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Kristen Investment Properties, LLC v. Beaverfork Volunteer Fire Department

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Kristenvs.Beaverfork
Number: CA 99-1250 ___ S.W.3d ___
Year: 2000
State: Arkansas
Court: Arkansas Court of Appeals
Other lawsuits in Arkansas
Other lawsuits in 2000
Precedents include:
Attorney's fees can be awarded to someone who has been denied public records from a nominally private non-profit organization that clearly should have known that it was funded by public dollars
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Kristen Investment Properties, LLC v. Beaverfork Volunteer Fire Department is a December 6, 2000 decision of the Arkansas Court of Appeals.

The plaintiff, a real estate development company, asked the defendant for records. The defendant said it didn't have to provide the records, because it was a private non-profit. A trial court ordered the fire department to provide the records on the grounds that the fire department, although private, was performing a public service. However, the trial court said that the fire department did not have the pay the plaintiff's legal fees.

Precedent

The appellate court disagreed, and said that the defendant did have to pay those legal fees. Their decision included these findings:

  • "The trial court's finding are clearly erroneous and that the trial court abused its discretion in not awarding attorney's fees."
  • "Beaverfork's denial of appellant's FOIA request in the face of such knowledge regarding the source of its funding and in the face of the foregoing legal authorities constituted arbitrary conduct for which attorney's fees are authorized."
  • The appellate court also said that the trial court should have considered how Beaverfork was funded, not just whether the services it performed were traditionally services performed by the government.[1]

Background

Kristen Investment Properties, LLC ("Kristen") had requested records from the Beaverfork Volunteer Fire Department (Beaverfork). The Beaverfork Volunteer Fire Department was operated as a private non-profit organization. Beaverfork denied Kristen's FOIA request.

Kristen sued, and the trial judge ordered Beaverfork to provide the records. The trial judge did deny Kristen's request that Beaverfork pay its legal fees on the grounds that "Beaverfork was substantially justified in denying appellant's FOIA request and that an award of attorney's fees would be unjust."

  • Kristin was developing Cadron Creek Estates, a residential subdivision.
  • Cadron Creek Estates was within the service area of the Beaverfork Volunteer Fire Department.
  • Beaverfork operated a water-distribution system and provided fire protection service under the terms of a contract it had with a government agency, the Beaverfork Fire Protection District.
  • In December 1998, Kristen tried to apply to Beaverfork to have Beaverfork open a water-service connection to Cadron Creek Estates.
  • Kristen was told that applications were not being granted.
  • On April 15, 1999, Kristen filed an Arkansas FOIA request with Marvin DeBoer, president of Beaverfork, asking for some of Beaverfork's records. The records requested were "all by-laws of the nonprofit corporation, minutes from all corporate board meetings, minutes from all division and committee meetings including the Executive Committee and Water Supply Division, copies of all written contracts to supply water to residential, commercial, and development customers, copies of all monthly, quarterly, and annual financial reports, and copies of all lists or compilations evidencing water customers of Beaverfork Fire Department, Inc."
  • On April 21, 1999, a lawyer working for Beaverfork told Kristen that Beaverford was declining to provide the records on the grounds that Beaverfork was not covered by the state's FOIA law "because it is a nonprofit private corporation 'not supported in whole or inpart by public funds.'"
  • Beaverfork said, furthermore, that "Beaverfork's only connection to public funding came indirectly through governmental loans (rather than grants) and that such loans did not bring Beaverfork within the FOIA's purview."
  • Kristin filed a lawsuit and a petition for writ of mandamus to compel Beaverfork to extend water mains to Cadron Creek Estates.
  • On June 29, 1999, the trial court agreed with Kristen that Beaverfork's records were public, and ordered Beaverfork to provide them.
  • The trial court also said that Beaverfork was "substantially justified in denying the FOIA request and that an award of attorney's fees would be unjust."[1]

Holding

The appellate court's reversal of the trial court decision made these points:

  • "It is clear that Beaverfork's assertion that it was not publicly funded was neither well-founded nor substantial."
  • Our supreme court has consistently held the FOIA applicable to private entities that receive public funds.

The court mentioned these precedents:

In Edmark, the state's high court "held that records retained by private attorneys employed by the city of Fayetteville were subject to FOIA disclosure because the private attorneys had been hired in lieu of the city attorney and were paid with public funds."

In North Central, the state supreme court held that "a reporter was improperly excluded from a state meeting of the association, a private nonprofit corporation that sets educational standards and policies for colleges and secondary schools. The controlling factor underlying the North Central court's decision was that more than 90% of the money contributed to the association by Arkansas schools was public money."

In Delta-Hills, the court held that "a private nonprofit corporation created under federal law to assist the Arkansas State Health Planning and Development Agency in the regional review of proposed health care changes was subject to the FOIA because the primary source of funding for the private entity came from the federal government."

In Weatherford, the state supreme court determined that a one-dollar-per-year, thirty-year lease between a local chapter of the Red Cross and the City of Fort Smith did not constitute "public funds" under the Arkansas FOIA. In Weatherford, the court said, "[h]ere, no payment of government moneys was made to the Red Cross and the concomitant application of the FOIA should not transpire."

Beaverfork argued that the first cases did not apply to it, since it was funded through public loans, rather than outright public funding, citing Weatherford to justify its position.

Beaverfork had received $2.9 million in federal and state loan.

The trial court determined that Beaverfork was covered by the Arkansas FOIA not because it got government money, but because it performed duties "traditionally performed" by governmental entities; in this case, fire protection and water service.

Testimony was heard in the trial to the effect that "I don't know if it's the County Assessor that does it, but whoever collects money in the County collects the money from everybody within Beaverfork Fire Protection District's geographic area. It's not a private enrollment or membership to pay in the Fire Protection District because the voters voted for that district. In determining what noun to put on it in terms of tax or assessment, I believe it's a service fee."

The appellate court judged from this testimony that Beaverfork "knew that the fees received by its Water Division" are payments from the Beaverfork Fire Protection District, which, the court said, is plainly a public entity.

The court wrote:

"Here, funds obtained by a public assessment against all land within the Beaverfork Fire Protection District, a public entity, are paid to Beaverfork, a private entity holding an exclusive franchise from the Fire Protection District to provide water service to customers in the District, a service routinely provided by government."

Ultimately, the court concluded:

"Beaverfork's denial of appellant's FOIA request in the face of such knowledge regarding the source of its funding and in the face of the foregoing legal authorities constituted arbitrary conduct for which attorney's fees are authorized."[1]

Associated cases

See also

External links

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