Articles Posted in Non-Profit Corporations

by
The Boys and Girls Clubs of South Alabama, Inc. ("BGCSA"), sought a writ of mandamus to order the Baldwin Circuit Court to dismiss a declaratory-judgment action filed against it and The Community Foundation of South Alabama by the attorney general of Alabama, Fairhope-Point Clear Rotary Youth Programs, Inc. ("Rotary Inc."), and Ruff Wilson Youth Organizations, Inc. ("Wilson Inc.") In 1996, B.R. Wilson, Jr., one of the incorporators and a principal benefactor of BGCSA, executed a deed transferring to BGCSA approximately 17 acres of real estate. Contemporaneously with the execution of the deed, Wilson gave a letter to BGCSA that stated Wilson's intentions and stipulations concerning his gift of the property. The letter stated that BGCSA was "'free to ultimately dispose of this property,'" but that it was Wilson's "'desire and understanding that [BGCSA] will use the proceeds from any such disposition for [BGCSA's] facilities and/or activities in the Fairhope–Point Clear area.'" Wilson died in 1997. In 2010, the Eastern Shore Clubs filed an action in the Baldwin Circuit Court seeking declaratory and injunctive relief against BGCSA. The Eastern Shore Clubs alleged that BGCSA "ha[d] used," or, perhaps, was "anticipat[ing] using," the proceeds from the sale of the property for its own operations, rather than for the benefit of the Eastern Shore Clubs. In 2012, the Baldwin Circuit Court entered a judgment concluding Wilson's intent was that the Wilson funds should be used for the "exclusive benefit of the Fairhope and Daphne Clubs." The Baldwin Circuit Court ordered the disbursal of the remainder of the Wilson funds. This case was the third action that has come before the Supreme Court arising out the dispute between BGCSA and the Eastern Shore Clubs over the Wilson funds. The Supreme Court concluded Section 6-5-440 compelled dismissal of this case because another action involving the same cause and the same parties ("the Mobile action") was filed first. Therefore, the Court granted the petition for a writ of mandamus and directed the Baldwin Circuit Court to vacate its most recent order in this case, and to enter an order dismissing this case. View "Alabama et al. v. Boys And Girls Clubs of South Alabama, Inc." on Justia Law

by
Petitioners the City of Valley Grande and its mayor, David Labbe, petitioned the Supreme Court for a writ of mandamus to direct the Circuit Court to vacate its order denying petitioners' motion for a summary judgment and to enter a summary judgment for the petitioners on claims asserted against them by Marcus Kelley, Yolanda Kelley, and Jeffery Barlow, Jr. The Valley Grande Volunteer Fire Department was incorporated specifically as a charity under 501(c)(3) of the Internal Revenue Code. In 2008, the City entered into an agreement with the fire department to which the fire department agreed to provide fire protection service to the City "without remuneration." However, the petitioners did acknowledge in the fire-service agreement that the City "ha[d] in the past and likely [would] continue to provide [the fire department] with some level of annual funding." Mayor Labbe testified that the City and the fire department are separate entities and that the City did not maintain or reserve any right of control over the fire department. In early 2011, James Barlow, Sr., and his mother, Bertha Yeager, were killed in a house fire. W. Alan Dailey, the coroner for Dallas County, pronounced Barlow and Yeager dead at the scene and directed members of the fire department to remove the remains of the deceased from the house. The plaintiffs alleged that the fire department represented that it had recovered all the decedents' remains. The plaintiffs stated that in April 2011 the family discovered a body bag at the scene of the fire that contained additional remains of Barlow. Plaintiffs sued petitioners, among others, asserting claims of negligence; wantonness; intentional infliction of emotional distress; fraud; suppression; and negligent and/or wanton hiring, training, and supervision of the individual firefighters against both the City and the mayor. Petitioners moved for a summary judgment, arguing, among other things, that the petitioners did not employ, supervise, or train any firefighters; that petitioners did not reserve any right of control over the fire department; that the petitioners were entitled to immunity pursuant to the Volunteer Service Act, 6-5-336, Ala. Code 1975; that the City was immune from suit for intentional torts of its agents, officers, or employees; and that the petitioners could not be liable for negligent and/or wanton hiring, training, or supervision of the individual firefighters because, they said, no master-servant relationship existed between the City and the fire department. The trial court denied petitioners' motion. Because of the procedural posture of this case, the Supreme Court addressed only those issues on immunity grounds and concluded that the agreement between the City and the fire department, as well as the donations made to the fire department by the City, did not alter the fire department's status as a "volunteer" fire department. Furthermore, the Court concluded that the firefighters were immune from liability for their negligent acts under the Volunteer Service Act. Accordingly, the Court granted the petition for a writ of mandamus in this case and directed the trial court to enter summary judgment for the petitioners. View "Kelley et al. v. Dailey" on Justia Law

by
The Boys & Girls Clubs of South Alabama, Inc. ("the Club"), a nonprofit corporation, appealed a judgment entered in favor of the Fairhope-Point Clear Rotary Youth Programs, Inc. ("Rotary Inc."), and the Ruff Wilson Youth Organization, Inc. ("Wilson Inc."), in their action against the Club seeking declaratory and injunctive relief. In 1996, B.R. Wilson, Jr., one of the incorporators of the Club and a principal benefactor, executed a "gift deed," transferring to the Club approximately 17 acres of real estate ("the property"). In March 2000, the Club sold the property and deposited the proceeds into three separate accounts, two of which were separately earmarked for the Daphne Club and for the Fairhope Club. However, in 2009, the Club discontinued its operations in Daphne and Fairhope, citing "operating deficits" as a contributing factor. It transferred the remainder of the proceeds from the sale of the property to an account in the Community Foundation of South Alabama ("the bank"). Later that year, the facilities in Daphne and Fairhope were reopened by volunteers and former Club personnel, who began operating the youth centers under their own independent management structures. Subsequently, some of these individuals incorporated Rotary Inc. and Wilson Inc., under which they continued to operate the facilities in Fairhope and Daphne, respectively. Rotary Inc. and Wilson Inc. sued the Club, seeking declaratory and injunctive relief, alleging that the Club "ha[d] used," or, perhaps, was "anticipat[ing] using," the proceeds for its own operations, rather than for the use of the facilities then being operated by Rotary Inc. and Wilson Inc. They sought a judgment: (1) declaring that the "desire and understanding" of B.R. Wilson expressed in the letter controlled the disposition of the funds, and (2) enjoining the use of the proceeds for anything but the benefit of the youth facilities as operated by Rotary Inc. in Fairhope and by Wilson Inc. in Daphne. The court ordered the termination of the "trust" and the disbursal of the remainder of the proceeds to Rotary Inc. and Wilson Inc., respectively. The Club appealed, challenging, among other things, the standing of Rotary Inc. and Wilson Inc. to sue over distribution of the proceeds of the sale of the property. Upon review, the Supreme Court concluded that Rotary Inc. and Wilson Inc. failed to show that they had standing to challenge the Club's disposition of the proceeds of the sale of the property donated to the Club by B.R. Wilson, Jr. Therefore, the trial court's judgment was void for lack of subject-matter jurisdiction. Accordingly, the Court vacated the judgment and dismissed the case and the appeal. View "Boys & Girls Clubs of South Alabama, Inc. v. Fairhope-Point Clear Rotary Youth Programs, Inc." on Justia Law