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Leisure World Managers Sue 10 Who Asked to See Books

Foundation that runs the Seal Beach retirement community goes to court to keep financial data private. Those sued say it's meant to intimidate and silence them.

August 18, 2004|David Reyes | Times Staff Writer

Seeking to keep their financial records confidential, managers of a Seal Beach retirement community filed suit this week against a group of residents who have asked to see how their monthly dues are spent.

"They're turning up the heat [and] trying to intimidate us," said David Lyon, who was among 10 Leisure World residents sued by the Golden Rain Foundation in Superior Court.

The suit is the latest chapter in a clash between the Golden Rain Foundation and residents, who went to small-claims court in June to force the foundation to open its books.

Although a judge sided with the residents -- and awarded each $200 in fines levied against the foundation -- the managers appealed that decision.

Lyon, 59, and other defendants, including some in their 80s, believe the foundation's lawsuit this week is in retaliation for their small-claims court victory.

Foundation lawyers, however, have said their case is straightforward: They are under no obligation to open their books.

But if forced to, they seek costs for "retrieving and producing" documentation and for legal costs.

The foundation's lawsuit "is similar and has many parallels," to a so-called SLAPP lawsuit, Strategic Lawsuits Against Public Participation, said a legal expert.

Such an action is prohibited by a state statute designed to protect activists from frivolous lawsuits that seek to scare them away.

"The lawsuit is clearly a preemptive strike against the small-claims actions where [the residents] are only exercising their right to petition for documents in small-claims actions," said Mark Goldowitz, director of the California anti-SLAPP project.

Lawyers for the foundation declined to comment.

The legal fight has drawn the attention of other retirement communities, including Leisure World in Laguna Woods, where residents have raised $500 as part of a defense fund.

The Seal Beach group has not yet hired an attorney to respond to the suit, and members are unsure if they can raise the funds to do so.

Some of the dissident residents on Tuesday said they were stunned at how their request to view the retirement community's financial records had resulted in such a swift and detailed legal response, complete with hundreds of pages of exhibits.

The lawsuit names as defendants eight people who filed small-claims actions and two who filed no legal action but sent letters to the foundation seeking financial information.

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