Judge: Mitchell L. Beckloff, Case: 22STCP02069, Date: 2022-09-16 Tentative Ruling
Case Number: 22STCP02069 Hearing Date: September 16, 2022 Dept: 86
GLENDALE CHAPTER OF THE ARMENIAN CULTURAL FOUNDATION v.
ARMENIAN CULTURAL FOUNDATION
Case No. 22STCP02069
Hearing Date: September 16, 2022
[TENTATIVE] ORDER DENYING REQUEST FOR PRELIMINARY INJUNCTION
Plaintiffs, Glendale Chapter of the Armenian Cultural Foundation and Burbank Chapter of the Armenian Cultural Foundation, bring this action pursuant to Corporations Code section 5510, subdivision (c). Plaintiffs seek an order compelling Defendant, Armenian Cultural Foundation, “to schedule a meeting of members at which an election of the Board of Directors shall occur.” (Pet., Prayer ¶ 1.)
This court issued a temporary restraining order (TRO) on August 25, 2022 enjoining Defendants from proceeding with an election for its board of directors “unless all member chapters expelled from ACF in the last six months are reinstated in sufficient time to vote in the election.” Pending trial, Plaintiffs seek a preliminary injunction—they request Defendant be enjoined from proceeding with an election of its board of directors.
Defendant’s request for judicial notice is granted. The court recognizes (as argued by Plaintiffs) the court cannot take judicial notice of factual findings contained within the judicially noticeable documents.
Plaintiffs’ five evidentiary objections to the Supplemental Declaration of Avedik Izmirlian are sustained as argumentative. Argument belongs in points and authorities, not declarations. (See In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 30 n. 3.)
To the extent Defendant requests the court preclude Plaintiffs’ counsel from making argument before the court based on Judge Strobel’s August 25, 2022 on collateral estoppel grounds, the court notes there is no final order.
Defendant’s evidentiary objections 3, 5, 7, 8 and 9 are sustained. The balance of those objections filed September 7, 2022 are overruled.
Late September 15, 2022, Defendant served additional evidentiary objections. Defendant objected to the nature of evidence submitted in reply by Plaintiffs to which it had no opportunity to respond. The declarations submitted by Plaintiffs with their reply are largely duplicative and support a theory largely undeveloped in its moving papers. The court overrules Defendant’s request to strike the reply declarations (Objection 1).
The evidentiary objections are somewhat problematic as they include large passages of written testimony—some objectionable and some not. The court notes for much of the evidence offered, the foundation for the particular declarant is often unclear.
The following objections are sustained: 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 16, 17, 19, 21, 22, 24, 25, 27, 29, 30, 32, 33, 34, 36, 38, 41, 43 and 44. The following objections are overruled: 28, 35, 40, 42, 45 and 47. The following objections are sustained in part: 2 (as to all except “On December 28, 2020” and “ACF-SF had approximately 48 members”), 3 (as to all except the last sentence), 7 (as to all except sentence two), 15 (as to all except sentence two), 18 (as to all except “On December 28, 2020” and “ACF-South Valley had approximately 116 members”), 20 (as to all except the last two sentences), 23 (as to all except as to sentence two), 26 (as to all except as to “On December 28, 2020” and “ACF-La Cresenta had approximately 137 members”), 31 (as to all except sentence two), 37 (as to all except as to the first sentence), 39 (as to all except the first three sentences) and 46 (as to all except the first page).
The request for a preliminary injunction is denied.
LEGAL STANDARD
“[A] court will deny a preliminary injunction unless there is a reasonable probability that the plaintiff will be successful on the merits, but the granting of a preliminary injunction does not amount to an adjudication of the merits.” (Beehan v. Lido Isle Community Assn. (1977) 70 Cal.App.3d 858, 866.) “The function of a preliminary injunction is the preservation of the status quo until a final determination of the merits.” (Ibid.)
“Trial courts traditionally consider and weigh two factors in determining whether to issue a preliminary injunction. They are (1) how likely it is that the moving party will prevail on the merits, and (2) the relative harm the parties will suffer in the interim due to the issuance or nonissuance of the injunction.” (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.) “[T]he greater the . . . showing on one, the less must be shown on the other to support an injunction.” (Ibid. [quoting Butt v. State of California, (1992) 4 Cal.4th 668, 678].) The burden of proof is on the plaintiff as the moving party “to show all elements necessary to support issuance of a preliminary injunction.” (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)
Preliminary injunctive relief requires the use of competent evidence to create a sufficient factual showing on the grounds for relief. (See, e.g., Ancora-Citronelle Corp. v. Green (1974) 41 Cal.App.3d 146, 150.) A plaintiff seeking injunctive relief must also show the absence of an adequate damages remedy at law. (Code Civ. Proc., § 526, subd. (a)(4).)
A preliminary injunction ordinarily cannot take effect unless and until the plaintiff provides an undertaking for damages which the enjoined defendant may sustain by reason of the injunction if the court finally decides that the plaintiff was not entitled to the injunction. (See Code Civ. Proc., § 529, subd. (a); City of South San Francisco v. Cypress Lawn Cemetery Ass’n. (1992) 11 Cal. App. 4th 916, 920.)
