Judge Stephen I. Goorvitch, Case Number: 24STCP00741, Date: 2024-05-24 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 24STCP00741, Date: 2024-05-24 Tentative Ruling

Petitioner Beta Pi Sigma Sorority, Inc. (“Petitioner” or “BPS”) is a non-profit sorority. This writ petition concerns a dispute over who controls Petitioner and the accuracy of the Statement of Information on file with the Secretary of State. Petitioner alleges that Respondents “organized an unofficial and unauthorized 2023 National Convention in August 2023, wherein they elected a National Board of Directors and national officers (‘Fake Board and/or Officers’).” (Petition, ¶ 1.) Petitioner alleges that the “fake” board and officers “seized access to BPS national checking accounts, . . . diverted BPS fund for unauthorized BPS purposes; seized access to BPS’s website and improperly identified themselves as notional board and national elected officials; [and] placed the Fake Board and/or Officers onto BPS’s Statement of Information on file with [the] California Secretary of State . . . .” (Id., ¶ 2.) Several current or former members of Petitioner filed declarations in support of the motion for preliminary injunction.[1]

Petitioner filed an ex parte application for a temporary restraining order. The court (Beckloff, J.) denied the ex parte application, finding no exigency, but construed the pleadings as a motion for preliminary injunction. Petitioner seeks a prohibitory preliminary injunction enjoining Respondents from engaging in any of the following acts prior to the trial on the writ petition: (1) Transferring any funds related to Beta Pi Sigma Sorority Inc.’s checking account (Account number 0005 5790 4028); (2) Making changes to BPS’s website (https://www.betapisigmasorority.org/); (3) Holding themselves out as BPS national board and/or national elected officers; and (4) Making changes to BPS’s Statement of Information on file with California Secretary of State. Petitioner also seeks a mandatory preliminary injunction requiring Respondents to: (1) Secure and “hand over” BPS’s archives; (2) Transfer any and all bank account records to Petitioner and allow Petitioner to transfer said bank accounts to BPS’s duly elected national officers and or members of BPS’s duly-elected National Board of Directors; and (3) Relinquish control of BPS’s website to BPS’s duly-elected National Officers and/or National Board of Directors.

Petitioner is a California non-profit corporation that is registered with the California Secretary of State. (McLurkin Decl. ¶ 3.) Petitioner has existed as a corporation since May 1945. (Mahoney Decl. filed 3-19-24 ¶ 1.) According to the Statement of Information filed with the California Secretary of State on September 7, 2023, Petitioner’s Chief Executive Officer is Respondent Terri Stallings and Petitioner’s Chief Financial Officer is Respondent Teresina Mahoney. (Stalling Decl. filed 3-19-24, ¶ 2 and Exh. A [Statement of Information filed with Secretary of State, 9-7-23].) According to the petition, which is verified by Cassandra Ray, Petitioner’s Constitution and Bylaws (Subsection III, Article XVI, Section 4) state that the host chapter for the Petitioner’s National Convention and Annual Meeting shall be assigned in “Greek Alphabetical Order.” (Pet. ¶ 16.) The petition alleges that “for 2023, pursuant to the National Rotation Schedule, the host chapter for 2023 National Convention was Epsilon chapter.” (Ibid.; see also Hurd Decl. ¶¶ 5-6.)

Since 2019, Marguerite Turner has been the Baselius (or President) of the Epsilon chapter, which is based in Los Angeles. At the August 2022 Annual Meeting, Turner caused a flyer to be distributed that indicated that the August 2023 National Convention would be hosted by Epsilon chapter in Los Angeles. (Turner Decl. ¶ 3, Exh. A.) A committee of Epsilon chapter selected the Four Points by Sheraton in Culver City, CA, as the proposed location for the August 2023 National Convention. (Id. ¶ 5.) However, Respondent Gwendolyn Hutchinson, the Petitioner’s Supreme Basileus (National President) criticized the proposed location, indicated that she wanted the 2023 National Convention to be held in Las Vegas, and refused to approve the contract with Four Points. (Id. ¶ 5.)

An emergency meeting with Petitioner’s National Board of Directors was allegedly scheduled for February 7, 2023, via Zoom, to discuss Hutchinson’s refusal to approve a contract with Four Points for the August 2023 National Convention. (Id. ¶¶ 7-8.) Hutchinson did not appear for the Zoom call. (Id. ¶ 9.) According to Turner, the National Board of Directors acknowledged that the Epsilon chapter was the “proper chapter to host the 2023 National Convention and that any documents that needed to be executed by the National Officer/Board would be executed by Ruby Hurd, National Chairperson of the Board.” (Id. ¶ 11; see also Jordan-Thomas Decl. ¶¶ 8-11.) However, Respondent Stallings declares that there was no quorum at the February 2023 meeting; that Hurd was not authorized to sign the contract with Four Points; and that Hurd was subsequently removed as chairperson of the National Board and as a member of Petitioner’s sorority as a result of her misconduct. (Stallings Decl. ¶¶ 4-7, Exh. B-C.)

