Judge Mary H. Strobel, Case 21STCP02028 2022-08-25 Tentative Ruling

Petitioners Glendale Chapter of the Armenian Cultural Foundation (“ACF-Glendale”) and North Hollywood Chapter of the Armenian Cultural Foundation (“ACF-NH”) (collectively “Petitioners”) petition for a writ of ordinary mandate directing Respondent Armenian Cultural Foundation (“Respondent” or “ACF”) to permit Petitioner to inspect and copy the following documents:

(1) The minutes of the proceedings of the members of ACF, the board of directors of ACF and any committees of the board of directors of ACF for the time period January 1, 2018 to the present;

(2) The accounting books and records of ACF for the time period December 28, 2020 to the present;

(4) The articles of incorporation and the bylaws of ACF. (Pet. p. 7, Prayer ¶ 1.)

In their opening brief, Petitioners state that their demands to inspect ACF’s minutes, articles of incorporation, and bylaws have been made moot by certain “post-filing admission[s]” allegedly made by ACF. (Opening Brief (“OB”) 4:17-26, 7:25-27, 8:18-20.) In reply, Petitioners state that ACF “has produced a list of all current members” and thus Petitioners’ demand to inspect a member list is also “moot.” (Reply 12.) Thus, as so narrowed by Petitioners, the petition is limited to the demands for inspections of ACF’s accounting books and records for the time period December 28, 2020 to the present.

Respondent’s Request for Judicial Notice (“RJN”) Exhibits 19, 5, 7, 8, A, and 6 – Granted as to the existence of all of these records. Denied as to the truth of hearsay statements therein, including any factual findings made by the trial court in Dimejian et al. v. Armenian Revolutionary Federation – Dashnaktsutyun Western, U.S.A. et al. (Case No. 21STCP0785).

Petitioners’ objection to judicial notice of the truth of fact findings in Dimejian is sustained. (See Steed v. Dept. of Consumer Affairs (2012) 204 Cal.App.4th 112, 120 [“Judicial notice is properly taken of the existence of a factual finding in another proceeding, but not of the truth of that finding.”].)

Respondent cites Day v. Sharp (1975) 50 Cal.App.3d 904, 914 for the proposition that the court may take judicial notice of the “truth” of “findings of fact” from a court ruling. (RJN at 3.) More recent published, appellate decisions have disagreed with Day v. Sharp and hold that judicial notice of the truth of court fact findings, including after an adversarial hearing, is improper. (See generally Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-65 [“We find no sound legal basis for that particular portion of the rule [discussed Day v. Sharp], and we decline to follow it here.”].) To the extent there is a split in authority, the court finds persuasive the position from Steed and Sosinksy and will follow it here.

(5) Sustained as to “I understand that Mr. Kazandjian has recently acknowledged in verified discovery responses his involvement in the theft”. Overruled as to remainder.

ACF-Glendale and ACF-NH are unincorporated associations. (Pet. ¶¶ 1, 4; Ans. ¶¶ 1, 4.)

ACF is a California nonprofit Public Benefit Corporation incorporated in 1976. ACF is affiliated with Armenian Revolutionary Federation-Dashnaktsutyun Western U.S.A., a California Mutual Benefit Corporation (“ARFDW”). (Izmirlian Decl. ¶ 2; see generally Respondent’s Compendium of Exhibits (“Resp. Comp.”) Exh. 19.)

The operative version of the ACF bylaws (“Bylaws”) were adopted in September 1980. (Kazandjian Decl. ¶¶ 3-4, Exh. A, J; Baronian Decl. ¶¶ 3-4, Exh. A, I.) The Bylaws provide that ACF “shall have one class of member. This class shall consist of various chapters which have been authorized by the existing chapter members.” (Id. Exh. A, p. 17, Art. II, §1.) The Bylaws stated that each “authorized chapter” shall have voting rights. (Id. Art. II, § 2.) As of the adoption of the Bylaws in 1980, there were 12 members of ACF, including chapters in Glendale and North Hollywood. (Id. at p. 27, Art. XII.)

Among other things, the Bylaws set forth the procedure for conducting elections, including the requirements for providing notice of the meeting at which the election will occur. (Id. at Art. III and IV.) The Bylaws also state that membership of a chapter “shall terminate … on the failure of the chapter to pay any annual dues as may be determined by the Board of Directors for that year.” (Id. at Art. II, § 7.) The Bylaws also provide that: “All books and records of the corporation may be inspected by any member of a chapter, or his agent or attorney for any proper purpose at any reasonable time.” (Id. at p. 26, Art. VIII.)

On December 28, 2020, ARFDW held an emergency meeting at which it elected a new Board of Directors. Respondent ACF has taken the position that the same election also served to elect the same members to the ACF Board of Directors. (Baronian Decl. ¶ 6; Izmirlian Decl. ¶¶ 2-3; Resp. Comp. Exh. 19 at ACF-00680 – ACF-687.)

Petitioners, in contrast, state that this alleged sharing of a board violates ACF’s bylaws. (Reply 9.) Petitioners state that “there is no Board of Directors for 2022 (or 2021) because ACF has failed to hold an election. (This is the subject of another action pending in this Court, Case No. 22STCP02069.)” (Reply 9.) Petitioners also contend that they were not given notice of this election, as required by the Bylaws. (Kazandjian Decl. ¶ 6; Baronian Decl. ¶ 6.)

On April 30, 2021, purportedly on behalf of ACF-Glendale and ACF-NH, Bedig Kazandjian and Levon Baronian served demands on ACF to inspect ACF’s records. Specifically, the demands sought inspection of the records specified in the prayer for relief in Petitioner’s petition, including accounting records and the record of all members’ names, addresses, and voting rights. Petitioners submit Chapter meeting minutes of ACF-Glendale and ACF-NH purportedly authorizing the inspection demands. (Kazandjian Decl. ¶ 9, Exh. L; Baronian Decl. ¶ 10, Exh. K.)

