Opinion ID: 2587359
Heading Depth: 4
Heading Rank: 2

Heading: Did the affected charities dismiss or compromise their claims against the Griffins for less than they were due under the state's charitable gaming laws?

Text: The attorney general's complaint alleged, among other things, that the Griffins failed to turn over the statutorily defined minimum percentage of gaming revenues to the Alaska Sports member charities and that the Griffins charged the member charities of the two MBPs inflated and excessive fees and rents. Evidence to support the state's first allegation is provided by the sworn affidavit of Jeff Prather, an employee of the Department of Revenue, who testified that the Griffins failed to turn over the required statutory percentage of their gaming proceeds to the Alaska Sports member charitiesa deficit which neared $500,000. There is also evidence from which to infer that the Griffins charged the Northern Lights member charities unreasonably high, and thus statutorily prohibited, fees and rents. In their defense, the Griffins argue that all of the affected charities agreed that the fees and rents were reasonable. But this is not uncontested. West High Alumni Association complained about the increased rent charged the charities. Further, it was expelled from the Northern Lights Gaming Co-Op after doing so. Although Northern Lights' minutes suggest that West High Alumni Association's membership in the MBP was terminated as a cost-saving measure, on summary judgment all reasonable inferences must be drawn in favor of the state. [33] The timing and circumstances of West High Alumni Association's expulsion, including the presence and participation of the Griffins' personal attorney at the board meeting at which it occurred, support an inference that the Griffins were retaliating against charities that complained that the Griffins' fees were too high. Northern Lights' joint venture agreement, moreover, gave the Alaska Charitable Gaming Association the right to expel any non-sponsoring member charity from the MBP. Given the evidence that the Alaska Charitable Gaming Association was a sham organization controlled by the Griffins, it is not unreasonable to infer that any other charity which agreed to the fees charged by the Griffins did so out of fear that it, too, would be subject to retaliation if it did not. With the possible exception of West High Alumni Association, there is no evidence that any of the affected charities received any compensation for withdrawing their claims against the Griffins. Although West High Alumni Association settled its claim, the Griffins presented no evidence as to the value of that settlement. West High Alumni Association was apparently insolvent, and there was evidence that the Griffins used the threat of adverse attorney's fees awards to persuade charities to withdraw from the case against them. Under these circumstances, it is reasonable to infer that West High Alumni Association, too, received little or nothing in return for settling its claim. As the attorney general has the authority to assert a charity's cause of action against a third party if that claim was dismissed or compromised for less than the charity was due to receive under the state's charitable gaming laws, and there was evidence in the record that the affected charities received less than they were due in exchange for dismissing or compromising their claims against the Griffins, the superior court erred in granting summary judgment against the state.