RELEVANT FACTS
Defendant is a public benefit non-profit corporation. (Plaintiffs’ Compendium, Ex. A [By-Laws].) Defendant’s members are various chapters, including Plaintiffs. (Id. at Art. II, § 1.) Defendant’s members pay dues to Defendant. (Id. at Art. II, § 5.)
Defendant’s members conduct an annual meeting to be scheduled in the first week of September. (Id. at Art. III, § 1.) At the annual meeting, Defendant’s members elect Defendant’s board of directors. (Id. at Art. IV, § 2.) The board of directors serves “for a minimum of one year or for no more than two years as determined at the annual meeting of said chapter member representative delegates.” (Ibid.) The number of votes allotted to a member chapter depends upon the number of individual members within the chapter member. (Id. at Art. II, § 2.)
Where a chapter fails “to pay any annual dues,” “[m]embership of a chapter shall terminate.” (Id. at Art. II, § 7 (2).)
A dispute arose when Defendant terminated five chapter members (North Hollywood, Torrance, Houston, Phoenix and San Jose) who were in arrearages with their annual dues in advance of the annual meeting in September 2022. As Defendant had never terminated any member chapter in the past for non-payment, Plaintiffs contend Defendant improperly terminated the five chapter members to “skew the election.” (Ex Parte App. 2:20.)
Plaintiffs contend the five chapter members Defendant terminated were “problem” chapters as they are critical of Defendant’s current board of directors. Plaintiffs argue Defendant’s termination of the five chapter members violated due process and California law. (See Supp. Points and Authorities 2:1-3:4.)
Plaintiffs also assert Defendant is recognizing splinter groups of member chapters “and has ignored the existence of the majority of that Chapter.” (Supp. Points and Authorities 3:10-11.) Plaintiffs contend Defendant has no authority to determine who is an individual member of a member chapter. (Id. at 3:22-24.) Plaintiffs argue: “For election purposes, this is fundamentally no different than terminating Chapters and had the exact same effect: it denies those opposing the Board the right to vote, thus ensuring that [] the illegitimate Board members will be elected because only those friendly to the illegitimate Board are being allowed to vote.” (Id. at 3:24-4:2.)
ANALYSIS
The court issued the TRO enjoining Defendant from conducting an election unless Defendant reinstated for purposes of that election the chapter members Defendant had terminated in the last six months. The relief granted squarely address Plaintiffs’ concerns about disenfranchisement and disparate treatment of chapter members who were in arrears to Defendant with annual dues payments. While Defendant’s By-Laws may have permitted Defendant to take such action, given the conflict over control Defendant’s actions had the appearance of impropriety whether motivated to skew the election, as claimed by Plaintiffs, or not.
Defendants have now agreed to reinstate all previously terminated chapter members—North Hollywood, Torrance, Houston, Phoenix, San Jose and any others—for purposes of conducting an election. (Defendant has expressly reserved its rights under the By-Laws and notes the termination provision is self-executing.) Defendants have agreed to do so in an effort to hold an annual meeting and conduct an election of the board of directors.
Plaintiffs argue Defendant’s willingness to reinstate the terminated chapter members is a ruse. Plaintiffs contend Defendants will recognize splinter groups of chapter members to escape the court’s scrutiny and skew the election. That is, Defendant “intends to unilaterally determine which Chapters are the ‘real’ Chapters and thus which Chapters get to vote.” (Reply 4:5-6.)
Defendant’s By-Laws require that, “The authorized delegate representatives appointed for each chapter member shall be determined by the chapter members annually and certified by a certificate of the chapter member’s secretary setting forth the authorized chapter delegates or their alternates by name and mailing address.” (Plaintiffs’ Compendium, Ex. A, Art. II, § 4.) Defendant maintains a roster of members of each member chapter. (Id. at Art. VIII.) Thus, Defendant has the authorized representative delegates for each member chapter.
Despite Plaintiffs’ claims to the contrary, Defendant’s By-Laws provide who may vote (the representative delegate) for each member chapter. Defendant’s By-Laws do not allow Defendant to select the representative delegates for member chapters—the member chapters have annually certified the authorized chapter delegates. As acknowledged by Defendant, the member chapters select their representative delegates. (Izmirlian Supp. Decl., ¶ 16.)
Accordingly, given Defendant’s concession as to the terminated member chapters participating in the election and the member chapters having annually certified their representative delegates, Plaintiffs’ concerns about an invalid election (in the context of a pre-election challenge) have been remedied. By reinstating the terminated chapter members and otherwise following its By-Laws concerning election procedure (including who is authorized to vote) as conditions of the election, the court need not enjoin the election.
As to the balance of harms, the court notes to the extent Plaintiffs contend some future election held at Defendant’s annual meeting may result in an election where individual members of chapter members are excluded, Plaintiffs have an adequate and speedy remedy at law. They may challenge the results of the election to the extent they contend Defendant did not recognize particular chapter members’ representative delegates. (Corp. Code § 5617.)
On these facts and given Defendant’s representations it will permit the five chapter members it has terminated to vote (Plaintiffs’ original concern), the court finds a preliminary injunction is unwarranted here.
Based on the foregoing, Plaintiffs’ request is denied.
IT IS SO ORDERED.
September 16, 2022 ________________________________
Hon. Mitchell Beckloff
Judge of the Superior Court