Court Opinion

ID: 9513223
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:33:02.34827+00
Date Added: 2024-06-11T09:05:46.899905
License: Public Domain

SANDSTROM, Justice.
[¶ 1] Martin Wishnatsky appeals from a district court order denying his motion to intervene as a defendant in this action under Rule 24(a), N.D.R.Civ.P. Because Wishnat-sky has a cognizable First Amendment right to receive ministry, an interest established by the Attorney General’s own words as sufficiently distinct from the defendants’, we reverse the trial court’s order and direct the trial court to allow intervention.
[¶ 2] Family Life Services, Inc. and Help and Caring Ministries, Inc. are nonprofit corporations with charitable, educational, and religious purposes. Darold Larson operates and controls these corporations. He is also a trustee of the Christian Caring Ministry Trust, a charitable trust owning the house Larson lives in and other property used to transfer funds between various entities and accounts controlled by Larson.
[¶ 3] On January 9, 1996, the Attorney General, acting on behalf of the State, sued FLS, doing business as Family Life Credit Services, Help and Caring Ministries, Darold Larson, and two other corporate and nine individual defendants, alleging Larson, with the assistance of the other individual defendants, defrauded personal judgment creditors and provided himself and others with personal benefits in violation of state law and the bylaws and articles of incorporation of the defendant non-profit corporations. The suit also alleged Larson commingled funds and invaded trust accounts belonging to FLS clients, for his own personal benefit. The State sought dissolution of Family Life Services and Help and Caring Ministries or, in the alternative, replacement of the current officers and directors with an independent board of directors and officers elected by the independent board. On January 25, 1996, the court appointed a receiver to manage and operate Family Life Services and Help and Caring Ministries during the pendency of the lawsuit. The court concluded the appointment of a receiver was appropriate because the defendant corporations:
“... have engaged in a continuing pattern of abuse of the authority granted them by law and it further appears that liquidation of these corporations should precede entry of the order of dissolution.”
[¶ 4] On April 10, 1996, Wishnatsky filed a petition to intervene as a defendant in the lawsuit as a matter of right under N.D.R.Civ.P. 24(a). After hearing, the court denied the motion and Wishnatsky appealed. Wishnatsky argues the district court erred in denying his request to intervene and requests this court to reverse the lower court and grant him full status as a party defendant in this lawsuit.
[¶ 5] N.D.R.Civ.P. 24(a), allows intervention of right to protect an interest in the subject of an action:
“(a) Intervention of Right. Upon timely application anyone must be permitted to intervene in an action if: (i) a statute confers an unconditional right to intervene; or (ii) the applicant claims an interest relating to the property or transaction that is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.”
[¶ 6] In Fisher v. Fisher, 546 N.W.2d 354, 355 (N.D.1996), we summarized the scope of our review of a court order involving a motion to intervene:
“In considering whether a party may intervene of right under Rule 24(a), N.D.R.Civ.P., we review any findings of fact made by the trial court under the clearly erroneous standard of review contained in Rule 52(a), N.D.R.Civ.P. However, the ultimate question of whether a party has a right to intervene in an action is a question of law that is fully reviewable.”
[¶ 7] In this action, the Attorney General contends Darold Larson exercises absolute control over the entities, for his personal financial benefit and gain. The other defendants, the Attorney General contends, have acquiesced in the financial abuse of the entities, conduct which would breach their fiduciary duty. The district court found the Attorney General’s contentions and support*528ing documentation sufficiently persuasive to grant extreme interim remedies.
[¶ 8] Wishnatsky sought to intervene to protect, among others, his First Amendment right to receive ministry. U.S. Const. amend. I; see Red Lion Broadcasting Co. v. Federal Communications Comm’n, 395 U.S. 367, 390, 89 S.Ct. 1794, 1806-07, 23 L.Ed.2d 371 (1969) (“[T]he right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences may not constitutionally be abridged”).
[¶ 9] Distinct from the defendants, there is no allegation, contention, or evidence Wish-natsky has abused any of the entities for his personal financial gain, nor breached a fiduciary duty to any of the entities. Wishnatsky asserts his First Amendment religious freedom right to receive ministry, ministry manifesting a commitment to the unborn. No one disputes Wishnatsky sincerely holds his religious beliefs and commitment.