On May 25, 2021, ACF’s CEO, Avedik Izmirlian, executed a verification declaring under penalty of perjury that amended bylaws dated September 11, 2018, were the operative bylaws of ACF. (Kazandjian Decl. ¶ 5, Exh. C.) This verification was filed in a probate action in Superior Court of the County of San Francisco. (Ibid.)

The amended bylaws, unlike the operative Bylaws, state that ACF “shall have no voting members.” (Id. Exh. F to Exh. C, Art. IV, § 1.) In legal correspondence dated May 7, 2021, former counsel for ACF, William Choi, appears to have relied on the 2018 bylaws to deny the inspection demands made by ACF-Glendale on the grounds that ACF “does not have any statutory members.” (Kazandjian Decl. ¶ 9, Exh. D.)

On June 25, 2021, Petitioners filed the instant verified petition for writ of mandate to compel inspection of corporate documents. Respondent answered.

On August 7, 2021, in legal correspondence related to the instant action, counsel for ACF agreed to produce to Petitioners the operative bylaws of ACF. The bylaws produced were the 1980 Bylaws. (OB 7; Rosen Decl. ¶ 3, Exh. E.) In discovery responses in the instant action, verified on December 17, 2021, ACF also admitted that the 1980 Bylaws were the operative bylaws. (Id. ¶ 4, Exh. F; see also Resp. RJN p. 2, ¶ 5 [referring to operative bylaws from 1980].)

On November 24, 2021, in the San Francisco probate action, ACF filed a Notice of Errata which stated in pertinent part: “Objectors’ counsel made an error inadvertently attaching an incorrect copy of the Bylaws for the ACF. Objectors’ counsel attached a copy dated September 11, 2018, which was not adopted by the board of the ACF, and is thus not operative.” (Resp. RJN Exh. 6; Resp. Comp. Exh. 6.)

On May 28, 2021, Petitioners Aida Dimejian, Stepan Boyajian, and Khatchig Tazian, who are not parties to the instant action, filed a writ petition seeking a determination of the validity of the December 28, 2020, election of directors of ARFDW. The matter was assigned to Judge James Chalfant of Los Angeles Superior Court. (Resp. Compl. Exh. 19.)

On January 18, 2022, after a hearing, Judge Chalfant issued a lengthy ruling in which he denied the petition and found that the election was valid. Judge Chalfant also found that Petitioners, as well as the Bureau of the Armenian Revolutionary Federation (“Bureau”), had unclean hands and for that additional reason could not challenge the validity of the December 28, 2020, board election of ARFDW. (Resp. Compl. Exh. 19.)

According to the summary of Respondents’ evidence from Judge Chalfant’s ruling, the Armenian Revolutionary Federation (“ARF”) is a foreign political party that coordinates amongst various Armenian groups worldwide which share common missions. (Id. Exh. 19 at 8.) Bureau is an operational arm of ARF. (See Exh. 19 generally.) ARFDW-USA is separate entity and operates independently of ARF. (Id. at 8-9.)

In his ruling with respect to unclean hands, Judge Chalfant found inter alia that ARF’s Bureau and the Dimejian petitioners had unclean hands because they sought to interfere with the independence of ARFDW-USA in various ways. (Id. at 37.)

On or about July 9, 2021, after Petitioners made the inspection demands, ARFDW and ACF filed a federal RICO action against Armenian Revolutionary Federation WUSA, Inc., ACF Central WUSA, Inc., and multiple individuals, including Levon Baronian and Bedig Kazandjian. ARFDW and ACF filed a first amended complaint in the RICO action on September 7, 2021. (Oppo. 8-9; Resp. Compl. Exh. 5.) Levon Baronian and Bedig Kazandjian purportedly served the inspection demands in this case on behalf of ACF-NH and ACF-Glendale.

As summarized by the federal district court, ARFDW and ACF “allege Defendants engaged in several kinds of unlawful actions in order to ‘take control’ of ARFDW and ACF ‘by force,’ id. ¶ 80, including stealing funds from Plaintiffs’ bank accounts and issuing misleading communications to Plaintiffs’ members.” (Resp. Comp. Exh. 7 at ACF-00166; see detailed discussion of RICO allegations at ACF-00166 – ACF-00186.)

On November 24, 2021, the federal district court largely denied motions to dismiss filed by defendants in the RICO action, including Baronian and Kazandjian, finding that the Plaintiffs had pleaded sufficient facts to state a claim under the RICO statute. (Resp. Comp. Exh. 7, 8.) The court denied the motion to dismiss of Baronian and other defendants in full. (Exh. 7; see ACF-00163 and ACF-00185-186.) The court granted the motion to dismiss the RICO claims against Kazandjian “other than conspiracy” with leave to amend. The court found that the plaintiffs had not alleged that Kazandjian “engaged in the predicate acts of mail fraud or interstate transportation of stolen money,” but “they have plausibly alleged the Kazandjian Defendants committed RICO conspiracy.” (Exh. 7; ACF-00186.)

In its opposition, Respondent cites allegations from the federal RICO action and declarations submitted only in that action. (Oppo. 13-14, citing Resp. Compl. Exh. 5, 13.) The RICO Action has not been adjudicated through trial and the allegations have not been proven. The declarations from the federal RICO action were filed in July 2021 in federal court (i.e., a different court than Los Angeles Superior Court) and are hearsay, without exception. (See Resp. Compl. Exh. 9-14.) The court sustains Petitioners’ objections to this evidence. (See Court Ruling on Objection to Paragraph 14 of Elan Bloch Decl.) However, as discussed below, the filing of the RICO action against Baronian and Kazandjian has relevance to whether Petitioners have a proper purpose for the inspection demands, even if the allegations and evidence from the RICO action are not considered for their truth.

Writ Briefing; and Petitioners’ Summary of “Larger Dispute” Between the Parties

On July 8, 2022, Petitioners filed their opening brief in support of the instant writ petition and supporting evidence. The court has received Respondent’s opposition and opposing evidence, and Petitioners’ reply and reply evidence.