On or about July 20, 2023, at Hurd’s instruction, Channel Law Group, LLP, issued a letter to Hutchinson and other “selected members” of Petitioner stating, in part: “[T]he upcoming convention in Las Vegas, NV between August 7-16, 2023 is not authorized and/or sanctioned by Beta Pi Sigma…. Any attempts to amend Beta Pi Sigma’s By Laws, Constitution, etc. will be deemed invalid and any election of officers will be deemed void.” (Hurd ¶ 12, Exh. A.) However, neither Hurd nor Petitioner filed a lawsuit to enjoin this upcoming convention.

Two different National Conventions were held in August 2023. According to Hurd, “[t]he National Convention was eventually approved and it was conducted virtually from August 9-11, 2023” (hereafter “Virtual Convention”). (Hurd Decl. ¶ 13.) Hurd declares that “[o]n August 12, 2023, the new board and officers were duly elected. Cassandra Ray was elected Chairman of BPS’s National Board of Directors. Pamela Tiller was elected Supreme Baselius, Pamela Tiller as Secretary and Inil Swann-Cook as Treasurer.” (Id. ¶ 14.) According to Respondents, the National Convention was held in person in San Mateo (hereafter “San Mateo Convention”). (Mahoney Decl. ¶ 3.)[2] Mahoney declares that the Respondents were elected to the National Board at this convention, and that the Statement of Information was filed with the Secretary of State based on the “official election” that occurred at this convention. (Id. ¶ 5.)

Shortly after the conventions held in August 2023, Cassandra Ray, who was elected the National Board Chairman at the Virtual Convention, sought to add newly elected officers to Petitioner’s bank accounts. At that time, Ray learned that the alleged “rogue group of BPS members went to Bank of America and put their names in as the persons with signing authority,” causing Ray and others to be “locked out” of the bank accounts. (Ray Decl. ¶ 4.)

On or about September 5, 2023, Petitioner’s Certified Public Accountant, Mark R. Jackson, resigned. (Pet. ¶ 29; Ray Decl. ¶ 11.) In his resignation letter, Jackson explained: “I have not been provided with any information or support to prepare the organization’s fiscal year ended July 31, 2022 tax returns. Also, I've been provided conflicting information as to the current Board Officers for the organization.” (Ray Decl. Exh. H.)

On or about September 15-16, 2023, Ruby Hurd received information that Petitioner’s storage unit for its archives had been closed and the contents moved to a different location. (Hurd Decl. ¶¶ 15-19.) Hurd reported the matter to the Carson Sheriff’s Office, which indicated that “it was a civil matter.” (Id. ¶ 19.)

On or about September 27, 2023, a meeting was held between members of the National Board who were purportedly elected at the Virtual Convention and members of the National Board who were purportedly elected at the San Mateo Convention. The topic of this meeting was “reunification of our Sorority.” (Ray Decl. ¶ 13, Exh. J.)

In or about October 2023, Cassandra Ray, who was elected the National Board Chairman at the Virtual Convention, instructed attorney Charles McLurkin, of Channel Law Group, to file a complaint against the “rogue element of BPS” with the California Department of Justice. On October 16, 2023, the Attorney General’s office responded that “[t]he Attorney General does not review matters involving internal labor disputes, contested elections, disagreements between directors and members over policy and procedures, and most legal actions between charities and third parties regarding contracts or torts.” (Ray Decl. ¶ 5, Exh. B.)

On or about January 16, 2024, Petitioner’s insurance advisor emailed Ray and stated that Petitioner’s General Liability insurance policy would be cancelled if not paid by February 6, 2024. (Id. ¶ 14, Exh. K.) Petitioner’s declarants and Respondents do not indicate whether this bill was paid or whether the insurance policy was cancelled.

