Delaney v. Santafe Healthcare, Inc.

741 So. 2d 595, 1999 Fla. App. LEXIS 12032, 1999 WL 718476
CourtDistrict Court of Appeal of Florida
DecidedSeptember 9, 1999
DocketNo. 98-4146
StatusPublished
Cited by1 cases

This text of 741 So. 2d 595 (Delaney v. Santafe Healthcare, Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Delaney v. Santafe Healthcare, Inc., 741 So. 2d 595, 1999 Fla. App. LEXIS 12032, 1999 WL 718476 (Fla. Ct. App. 1999).

Opinion

VAN NORTWICK, J.

Appellant, Allen Y. Delaney, appeals a final judgment which denied his request to inspect the records of SantaFe HealthCare, Inc ., (SantaFe), appellee, pursuant to section 617.2103(3)(a), Florida Statutes (1995), based on the trial court’s finding that the request was not made for a proper purpose. SantaFe cross-appeals the trial court’s ruling that it is a quasi-public corporation. We reverse the trial court’s denial of the demand for inspection of records, because no competent substantial evidence supports the finding that appellant lacked a proper purpose for his inspection request. We affirm without further discussion SantaFe’s cross-appeal challenging the trial court’s finding that it is a quasi-public corporation. See McClung-Gagne v. Harbour City Volunteer Ambulance Squad, Inc., 721 So.2d 799, 801-02 (Fla. 1st DCA 1998).

Factual and Procedural Background

The record reflects that Alachua General Hospital, a public hospital, was built in 1925 to be used “for the care and treatment of all the sick people of Alachua County.” Ch. 10311, § 7, Laws of Fla. In the late 1970s, the Board of County Commissioners of Alachua County (the Board) leased the hospital to a not-for-profit corporation, Alachua General Hospital, Inc. (AGHI). In 1983, the Board conveyed the hospital to SantaFe, a not-for-profit corporation granted tax exempt status under Internal Revenue Code section 501(c)(3). The deed of conveyance contained covenants and restrictions requiring use of the hospital property for a community general hospital which would, among other things, “provide emergency health care as needed to all residents of Alachua County without regard to their ability to pay.” The deed also contained a reverter clause, as an alternative remedy, in the event the property was not used in the manner contemplated or the other covenants and restrictions were breached. The validity of this conveyance is currently the subject of separate litigation brought by Dr. Delaney [597]*597and others.1 In 1986, SantaFe conveyed the hospital back to AGHI, which in 1996 transferred the hospital to Shands Teaching Hospital, an affiliate of the University of Florida. From the late 1970s to the transfer in 1996, the hospital was operated by essentially the same management.

SantaFe was created in 1982, principally to administer the hospital, with one stated purpose being “to promote the general health and welfare of the citizens.” Pursuant to its initial articles of incorporation, SantaFe was “organized exclusively for public purposes.2 The covenants and restrictions accompanying the 1983 deed of the hospital to SantaFe required SantaFe to have members from the communities served by the hospital. Dr. Delaney, a medical doctor who practiced at the hospital from 1953 to 1987, at one point serving as chief of staff, was one of SantaFe’s initial members and remained a member until SanteFe refused his 1997 membership application.

The negotiations for the sale of the hospital in 1996 were, in large part, carried out in private. As part of the transaction, Shands required the Board to release its reversionary interests in the property.3 Dr. Delaney became concerned that, upon transfer of the hospital to Shands, the provision of indigent health care in Ala-chua County would be adversely affected. He submitted a request to SantaFe to inspect any of the records of SantaFe pertaining to the sale of the hospital to Shands, including records of the negotiations and events leading up to the sale, and the disposition of the proceeds of the sale. In a letter dated February 5, 1996, Dr. Delaney stated his purposes in obtaining this information, as follows:

1. To assess the stewardship and performance of officers and directors of the corporation to permit him to exercise his voting rights as a member in an informed and proper manner.
2. To permit him to carry out the stewardship obligations placed upon him as a public member from Alachua County by the conditions and terms of the conveyance of AGH from Alachua County to SantaFe Healthcare Systems, Inc. by deed of 1983.
3. To permit him to carry out his stewardship obligations as a public member to pursue a certain lawsuit [96-409CA] he has filed in the circuit court in and for Alachua County to determine whether the corporation has properly satisfied its commitments and obligations to Ala-chua County and its taxpayers and citizens.

At the same time, Dr. Delaney began a letter writing campaign in which he announced his belief that monies from the sale should be returned to Alachua County so that the provision of medical care to the people of Alachua County, particularly the indigent, would not be compromised.

SantaFe denied the request based upon its contention that Dr. Delaney did not have a “proper purpose” for the request. Dr. Delaney filed a complaint, which, among other things, sought inspection and copying rights under section 617.2103(3)(a), Florida Statutes (1995).

At the August 20,1998 bench trial, counsel for SantaFe explained that, as part of the 1996 sale, Shands agreed to provide for the health care of the indigent population; that the proceeds of the sale would be returned to SantaFe, a charitable foundation; and that SantaFe planned to use the [598]*598proceeds to begin a project to detect and prevent asthma in children in the Alachua area and surrounding communities. San-taFe also suggested that Dr. Delaney’s request for records was part of his overall plan to harm, if not destroy, SantaFe financially out of malice, retribution, ill-will, personal vendetta or misguided hostility. Upon conclusion of the evidence, the trial court entered a judgment denying Dr. Delaney’s inspection demand, finding that he did not have a proper purpose for the inspection. Although the trial court did not find that Dr. Delaney was acting out of malice or vindictiveness, the trial court concluded that appellant lacked a proper purpose because his “announced intent to take money from SantaFe Healthcare, Inc. and turn it over to Alachua County is at odds with the announced goals of San-taFe Healthcare, Inc.” This appeal ensued.

Proper Purpose for Inspection Under Section 617.2108, Florida Statutes (1995)

Section 617.2103(3)(a), Florida Statutes (1995), provides for inspection rights by members of a tax exempt, not-for-profit corporation, such as SantaFe. The statute provides, in pertinent part, as follows:

All books and records of such a corporation shall be kept in written form or in another form capable of conversion into written form within a reasonable time and may be inspected by any member, or his agent or attorney, for any proper purpose at any reasonable time.

The gravamen of the instant case is whether Dr. Delaney has a “proper purpose” for his request to inspect SantaFe’s records. “Proper purpose” is not defined in section 617.2103(3)(a). The term is defined for the purposes of inspection rights relating to other types of corporations in sections 607.1602(9) and 617.1602(7).

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741 So. 2d 595, 1999 Fla. App. LEXIS 12032, 1999 WL 718476, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delaney-v-santafe-healthcare-inc-fladistctapp-1999.