In the reply brief, Petitioners acknowledge a “larger dispute” between the parties: “[I]n a nutshell, Petitioners assert that: ARFDW was the Western U.S. representative of the Armenian Revolutionary Federation (‘ARF’); when ARFDW refused to comply with the ARF rules and proclamations, ARF properly recognized a new entity to act as the sole authorized Western U.S. representative of ARF; ARFDW has refused to accept this action and, in violation of its Bylaws and the ACF Bylaws, has improperly taken control over ACF; and that the funds and property purportedly controlled by ACF actually belong to the individual ACF Chapters and must be used to further the work of ARF. As a result, Petitioners believe Respondent’s faction are imposters and are improperly holding ACF hostage.” (Reply 3.)

According to Petitioners, “Respondent, on the other hand, asserts that: ARFDW is and has always been wholly unrelated to ARF; ARFDW is entitled to appoint the Board of Directors of ACF; and ACF is entitled to do what it wants with all the funds and property owned by the ACF Chapters even if those uses are unrelated to the work of ARF. In Respondent’s view, Petitioners’ faction are the imposters.” (Reply 3.)

The writ petition is brought pursuant to CCP section 1085 and Corporations Code section 6333. There are two essential requirements to the issuance of an ordinary writ of mandate: (1) a clear, present and ministerial duty on the part of the respondent, and (2) a clear, present and beneficial right on the part of the petitioner to the performance of that duty. (California Ass’n for Health Services at Home v. Department of Health Services (2007) 148 Cal.App.4th 696, 704.) “‘On questions of law arising in mandate proceedings, [the court] exercise[s] independent judgment.’” (Christensen v. Lightbourne (2017) 15 Cal.App.5th 1239, 1251.)

Corporations Code section 6333[1] provides in full: “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.”

Section 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 ….” (§ 6336(a).)

Generally, the petitioner “bears the burden of proof in a mandate proceeding brought under Code of Civil Procedure section 1085.” (California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1154.) However, “[a] corporation has the burden of proving that the member ‘will allow use of the information for purposes unrelated to the person's interest as a member.’” (Parker v. Tract No. 7260 Assn., Inc. (2017) 10 Cal.App.5th 24, 32.) The trial court exercises its independent judgment, including with respect to any fact findings, on the question of whether the member’s inspection demand is made “for a purpose reasonably related to such person's interests as a member.” (See Corp. Code §§ 6333, 6336 and Parker, supra.)

Respondent contends that Petitioners “lack standing or legal capacity” to make inspection demands on ACF or pursue this writ petition. (Oppo. 13-14.)[2] The court decides this threshold issue first.

To have standing to seek a writ of mandate, a party must be “beneficially interested.” (CCP § 1086.) “A petitioner is beneficially interested if he or she has some special interest to be served or some particular right to be preserved or protected over and above the interest held in common with the public at large.” (Rialto Citizens for Responsible Growth v. City of Rialto (2012) 208 Cal. App. 4th 899, 913.) Corporations Code section 6336 confers standing on a member of a corporation to petition the superior court to enforce the member’s demand for inspection of corporate records.

Respondent contends that ACF-Glendale lacks standing because Bedig Kazandjian, who served the inspection demands on behalf of ACF-Glendale, lacked authority to act on behalf of ACF-Glendale. (Oppo. 13-14.)

ACF-Glendale is a member of ACF and therefore could make inspection demands on ACF. (§ 6333.) ACF-Glendale is an unincorporated association. (Pet. ¶¶ 1, 4; Ans. ¶¶ 1, 4.) As of the adoption of the Bylaws in 1980, there were 12 members of ACF, including chapters in Glendale and North Hollywood. (Kazandjian Decl. Exh. A at p. 27, Art. XII.) It is reasonable to infer from the Bylaws that the Glendale chapter in the Bylaws refers to ACF-Glendale. (Ibid.) Moreover, in response to requests for admissions, Respondent admitted that “the Glendale Chapter of the ACF has historically ben a member of [ACF].” (Rosen Decl. Exh. F, RFA 10.) In opposition, Respondent does not dispute ACF-Glendale’s authority to make inspection demands in a general sense, but rather asserts that the inspection demands in this case were improperly made by “a faction led by Bedig Kazandjian” that were “displaced” from the board of ACF-Glendale. (See Rosen Decl. Exh. E [August 7, 2021, letter from Respondent’s counsel].)

With respect to this issue of whether the inspection demands were authorized by ACF-Glendale, Kazandjian declares that he has been on the Board of Directors of ACF-Glendale since August 2019. (Kazandjian Decl. ¶ 2.) He declares that on April 30, 2021, on behalf of ACF-Glendale, he served demands on ACF to inspect ACF’s records. Kazandjian authenticates Chapter meeting minutes of ACF-Glendale purportedly authorizing him to act as ACF-Glendale’s agent, serve the inspection demands on ACF, and copy the records. (Kazandjian Decl. ¶ 9, Exh. L.) In addition to Kazandjian, the minutes state that the inspection demands were authorized by Board members Janet Avedian, Alfrik Bandaryan, Jackie Tomasian, and Vache Thomassian. (Ibid.) The minutes state that the inspection of ACF’s records is necessary “to investigate the lack of transparency on how ACF money is being spent and how ACF if being governed under its bylaws.” (Ibid.) Petitioners submit evidence that ACF-Glendale has contributed more than $170,000 to ACF since 2018. (Kazandjian Decl. ¶ 7.)

Respondent cites the Izmirlian Declaration to assert that Kazandjian lacks authority to act for ACF-Glendale. (Oppo. 13, citing Izmirlian Delc. ¶ 14.) Izmirlian is the CEO of ACF and, in that capacity, has “organizational and administrative oversight over each of ACF’s chapters,” including ACF-Glendale and ACF-NH. (Izmirlian Decl. ¶ 1.) He declares that the meeting minutes submitted by Kazandjian do not reflect the true membership of ACF-Glendale’s Board and that “ACF-Glendale’s petition is wholly unauthorized by any legitimate corporate representative or chapter of ACF.” (Izmirlian Decl. ¶¶ 11, 14.) He states that Kazandjian was not the chairperson of ACF-Glendale in Summer of 2021, and that all board members specified on the minutes authorizing the inspection demands “are also not members of ACF-Glendale’s board.” (Ibid.) Because Izmirlian declares that he has “organizational and administrative oversight over each of ACF’s chapters,” the court finds sufficient foundation for this testimony. The court overrules Petitioners’ evidentiary objections to these parts of paragraphs 11 and 14 of the Izmirlian declaration. Petitioners’ objections go to the weight to be given such testimony, not admissibility.

