Matter of Fritz Krainer and Tracy Krainer

Case Number

24CV02272

Case Type

Hearing Date / Time

Fri, 04/11/2025 - 10:00

Nature of Proceedings

CMC; Motion: Judgment on the Pleadings

Tentative Ruling

(1)       On or before April 21, 2025, applicants Fritz Krainer and Tracy Krainer shall serve the Application, the moving papers for this motion, and a copy of this order on the California Attorney General electronically consistent with the manner of notice to be given under California Code of Regulations, title 11, sections 328 and 329, and shall file proof of such service with the court; and,

(2)       On or before May 7, 2025, Applicants shall file with the court certified or otherwise adequately authenticated statements of information for the Corporation filed with the California Secretary of State since 2009.

(3)       The hearing on the motion and the case management conference are continued to May 16, 2025.

Background:

As set forth in the verified application:

Life After Death, More Proof Inc. (the Corporation) is a California nonprofit public benefit corporation. (Application, ¶ 1.) The Corporation was incorporated on December 9, 1986. (Application, ¶ 5 & exhibit A.) The Articles of Incorporation lists three initial directors: James Lewis Rogers, Louise M. Ginter, and Virginia L. Gard. (Application, ¶ 6 & exhibit A.)

The Corporation adopted Bylaws, dated December 22, 1987, confirming Rogers, Ginter, and Gard as directors of the Corporation. (Application, ¶ 7 & exhibit B.)

“Each Director shall hold office for the term stated herein, or leave due to disability, resignation, or if two of the three Directors think it is best to replace the third Director, such as, if a Director misses 2 regular meetings in a year, than [sic] that Director is to be replaced. Upon a vacancy in the Board of Directors, The Director or Directors remaining in office shall select a person to fill the vacancy in accordance as stated herein.” (Application, exhibit B [Bylaws, § 2.04].)

“The original Directors shall hold office as follows: James Lewis Rogers, as President, etc. as above stated, shall be for life. Louise M. Ginter, as Treasurer, etc., as stated herein, shall be for life. Secretary as stated herein, shall be until the annual meeting. Thereafter, Directors for periods of two years, one to expire in odd-numbered years and one in even-numbered years. Each such director shall continue to serve until the election and qualification of a successor, but such holding over shall not constitute reelection unless such director shall have been expressly elected to a new term. The term of a successor, Secretary and director, shall be set at the time of election, and if the term is not so specified, it shall be presumed to expire upon the date for the next annual meeting, and shall otherwise be upon the same terms as those set for the original. [¶] Upon a vacancy in the Board of Directors, the Directors or Director remaining in office shall select a person to fill the vacancy in accordance with the qualifications set forth.” (Application, exhibit B [Bylaws, § 2.05].)

Louise M. Ginter died on July 4, 1986. (Application, ¶ 9 & exhibit C.)

At some point prior to May 26, 1998, Virginia L. Gard either died or resigned as a director of the Corporation. (Application, ¶ 10.) After a diligent search, the status or whereabouts of Gard remains otherwise unknown. (Ibid.)

On May 26, 1998, Rodgers, as the then sole serving director of the Corporation, at a regularly scheduled meeting of the board of directors, appointed Christine Krainer as a director of the Corporation and resigned as director. (Application, ¶ 11 & exhibit D.)

James Lewis Rodgers died on August 1, 1999. (Application, ¶ 12 & exhibit E.)

Christine Krainer served as sole director until her death on July 22, 2009. (Application, ¶ 13 & exhibit F.) Prior to her death, Christine Krainer appointed her son, applicant Fritz Krainer as President and CEO (but not a director) of the Corporation. (Application, ¶¶ 14, 15 & exhibit G.)

The Corporation owns two condominium units located in Santa Monica, California, (the Real Property) and owns a bank account, used in the management of the Real Property, with a balance of approximately $98,000. (Application, ¶ 16.) Fritz Krainer, acting as president, and Tracy Krainer, acting as secretary, have taken responsibility for the day-to-day management of the Corporation, including managing the Real Property, filing statements of information with the Secretary of State, and filing income tax returns for the Corporation. (Application, ¶ 17.)

Since Christine Krainer’s death, the Corporation has been without a director authorized to act on behalf of the Corporation, including to appoint or elect other directors of the Corporation. (Application, ¶ 21.)

On April 12, 2024, applicants Fritz Krainer and Tracy Krainer filed this Application under Corporations Code section 5220, subdivision (e) requesting the court appoint them as directors of the Corporation.

On July 25, 2024, applicants filed proof of service of the Application and notice of case management conference, which shows service by mail on the Office of the California Attorney General.

On August 23, 2024, a case management conference was held in this matter where the only appearance was by counsel for applicants. The court set a CMC for February 7, 2025.

On January 13, 2025, applicants filed this motion, which is styled a motion for judgment on the pleadings pursuant to Code of Civil Procedure section 438.

On February 4, 2025, applicants filed a status report stating that they have received no communication from the California Attorney General, the only other interested party who was provided notice of the Application.

On February 7, 2025, the CMC was continued to this date of April 11, with only counsel for applicants making an appearance.

Analysis:

“If a corporation has not issued memberships and (1) all the directors resign, die, or become incompetent, or (2) a corporation's initial directors have not been named in the articles and all incorporators resign, die, or become incompetent before the election of the initial directors, the superior court of any county may appoint directors of the corporation upon application by any party in interest.” (Corp. Code, § 5220, subd. (e).)

The circumstances presented in the Application warrant the appointment of one or more directors of the Corporation in order to act for the Corporation and to bring the Corporation fully into active status. The court is nonetheless concerned that adequate notice of this Application has been given. The only proof of service is to the Office of the California Attorney General by U.S. Mail. No other notice has been given to any party, and it is unclear whether any other notice would be appropriate or necessary.

The court notes a related provision of the Corporations Code:

“Except upon notice to the Attorney General, no director may resign where the corporation would then be left without a duly elected director or directors in charge of its affairs.” (Corp. Code, § 5226.)

Notices under section 5226 are to be provided electronically to the California Attorney General. (Cal. Code Regs., tit. 11, §§ 328, 329, subd. (e).) Insofar as the request in this Application invokes similar issues as under section 5226, providing notice consistent with these regulations would be calculated to ensure that the Attorney General has been provided notice of these proceedings and has had a reasonable opportunity to express the views of the that office.

At the same time, the court has before it no statements of information of the Corporation to confirm that there are no other interested parties to whom notice may be appropriate.

To ensure that there are no apparent notice issues, the court will require the following:

1.         Applicants shall serve the Application, the moving papers for this motion, and a copy of this order on the California Attorney General electronically consistent with the manner of notice to be given under California Code of Regulations, title 11, sections 328 and 329, and shall file proof of such service with the court; and,

2.         Applicants shall file with the court certified or otherwise adequately authenticated statements of information for the Corporation filed with the California Secretary of State since 2009.

The hearing on the motion and the case management conference will be continued to May 16, 2025.