ 8.) Because the Temple’s counsel insisted on the inspection occurring at his office, Petitioner’s counsel requested that the Temple identify the categories of documents that the Temple intended to produce for inspection. (Brandon Q. Tran Decl., ¶ 8.)

The Temple and its counsel refused to identify what categories of documents it intended to produce. (Brandon Q. Tran Decl., ¶ 8.)

Petitioner contends that the Temple’s counsel could not confirm one way or the other whether the documents being presented for inspection were actually documents being requested for inspection. (Brandon Q.Tran Decl., ¶ 8.)

Therefore, Petitioner contends the inspection may well have been a waste of time and resources if the documents requested were not actually presented. (Brandon Q. Tran Decl., ¶ 8.)

Accordingly, Petitioner refused to agree to the inspection at the Temple’s counsel’s office with no prior identification of what was being produced.

The Temple does not dispute that Petitioners are entitled to inspect the requested records. In fact, the President and Chairman of the Board of Directors (“BOD”) of the Temple states that he and the others members of the BOD were present at the office of the Temple’s attorney with binders of records which were prepared in response to the list of documents that Petitioners’ counsel demanded to inspect, but they never showed up so they ended up spending the time to discuss how to better organize the documents so that they could present them to members who would wish to see them. (James Hai Tran Decl., ¶ 7.)

Further, on June 12, 2022, the Temple has shown that it held a public press conference to inform the community about the legal or public disputes relating to the complaints from Petitioners and that at the press conference, which was open to the Petitioners, all Temple members, and the community, the Temple announced and presented binders of records which would be the same or similar materials that would be ready to present to Petitioners or any member of the Temple if asked to inspect. (James Hai Tran Decl., ¶ 8.)

Therefore, the Temple has shown that it did not refuse to allow Petitioners to inspect the records.

Here, it appears that the Petitioners refused to engage in the inspection because the Temple did not provide a list of the documents that would be available for inspection before the date of the inspection. Based on the Temple’s counsel statements, Petitioners believed that the inspection would be a waste of time. Specifically, the Temple’s counsel stated: “You’re right that I’ve not seen the documents yet. I really don’t know how they organize those documents either. [¶] This organization is a non-profit and religious group and keeping good record is not their forte. I assume they know what to bring to the inspection.” (Stanley Decl. in Support of Reply, ¶ 3, Ex. A.)

The Temple’s counsel further stated: “I’ve informed you previously that the documents would be the categories of documents and along the line with the list of categories that you’ve sent to us. [¶] As to the list of documents, I don’t even have it and I don’t think they’ve organized the documents in the way that us lawyers do.” (Stanley Decl. in Support of Reply, ¶ 3, Ex. A.)

This case is a close call. However, given the Temple’s counsel’s representation that “keeping good record is not their forte” and that “I don’t think they’ve organized the documents in the way that us lawyers do,” it was reasonable for Petitioners to decline to agree to the inspection and request relief from the court.

As to conducting the inspection at the Temple, Petitioners have not provided any legal authority which obligates the Temple to allow the inspection at the Temple. The Temple contends that the BOD believes that conducting the inspection at the Temple is disrespectful to the worshiping place and there was no suitable office space sufficient to hold a large number of people for that purpose. (James Hai Tran Decl., ¶ 8.)

Further, the Temple has shown that there is no office space that was separated or away from worshipping space. (James Hai Tran Decl., ¶ 8.)

Accordingly, the Temple is ORDERED to make available to Petitioners the requested records at the offices of the Temple’s counsel within seven (7) days of the notice of this order.

Cost of inspection:

Corporations Code sections 6336 provides in pertinent part: “Upon refusal of a lawful demand for inspection under this chapter, or a lawful demand pursuant to Section 6330 or Section 6333, the superior court of the proper county, or the county where the books or records in question are kept, may enforce the demand or right of inspection with just and proper conditions or may, for good cause shown, appoint one or more competent inspectors or independent accountants to audit the financial statements kept in this state and investigate the property, funds and affairs of any corporation and of any subsidiary corporation thereof, domestic or foreign, keeping records in this state and to report thereon in such manner as the court may direct. . . (c) All expenses of the investigation or audit shall be defrayed by the applicant unless the court orders them to be paid or shared by the corporation.”

Similarly, Corporations Code sections 9514 provides in pertinent part: “(a) Upon refusal of a lawful demand for inspection under this chapter, the superior court of the proper county, or the county where the books or records in question are kept, may enforce the demand or right of inspection with just and proper conditions or may, for good cause shown, appoint one or more competent inspectors or independent accountants to audit the financial statements kept in this state and investigate the property and funds of any corporation and of any subsidiary corporation thereof, domestic or foreign, keeping records in this state and to report thereon in such manner as the court may direct. . . (c) All expenses of the investigation or audit shall be defrayed by the applicant unless the court orders them to be paid or shared by the corporation.”

Petitioners argue that the Temple should pay for the cost of the inspection and accounting based on their contention that the records are disorganized. Petitioners have not submitted any evidence to show that the Temple’s records are disorganized or that directors have failed to maintain Temple records. Accordingly, the request that the Temple pay for the cost of the inspection and accounting is DENIED.

Reasonable costs and expenses:

Corporations Code sections 6336 provides that: “In any action or proceeding under this article, and except as required by Section 6331, if the court finds the failure of the corporation to comply with a proper demand thereunder was without justification, the court may award the member reasonable costs and expenses, including reasonable attorneys' fees, in connection with such action or proceeding.”

The Temple did agree to allow inspection and attempted to comply with the demand. Accordingly, the request for costs and expenses is DENIED.

Moving party to give notice.

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