Respondent also cites allegations from the federal RICO action and declarations submitted in that action. (Oppo. 13-14, citing Resp. Compl. Exh. 5, 13.) The RICO Action has not been adjudicated through trial and the allegations have not been proven. The declarations from the federal RICO action were filed in July 2021 in a federal district court and are hearsay, without exception. (See Resp. Compl. Exh. 9-14.) The court has sustained Petitioners’ evidentiary objections to those declarations.

Respondent asserts that Kazandjian “has admitted to stealing from ACF and is on video stealing a computer from the Glendale computer that contained financial information for ACF-Glendale that ACF needed in order to reconcile its books.” (Oppo. 14, citing Resp. Compl. Exh. 18, 13 ¶ 12.) In verified discovery responses in the RICO action, Bedig Kazandjian admitted that, on February 27, 2021, he “removed files, computers, and stationary from the Gomideh room and accounting room [from the ACF Glendale Youth Center] for safekeeping, because they were in danger of being misappropriated by Plaintiffs, who falsely claim to possess authority as the ARF regional central committee under an invalid set of bylaws. They are currently kept in a secure location…. [A]s the chair of the local chapter, Defendant was concerned about the well-being of the Center. Moreover, given the ill intention of the illegal meeting organizers, Defendant decided that it would be prudent to safeguard all the archives, files, and computers in the offices. As such, Defendant made sure everything was put into boxes and hauled away for safekeeping.” (Bloch Decl. ¶ 24, Exh. 18 at Supplemental Responses to Special Interrogatories Nos. 2 and 4.) Kazandjian’s discovery responses acknowledge a dispute regarding the leadership of ACF-Glendale and raise questions about whether Kazandjian was actually chairperson in April 2021 when the inspection demands were purportedly authorized.

Respondent also cites the declaration of Karekin Karazian, who declares that she has been chairperson of the Board of Directors of ACF-Glendale since February 2021. Karazian declares that Kazandjian was not chairperson in April 2021 when the inspection demands were served and was not authorized to act on behalf of ACF-Glendale. She further declares that “ACF-Glendale has not authorized the writ petition to be filed in this case and has not retained the attorneys who filed it or are currently pursuing it.” (Karazian Decl. ¶ 3.) She requests that the court dismiss this action.

There is a factual conflict between the Kazandjian declaration and minutes attached to the inspection demands, on the one hand, and the Karazian and Izmirlian declarations, on the other. Respondent has not moved to dismiss the petition on the grounds that ACF-Glendale filed it without authorization and it is improper for Karazian to make a request for dismissal in her declaration. Nonetheless, Respondent pleaded lack of standing as its first affirmative defense and the issue is properly raised in the opposition.

Exercising its independent judgment on the record, the court finds that ACF-Glendale is a member of ACF and could have made inspection demands on ACF. However, based on the evidence summarized above, the court has substantial doubt as to whether the minutes attached to the inspection demands reflect a proper vote of the ACF-Glendale Board to authorize the inspection demands. The court also has substantial questions as to whether ACF-Glendale was authorized by its Board to file this writ action enforcing the inspection demands.

While Karazian does not discuss the other alleged board members specified in the minutes purporting to authorize the inspection demands, her testimony, along with that of Izmirlian, supports a conclusion that the minutes do not reflect a proper vote of the board of ACF-Glendale to authorize the inspection demands. Significantly to the court, Petitioners do not respond to the Karazian declaration in the reply papers. They have not submitted a declaration from Kazandjian disputing Karazian’s testimony that he was replaced as chairperson in February 2021; that he was not chairperson when the inspection demands were purportedly authorized; and that ACF-Glendale has not filed this petition with authority of its actual Board of Directors. Nor does Kazandjian explain his RICO discovery responses, which are circumstantial evidence in support of Karazian’s testimony that Kazandjian was replaced from the ACF-Glendale Board in February 2021. The court credits the Karazian and corroborative Izmirlian declaration over the Kazandjian declaration on the issue of whether the inspection demands and this writ action were authorized by the Board of ACF-Glendale.

In the reply brief, Petitioners simply cite to the minutes purporting to authorize the inspection demands. (Reply 10.) They do not address the declarations stating that those minutes do not reflect a proper vote of the ACF-Glendale Board. (See Sehulster Tunnels/Pre-Con v. Traylor Brothers, Inc. (2003) 111 Cal.App.4th 1328, 1345, fn. 16 [failure to address point is “equivalent to a concession”].) Moreover, if Kazandjian was not chairperson of ACF-Glendale in April 2021, as testified by Karazian and Izmirlian, then the minutes attached to the inspection demands are inaccurate and inherently suspect.

On this briefing and record, Respondent has sufficiently proven its defense for lack of standing. This is an equitable writ proceeding and the court finds it would be inequitable to order inspection of ACF’s accounting records given the substantial doubt as to whether the inspection demands and this writ action were properly authorized by the board of ACF-Glendale. Petitioner ACF-Glendale’s evidence does not preponderate on the issue of whether ACF-Glendale made a proper demand for inspection.

Respondent contends that ACF-NH lacks standing to make inspection demands or prosecute this writ action because ACF-NH “was terminated [as a member of ACF] due to failure to pay dues.” (Oppo. 14.)

Respondent has not disputed that ACF-NH was a member of ACF when the inspection demands were served, pursuant to the Bylaws. The court finds sufficient evidence that ACF-NH was a member of ACF and had statutory authority as a member to make inspection demands. (See Kazandjian Decl. Exh. A at p. 27, Art. XII; Baronian Decl. ¶ 10, Exh. K [minutes authorizing inspection demands]; Rosen Decl. Exh. F, RFA 11 [RFA admitting historic membership of ACF-NH in ACF].)

