Friday, April 20, 2012
Suit Against Charity Over Director’s Removal Held No SLAPP
By a MetNews Staff Writer
A suit by a Los Angeles attorney against the directors of a major Southern California charitable foundation, alleging that he was illegally removed from its board, was not a strategic lawsuit against public participation, the Court of Appeal for this district has ruled.
Div. Four revived a suit by James M. Donovan against the Dan Murphy Foundation.
Donovan claimed that a majority of his fellow directors wrongfully voted him off the board in 2009, following a number of disputes. Donovan alleged that assets were mismanaged, that fellow directors refused to provide him with information about investments, that other directors had conflicts of interest, that the compensation of officers had been illegally increased without a vote of the board, and that the board had improperly approved significant unsecured loans.
He filed suit in August 2010.
In moving to strike under Code of Civil Procedure Sec. 425.16, the foundation and the individual directors claimed that Donovan’s suit lacked merit, and that it arose from free speech and petition activity in connection with a public issue. Los Angeles Superior Court Judge Mary Ann Murphy agreed and granted the motion.
Murphy reasoned that the anti-SLAPP statute applied because the suit arose from protected activity, and that Donovan’s claims lacked the minimal merit needed to survive the motion.
Justice Nora Manella, writing for the Court of Appeal, however, said the motion should have been denied, without a ruling on the merits, because the claims did not implicate free speech or petition activity.
The defendants, she noted, did not allege that the suit arose from any writing or speech. “More importantly, a board of directors meeting by a nonprofit charitable organization is not an ‘official proceeding authorized under law’ for the purposes of section 425.16, subdivision (e)(2),” the justice wrote.
Manella acknowledged that the foundation’s activities affect large numbers of individuals who benefit from the activities it supports. But that alone does not make its governance a public issue or a matter of public interest for purposes of the anti-SLAPP law.
“Respondents presented no evidence of widespread public interest in the financial oversight or governance of the Foundation,” the justice wrote. “They submitted no news articles indicating that the public was interested in these issues, or even in the dispute among directors of the Foundation. “
Donovan was represented on appeal by Michael J. Glenn of the Law Offices of James M. Donovan and by Horvitz & Levy’s Jeremy B. Rosen. Andrew J. Waxler and Chrisopher L. Wong of Waxler, Carner, Brodsky represented the defendants.
The case is Donovan v. Dan Murphy Foundation, 12 S.O.S. 1734.
Copyright 2012, Metropolitan News Company