[¶ 10] Which defendant shares Wishnat-sky’s First Amendment interest unencumbered by allegations of personal wrongdoing? Under the Attorney General’s allegations, each defendant has personal exposure and interests potentially at odds with Wishnat-sky’s. The Attorney General’s complaint alleges wrongdoing by each of the defendants, seeks to dissolve the corporate defendants, seeks to require the individual defendants to repay allegedly illegal loans and payments, seeks to assess the defendants a civil penalty of $5,000 for each alleged violation of N.D.C.C. Ch. 13-07, and to have the defendants pay all the Attorney General’s costs, expenses, and attorney’s fees. Thus, each of the defendants individually faces serious personal financial peril, creating the real potential of a conflict.
[¶ 11] Which defendant has the resources to adequately defend in this action after the receiver has seized all the available assets and will not release any for a defense? The defendants have repeatedly told the trial court that the unavailability of funds — the receiver and the court’s refusal to release any funds — severely impairs their ability to mount an adequate defense. For example, in their “Motion to Allot Funds for Legal Defense,” the Boards of Directors of Family Life Services, Inc. and Help and Caring Ministries, Inc. stated, “The corporate funds ... are in the hands of the receiver, leaving the boards of directors without any means to employ counsel.”
[¶ 12] At the July 18, 1996, hearing on the “Motion to discharge receiver and Motion to intervene,” counsel for the defendants said:
“the collection plate of this ministry is ... under the hands of the receiver ... [Family Life Services] ha[s] to have an attorney. ... These attorneys demand that they be paid ... [if] we don’t allow a certain amount of funding to pay your attorneys, the attorneys are going to say we quit, and ... those agencies lose by default.”
Defendant Darold Larson said, “They’re winning by default because we can’t even get legal representation.”
[¶ 13] In his affidavit, counsel for the defendants stated:
“That without payment for legal services rendered from January 9, 1996 through January 25, 1996, the Attorney General’s Office and/or receiver by their non-payment of the said attorney’s fees shall be able to cast a very chilling influence upon the said original administrator and the Board of Director’s ability to continue to have legal representation in the above-referenced matter.”
[¶ 14] Under Fisher v. Fisher, 546 N.W.2d 354, 355 (N.D.1996), in considering the right to intervention, this Court reviews any findings of fact under the clearly erroneous standard. But here the trial court made no findings of fact and offered no explanation of its denial.
[¶ 15] Our federal and State Constitutions protect the religious beliefs of both majorities and minorities. See U.S. Const., Amend. I; N.D. Const. Art. I, §3. We must never forget the role pursuit of religious freedom has played in the history of our nation. The Attorney General asserts there is no interference with Wishnatsky’s religious freedom because pro-life speakers are not barred from the state; the Attorney General has “only” seized the money that would have been used *529to bring in pro-life speakers. But a similar First Amendment argument was rejected by the United States Supreme Court when considering the claim that an individual’s First Amendment right to free expression was not violated by restricting the amount of money the individual could spend to make views known. Buckley v. Valeo, 424 U.S. 1, 19, 96 S.Ct. 612, 684-35, 46 L.Ed.2d 659 (1976) (“A restriction on the amount of money a person ... can spend on ... communication ... necessarily reduces the quantity of expression. ...”).
[¶ 16] Granting Wishnatsky’s petition to intervene would not mean in other cases endless interventions would occur. “By the very definition of intervention the intervenor is a party to the action.” 59 Am.Jur.2d Parties § 170 (1987) (footnotes omitted). Once the interest is adequately represented, no additional intervention need be allowed. N.D.R.Civ.P. 24(a). But here, Wishnatsky’s interest is not adequately represented.
[¶ 17] This action may impair Wishnatsky’s First Amendment right to receive religious ministry. The potentially different interests, and the inadequacy of the defendants’ resources are each sufficient to entitle Wish-natsky to intervene.
[¶ 18] The district court order denying Wishnatsky’s motion to intervene as a defendant is reversed and the matter is remanded for entry of an order allowing Wishnatsky to intervene.
[¶ 19] MAKING, J., concurs.