Respondent cites the declaration of Krikor Topalian, the CFO of ACF. He declares that ACH-NH was terminated as a member of ACF in July 2022 for failure to pay outstanding membership dues of $217,429. (Topalian Decl. ¶ 6; see also Grigorian Decl. ¶¶ 2-11 and Exh. 23-24 [bookkeeper discussing itemized accounting of amounts due].)

In reply, Petitioners submit evidence that ACF served a termination letter on ACF-NH on July 7, 2022, the day before Petitioners filed their opening brief. (Reply Baronian Decl. ¶ 3, Exh. P.) Baronian declares that “[b]efore receiving the termination letter, ACF-NH was not provided with any notice of the impending termination and was not provided with any opportunity to be heard regarding the impending termination.” (Ibid.)

In reply, Petitioners contend that the termination was invalid because it did not comply with Corporations Code section 5341, which states in pertinent part:

(a) No member may be expelled or suspended, and no membership or membership rights may be terminated or suspended, except according to procedures satisfying the requirements of this section. An expulsion, termination or suspension not in accord with this section shall be void and without effect.

(b) Any expulsion, suspension or termination must be done in good faith and in a fair and reasonable manner. Any procedure which conforms to the requirements of subdivision (c) is fair and reasonable, but a court may also find other procedures to be fair and reasonable when the full circumstances of the suspension, termination, or expulsion are considered.

(1) The provisions of the procedure have been set forth in the articles or bylaws, or copies of such provisions are sent annually to all the members as required by the articles or bylaws;

(2) It provides the giving of 15 days prior notice of the expulsion, suspension or termination and the reasons therefor; and

(3) It provides an opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion, suspension or termination by a person or body authorized to decide that the proposed expulsion, termination or suspension not take place.

(d) Any notice required under this section may be given by any method reasonably calculated to provide actual notice. Any notice given by mail must be given by first-class or registered mail sent to the last address of the member shown on the corporation's records.

(e) Any action challenging an expulsion, suspension or termination of membership, including any claim alleging defective notice, must be commenced within one year after the date of the expulsion, suspension or termination. In the event such an action is successful the court may order any relief, including reinstatement, it finds equitable under the circumstances, but no vote of the members or of the board may be set aside solely because a person was at the time of the vote wrongfully excluded by virtue of the challenged expulsion, suspension or termination, unless the court finds further that the wrongful expulsion, suspension or termination was in bad faith and for the purpose, and with the effect, of wrongfully excluding the member from the vote or from the meeting at which the vote took place, so as to affect the outcome of the vote. (Corp. Code § 5341.)

Petitioners make a plausible argument that the termination of ACH-NH did not comply with section 5341 because the termination procedure was not “fair and reasonable.” The Bylaws state that membership of a chapter “shall terminate … on the failure of the chapter to pay any annual dues as may be determined by the Board of Directors for that year.” (Kazandjian Decl. Exh. A at Art. II, § 7.) However, the Bylaws themselves do not specify any procedure for the termination. Furthermore, there is no evidence that ACF gave ACF-NH “15 days prior notice of the expulsion, suspension or termination and the reasons therefor; and … provide[d] an opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the … termination by a person or body authorized to decide that the proposed … termination … not take place.” (§ 5341(c).) Section 5341(a) also states that a termination that is not “fair and reasonable” “shall be void and without effect.” Further, the termination of ACF-NH raises concerns whether the termination was done “in good faith” and in “a fair and reasonable manner.”

These arguments about compliance with section 5341 were raised in reply. Respondent should respond to them at the hearing.

Subject to argument, the court concludes that the evidence preponderates that termination of ACF-NH violates section 5341; thus ACF-NH has standing to inspect ACF’s records.

Respondent contends that Petitioners lack a proper purpose for the inspection demands because “Petitioners are seeking documents through this petition to assist their confederates in several separate legal disputes or as part of an ongoing campaign of defamation.” (Oppo. 11.)

“A member's right of inspection is limited to purposes reasonably related to the member's interests as a member…. ‘This limitation is always subject to judicial review to determine whether a lawful purpose exists.’ [Citation.] A corporation has the burden of proving that the member ‘will allow use of the information for purposes unrelated to the person's interest as a member.’ [Citation.] …. Mere speculation that the member will use the information for an improper purpose is not sufficient to nullify inspection rights; any suspicion must be based on adequate facts in order to justify denial of inspection.” (Parker v. Tract No. 7260 Assn., Inc. (2017) 10 Cal.App.5th 24, 31-32.)

In Parker, a homeowners association (“HOA”) brought suit against an entity called Fix the City, which the HOA believed misappropriated the HOA’s funds for its own ends, thus “usurping [the HOA’s] corporate opportunity.” (Parker, supra, 10 Cal.App.5th at 28.) The HOA believed that Parker, a former treasurer of the HOA, was involved with Fix the City’s wrongdoing. (Ibid.) Parker then submitted an inspection request to the HOA under California Corporations Code, Section 8330(a), which limits inspection right to purposes reasonably related to the HOA member's interests as a member. (Ibid.) The Court of Appeal held that substantial evidence supported the trial court’s finding that Parker sought records from the HOA for an improper purpose. (Id. at 32.) The Court held that Parker sought these records “to defend Fix the City against a complaint that he knew was coming,” and not for “purposes reasonably related to [Parker’s] interests as a member.” (Id. at 31-33.)

Petitioners submit evidence that ACF-Glendale has contributed more than $170,000 to ACF since 2018, and that ACF-NH has contributed approximately $25,000. (Kazandjian Decl. ¶ 7; Baronian decl. ¶7.) ACF admitted in its answer that “chapters of the ACF have an interest in how ACF spends funds and in ACF’s operations, pursuant to its bylaws.” (Ans. ¶ 3.)