The purpose of a preliminary injunction is to preserve the status quo pending a decision on the merits. (Major v. Miraverde Homeowners Ass’n. (1992) 7 Cal. App. 4th 618, 623.) In deciding whether or not to grant a preliminary injunction, the court looks to two factors, including “(1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief.” (White v. Davis (2003) 30 Cal.4th 528, 553-54.) The factors are interrelated, with a greater showing on one permitting a lesser showing on the other. (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.) However, the party seeking an injunction must demonstrate at least a reasonable probability of success on the merits. (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 73-74.) The party seeking the injunction bears the burden of demonstrating both a likelihood of success on the merits and the occurrence of irreparable harm. (Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1571.) Irreparable harm may exist if the plaintiff can show an inadequate remedy at law. (CCP § 526(a).)

“The granting or denying of a preliminary injunction does not constitute an adjudication of the ultimate rights in controversy.” (Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286; see also Yee v. American National Ins. Co. (2015) 235 Cal.App.4th 453, 457-458 [“a preliminary injunction is not a determination on the merits….”].)

Respondents filed their opposition late. Because the hearing was noticed for May 24, 2024, the opposition brief should have been served electronically by May 9, 2024. (Code Civ. Proc., §§ 1005 & 1010.6(a)(3)(B).) The opposition was filed and served electronically on May 14, 2024. The court shall consider this opposition brief. The brief was only two pages (in addition to the caption and signature pages) and Petitioner filed a reply brief on the merits, so there is no prejudice to Petitioner.

The court denies the motion for a preliminary injunction the merits. The application is based on Petitioner’s cause of action for writ of ordinary mandate pursuant to Code of Civil Procedure section 1085. 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.)

Petitioner alleges that Respondents’ actions in holding the San Mateo Convention; electing a “Fake Board and Officers;” seizing access to Petitioner’s bank accounts and website; identifying themselves as officers on the Statement of Information; and taking control of Petitioner’s archives violated Petitioner’s Constitution and Bylaws. (Pet. ¶¶ 24, 34, 36-38.) Although the argument is not fully developed, Petitioner suggests that Respondents’ actions conflicted with Subsection III of Petitioner’s Constitution and Bylaws, and particularly with Article XVI, Section 4, which states that the National Convention and Annual Meeting shall be assigned in “Greek Alphabetical Order.” (Pet. ¶¶ 14-16 and Ex Parte Section II.A.)

Article XVI, titled “Meetings, Conventions, and Founders Day,” states in relevant part:

The National Convention and/or Annual Meeting shall be held in the month of August at a location selected by the host Chapter. Host Chapter for National Convention and Annual Meeting shall be assigned in Greek Alphabetical Order. [1987] Conventions shall be held in odd numbered years, Annual Meetings shall be held in even number years.

(Jordan-Thomas Decl. Exh. 1.) Jordan-Thomas authenticates Petitioner’s National Rotation Schedule, which states that Epsilon Chapter was the assigned host for the 2023 National Convention. (Id. Exh. 2.) Based upon the foregoing, it appears that: (1) the Epsilon Chapter was the proper host of the 2023 National Convention/Annual Meeting; (2) The Epsilon Chapter may select the location for the National Convention/Annual Meeting; and (3) The Epsilon Chapter conducted a virtual National Convention/Annual Meeting. By contrast, Respondents take the position that the virtual meeting was procedurally defective:

If Ms. Hurd claims that she held an election of national officers virtually and with only 22 delegates, such an election is void and extraconstitutional without the participation of the Supreme Basileus (our Sorority’s President), without National Officers participating, without a Nominating Committee, without a National Credential Committee—all of whom attended the August 2023 in person National Convention last August.

(Mahoney Decl., ¶ 4.) Moreover, Petitioner’s evidence suggests that the Supreme Basileus has a role in approving the location of the National Convention. (See, e.g., Declaration of Rhonda Jordan-Thomas, ¶ 5.) Simply, the court cannot determine which party is likely to prevail on the merits (especially since the parties’ briefing does not adequately address the dispositive issues). Therefore, Petitioner’s motion for a preliminary injunction is denied. The court need not reach the issue of irreparable harm.

2. The court advances the trial setting conference. The court sets trial for ______________, ___, at 9:30 a.m. The opening brief shall be due 60 days before trial; the opposition brief shall be due 30 days before trial; and the reply brief shall be due 15 days before trial.

3. Petitioner’s counsel shall provide notice and file proof of service with the court.

[1] Respondents suggest that these declarants were not authorized to file this lawsuit on behalf of Petitioner. (Oppo. 3:4-8.) Nonetheless, because Respondents do not fully develop the point in their opposition brief, the court declines to consider it at this time.

[2] It is unclear from why this in-person convention was held in San Mateo, and not Las Vegas, NV. It is also unclear why the convention held by Petitioner’s declarants was held virtually and not at Four Points.