Petitioners claim to “have learned that ACF is carelessly distributing cash without sufficient accounting controls in place—conduct that could result in ACF losing its 501(c)(3) status.” (OB 12, citing Exh. G.) Thus, Kazandjian and Baronian both declare that in April 2021, Petitioners were “provided with a copy of a video depicting members of Board of ACF handing out cash to the general public in Armenia. A true and correct copy of the video is attached hereto as Exhibit G.” (Kazandjian Decl. ¶ 7, Exh. G; Baronian Decl. ¶ 7, Exh. G.) The audio for the video submitted as Exhibit G appears to be in Armenian and Petitioners have not submitted a translation.

Respondent does not dispute that the video depicts a representative of ACF or its affiliate, ACF Western USA, Inc., delivering “financial aid” to persons in Armenia. Specifically, the CFO of ACF, Krikor Topalian, declares:

What the video actually depicts is urgent financial aid being delivered by ACF’s members to the families of 55 wounded soldiers in Armenia. Many of these individuals, like the vast majority of ACF’s aid recipients, have limited means and live in small villages in Armenia, without access to bank accounts. The nearest banks are often miles away and too far for these individuals to travel. For this practical reason, aid in Armenia is customarily provided to recipients in cash. However, contrary to the assertions made by Petitioners, ACF and its affiliate, ACF Western USA, Inc., account for cash distributions in these types of circumstances through an internal receipt and invoice ledger. The entries that correspond to the activities in the video are attached to Respondents’ compendium of evidence as Exhibit 21.

Remarkably, however, the charitable donations to impoverished family members of wounded soldiers depicted in the video - which Petitioners claim substantiate their books and records request in this matter - are entirely misdirected. In fact, these charitable contributions were made by ACF Western USA, Inc. and not the ACF, and therefore would not even be contained in the records sought in this action in any event. (Topalian Decl. ¶¶ 2-3, Exh. 21.)

Exhibit 21, cited by Topalian as a ledger of the distributions, is written in a non-English language and a translation has not been provided. The numbering in Exhibit 21 suggests that there are two spreadsheets, one with 32 entries and another with 31 entries. The chart provided on page 2 of Respondent’s Compendium of Evidence describes Exhibit 21 as an “ACF Internal Accounting” and not an internal accounting of affiliate ACF Western USA, Inc. While Topalian claims that the funds were distributed by ACF Western USA, Inc., he also states that Exhibit 21 is an accounting of such distributions. These statements are somewhat contradictory. Topalian does not explain why ACF would have an accounting of the distributions if they were made by ACF Western USA, Inc.

Respondent relies in part on findings made by Judge Chalfant in the Dimejian action and allegations and evidence from the federal RICO Action. (Resp. Compl. Exh. 5, 7-8, 19.) As reflected in the court’s rulings on Petitioners’ evidentiary objections, the court does not rely on the truth of such findings, allegations, or evidence. However, even if the truth of such matters is not considered, the existence of Dimejian and the RICO action have some relevance, as discussed below.

In a sworn declaration, Respondent’s attorney Elan Bloch declares: “On August 7, 2021, after the Petition was filed, but before Respondent appeared in the action, I sent counsel for Petitioners a letter attempting to resolve the issues raised in the petition, and the requests made by the individuals purporting to represent the named Petitioners in this action…. , Petitioners’ Counsel. D. Steve Cameron, expressly informed me during telephonic meet and confer efforts that the purpose of eliciting information from ACF was to disseminate such information to the membership of ACF’s affiliate, ARF Dashnaktsutyun, Western, U.S.A. (‘ARFDW’), and it was apparent to me that such efforts were designed to elicit information that could be used to continue to the campaign of character assassination that was the subject of a pending RICO Action … and charge the Board of Directors of ARFDW, which is the same board of directors as ACF, with misconduct….” (Bloch Decl. ¶¶ 3-4.)

Counsel Bloch describes other lawsuits filed by counsel for Petitioners, as follows: “[I]n the span of three weeks, during the same period of time as Counsel for Petitioners from Murphy Rosen LLP substituted in as counsel of record in this action for D. Steve Cameron, Petitioners’ Counsel from Murphy Rosen LLP also filed or are now counsel of record in four new actions seeking (i) to Quiet Title in two real properties in the name of individual chapters of the ACF as against the interests of ACF [See La Crescenta Chapter of the Armenian Cultural Foundation v. ACF, LASC Case No. 22GDCV00275, filed June 1, 2022 and San Francisco Chapter of the Armenian Cultural Foundation v. ACF, County of Sacramento Superior Court, Case No. 34-2022-00321931, filed June 15, 2022]; (ii) to compel an election of the Board of Directors of ACF (See Glendale Chapter of the Armenian Cultural Foundation v. ACF, LASC Case No. 22STCP02069, filed on June 1, 2022), ; and, (iii) declaratory relief of matters pertaining to the governance of ACF’s affiliate ARFDW, which is the subject of a Demurrer on res judicata grounds, on the basis that such issues were fully resolved in the Dimejian action (See Jarchafjian, et al. v. ARFDW, et al., LASC Case No. 22STCV17652, filed on May 27, 2022).” (Bloch Decl. ¶ 30.)

The court has not found other evidence cited by Respondent to be material to adjudication of the proper purpose issue. As one example, ACF’s CFO, Krikor Topalian, declares that “cruel and defamatory statements [were] made about me anonymously online (as depicted in Ex. 2), accusing me of an intricate tax scheme using the ACF.” (Topalian Decl. ¶ 9.) While Respondent asserts that Petitioners used documents obtained in these proceedings to post such accusations, Topalian only states and the evidence only shows that the post was made anonymously. (Oppo. 3:21-22.) In addition, some of Respondent’s evidence was not admissible, as reflected in the court’s rulings on evidentiary objections.

Analysis – Respondent Has Proven that Petitioner ACF-Glendale Seeks Corporate Records for an Improper Purpose

In opposition, Respondent contends that the reasons asserted by Petitioners for the inspection demands are “pretexual.” (Oppo. 1-4, 9-12.) Respondent contends that, in effect, that Petitioners are improperly seeking records of ACF to promote their broader interests in the dispute over control of ARFDW, as reflected in the RICO and Dimejian actions. (Oppo. 11.)

As Petitioners concede, this writ petition is brought in the context of a larger dispute over control of ARFDW and ACF. (Reply 3.) That larger dispute is, to say the least, complex. The court does not resolve that larger dispute in this narrow action concerning demands for inspection of corporate records. Nonetheless, the court must consider the entire evidentiary record, including the other lawsuits filed concerning control of ARFDW, and determine whether the inspection demands made by Petitioners in April 2021 are “reasonably related” to their interests as members of ACF.

The timeline of events, while not dispositive, suggests a potentially improper purpose for the inspection demands. The inspection demands were made on April 30, 2021. (Pet. Exh. K, L.) Respondent states that “[i]t is no coincidence that the attorney that initiated this writ—D. Steve Cameron—is the same as the attorney that was counsel-of-record for petitioners in Dimejian.” (Oppo. 2.) Respondent does not cite the record in support. However, the court judicially notices that Dimejian was filed by attorney D. Steve Cameron, on May 28, 2021. (Court File in LASC Case No. 21STCP01785.) The petition in this action was filed on June 25, 2021, also by attorney D. Steve Cameron. (Court File in LASC Case No. 21STCP02028.) Attorney David Rosen substituted as Petitioners’ counsel in this action on June 10, 2022, shortly before the opening writ brief was filed in July 2022. The court finds it significant that the inspection demands were made shortly before Dimejian was filed; and that Petitioners’ action was initiated by the same attorney that filed Dimejian and less than a month after Dimejian was filed. While inconclusive, these circumstances suggest a potential overlap in interests between Petitioners and the Dimejian petitioners and also a potential that the demands were made to support the petitioners in Dimejian or for other purposes unrelated to Petitioners’ interests in ACF.

That inference of overlapping interests is supported by other evidence in the record. In Dimejian, the petitioners sought a determination of the validity of the December 28, 2020, election of the directors of ARFDW. While the petitioners raised procedural issues regarding the validity of the election, they also argued that “ARFDW-USA is in a battle for control between two factions, one that views the Bureau as a threat and the other than recognizes its control.” The Dimejian petitioners were on the side of the Bureau. (See Resp. Compl. Exh. 19 generally and at ACF-00694.) In the petition in this case, Petitioners cite to Dimejian and state that they, like the Dimejian petitioners, believed that the December 28, 2020, board election for ARFDW was invalid. (Pet. ¶¶ 17-18.) Petitioners argue that the instant writ petition is “related” to Dimejian “[t]o the extent that those controlling ACF claim to have achieved their control of ACF through [the December 28, 2020] meeting.” (Pet. ¶ 18.) In their writ briefing and declarations, Petitioners acknowledge that they align with the Dimejian petitioners in the “larger dispute” over control of ARFDW and by extension ACF. (Reply 3.) For instance, similar to arguments made by the Dimejian petitioners (see Exh. 19, ACF-00696-709), Petitioners assert that “ARFDW refused to comply with the ARF rules and proclamations” and improperly held the “purported” December 28, 2020, election. (Reply 3; Kazandjian Decl. ¶ 6.) It is reasonable to conclude from this evidence that Petitioners made the inspection demands to support interests in the “larger dispute” over control of ARFDW.

This conclusion is also supported by the Bloch declaration (quoted above) in which Bloch declares Cameron admitted that the inspection demands were made for a purpose unrelated to Petitioners’ interests as members of ACF. Significantly, Petitioners do not respond to or rebut this evidence. The court finds this admission, as testified by attorney Bloch and not rebutted by any reply declaration, to be highly probative of an improper purpose of the inspection demands.

The evidence related to standing of ACF-Glendale is also relevant to the court’s analysis of the purpose of the inspection demands. Kazandjian claims he was chairperson of ACF-Glendale in April 2021, when the inspection demands were made. However, both Irzmirlian and Karazian declare that Kazandjian had been replaced as chairperson in or about February 2021. Karazian further declares: “After I replaced Mr. Kazandjian, he engaged in series of highly disruptive acts, including removing a computer containing ACF-Glendale’s chapter level financial information.” (Karazian Decl. ¶ 2.) That assertion is corroborated by Kazandjian’s responses to discovery in the RICO action. Kazandjian admitted that, on February 27, 2021, he “removed files, computers, and stationary from the Gomideh room and accounting room [from the ACF Glendale Youth Center] for safekeeping, because they were in danger of being misappropriated by Plaintiffs, who falsely claim to possess authority as the ARF regional central committee under an invalid set of bylaws.” (Bloch Decl. ¶ 24, Exh. 18 at Supplemental Responses to Special Interrogatories Nos. 2 and 4.) Kazandjian does not respond to or explain this evidence in a reply declaration. This evidence suggests that the inspection demands were made not for a purpose related to Petitioner ACF-Glendale’s interests in ACF, but rather for purposes related to the “larger dispute” over control of ARFDW and the various chapters of ACF.

For the reasons discussed above, the court does not consider allegations or evidence from the RICO action for their truth. Nor does the federal court’s ruling on a motion to dismiss reflect any adjudication of the evidence in the RICO action. However, the mere filing and existence of the RICO action is generally consistent with the court’s conclusion that the inspection demands of Petitioners were made to further interests in a “larger dispute” over control of ARFDW. As summarized by the federal district court, ARFDW and ACF “allege Defendants engaged in several kinds of unlawful actions in order to ‘take control’ of ARFDW and ACF ‘by force,’ id. ¶ 80, including stealing funds from Plaintiffs’ bank accounts and issuing misleading communications to Plaintiffs’ members.” (Resp. Comp. Exh. 7 at ACF-00166; see detailed discussion of RICO allegations at ACF-00166 – ACF-00186.) The court found that the plaintiffs had stated RICO claims, including against Baronian and Kazandjian, who served the inspection demands in this case purportedly on behalf of Petitioners.

Based on the foregoing, the court finds that Petitioner ACF-Glendale and ACF-NH made the inspection demands to support interests in the “larger dispute” over control of ARFDW. Making inspection demands for that purpose is improper because it does not relate to ACF-Glendale or ACF-NH’s interests as members of ACF. (See Parker v. Tract No. 7260 Assn., Inc. (2017) 10 Cal.App.5th 24, 31-33.)

The other alleged purposes for the inspection demand do not undermine the court’s conclusion. As a preliminary matter, the Court of Appeal has held that a member of a corporation that makes an inspection demand for an improper purpose cannot circumvent section 6333 by also asserting a proper purpose for the demand. (Parker, supra, 10 Cal.App.5^th at 33 and fn. 2.) Accordingly, in light of the court’s conclusion that the demands were made for an improper purpose, the other alleged purposes for the inspection demands are not determinative.

Petitioners assert that ARFDW has since “improperly taken control over ACF.” (Reply 3.) Kazandjian and Baronian declare that they made inspection demands for ACF minutes “in order to determine whether and to what extent the purported election of the ACF Board [on December 28, 2020] failed to comply with the Bylaws of ACF.” (See Kazandjian Decl. ¶ 6.) That could be a proper basis for inspection of ACF minutes. However, based on statements made by ACF in this action, Petitioners indicate that the demand for minutes is “moot.” (Reply 12.) The writ petition has been narrowed to a demand for inspection of accounting books and records of ACF for the time period December 28, 2020 to the present. Petitioners do not show that review of ACF’s accounting books and records for that time period is relevant to the question of whether ACF complied with its bylaws in a board election on December 28, 2020.

Petitioners assert that in April 2021 they “learned that ACF is carelessly distributing cash without sufficient accounting controls in place—conduct that could result in ACF losing its 501(c)(3) status. (Ex. G.) Petitioners are entitled to know how its funds are being used and are entitled to inspect the books and records for this purpose.” (OB 12; see Kazandjian Decl. ¶ 7; Baronian Decl. ¶ 7.) While members of ACF do have an interest in learning how their contributions are being used, the stronger inference from the entire record is that Petitioners did not make the inspection demands for that purpose. Rather, as discussed, Petitioners made the inspection demands to support interests in the larger dispute over control of ARFDW.

Petitioners state that they seek to inspect ACF accounting books and records to assess the validity of Respondent’s claim that ACF-NH failed to pay its dues. (OB 12.) The demand, however, substantially preceded the attempted termination. This secondary purpose would not appear to overcome an otherwise improper demand. (Parker, supra, 10 Cal.App.5^th at 33 and fn. 2.)

Based on the foregoing, Petitioner ACF-Glendale lacks standing to enforce the inspection demands in this writ action, but ACF-NH has standing. However, the court finds that the demands were made for purposes not reasonably related to ACF-NH’s interest as a member of ACF. Accordingly, the demands were made for an improper purpose and cannot be enforced. (§ 6333; Parker, supra, 10 Cal.App.5^th at 31-33.)

While all remaining issues are moot in light of the court’s conclusions from above, the court provides the following brief analysis for benefit of oral argument:

Respondent contends that “Petitioner’s own conduct made it impossible for ACF to prepare a complete set of financial records. (See Karazian Decl. at ¶ 2; Topalian Decl. ¶ 4; Izmirlian ¶ 13.)” (Oppo. 12.) The cited evidence does not prove, by the preponderance of the evidence, that any actions of Petitioners or their representatives actually caused Respondent to be unable to produce accounting books and records. Moreover, even if Respondent cannot provide a “complete” set of records, it could permit inspection of the records available.

Section 6338(a) provides, in pertinent part: “A membership list is a corporate asset. Without consent of the board a membership list or any part thereof may not be obtained or used by any person for any purpose not reasonably related to a member's interest as a member.”

In reply, Petitioners concede that ACF “has produced a list of all current members, [and] Petitioners’ inspection demands for these items are moot.” (Reply 12.) The court accepts that concession.

Respondent argues that Petitioners refused to agree to a protective order and that this justifies non-compliance with the inspection demands. (Oppo. 14.) Petitioners argue that they justifiably refused to agree to Respondent’s proposed protective order because it is an “attorney’s eyes only” protective order. (Reply 10.) While the court may impose “just and proper conditions” on inspection (see § 6336(a)), an attorney’s eyes only protective order would appear to be an ineffectual remedy, as it would deprive the corporate members of access to the records. In any event, the protective order offered by Respondent is irrelevant to adjudication of the standing and “proper purpose” issues discussed above.

Respondent contends that Petitioners have unclean hands because “[t]heir true motive, as seen by the totality of circumstances, is to smear the reputations of officers and directors of ACF and ARFDW as part of a campaign to misappropriate control over these charitable corporations by any means possible.” (Oppo. 15.) Respondent asserts that “Petitioners and their confederates from the Bureau have disrupted the democratic functioning of two non-profit charitable corporations, ARFDW and ACF; destroyed evidence; misappropriated resources; impersonated entities and individuals; and taken affirmative steps to intimidate or defame those that oppose them.” (Oppo. 15.)

“It is a fundamental principle of equity that he who comes into equity must do so with clean hands.” (Bennett v. Lew (1984) 151 Cal.App.3d 1177, 1186-87; see also Lynn v. Duckel (1956) 46 Cal.2d 845, 850.)

Respondent does not prove a defense for unclean hands because it relies primarily on unproven, hearsay allegations from the RICO action and the truth of findings from Dimejian. As discussed above, Respondent also does not prove, with competent evidence, that Petitioners or their representatives made defamatory statements about CFO Topalian. Respondent’s evidence only shows an anonymous post and does not prove authorship by Petitioners. (Topalian Decl. ¶ 9 and Exh. 2.) While the record supports the conclusion that Petitioners made the inspection demands to support broader interests in the “battle for control” of ARFDW, that evidence does not prove that Petitioners have unclean hands. Rather, it only shows that the demands were made for an improper purpose and are not enforceable under section 6333, et seq.

[1] Unless otherwise stated, all statutory references are to the Corporations Code.

[2] Respondent fails to develop an argument about the “legal capacity” of ACF-Glendale or ACF-NH. The court considers the issue forfeited. (Nelson v. Avondale HOA (2009) 172 Cal.App.4th 857, 862-863 [argument waived if not raised or adequately briefed]; Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1282 [same].)