REPORT OF THE UNINCORPORATED NONPROFIT
ASSOCIATION DRAFTING COMMITTEE
to the
Connecticut Law Revision Commission
December 15, 1998
Prepared by
Jo A. Roberts
Senior Attorney
Report of the Unincorporated Nonprofit Association Drafting Committee
to the Connecticut Law Revision Commission
On May 19, 1998 the Connecticut Law Revision Commission, acting in accordance with section 2-87(1) of the Connecticut General Statutes directing the Commission to "[r]eceive, consider and prepare comments and recommendations on proposed changes in the law recommended by the... National Conference of Commissioners on Uniform State Laws," voted to undertake a review of the Uniform Unincorporated Nonprofit Association Act. A drafting committee was formed consisting of attorneys knowledgeable about nonprofit associations, as well as representatives of nonprofit associations who reviewed drafts of the proposed act (A Drafting Committee Membership List is attached to this report as Attachment A). The drafting committee recommends that the Law Revision Commission approve the following report and attached proposed bill (Attachment B) for submission to the Judiciary Committee for consideration in the 1999 legislative session. Unless otherwise noted, all references to statutes in this report are to sections of the Connecticut General Statutes.
I. OVERVIEW OF PRESENT CONNECTICUT LAW
A review of Connecticut law reveals that Connecticut appears to have granted near-legal entity status to unincorporated or voluntary associations, albeit in a piecemeal fashion over the past one hundred fifty years. Initially, both Connecticut statutory and case law are inconsistent in their use of terms when referring to certain groups that appear not to have any specified legal status. Some cases and statutes use the term "voluntary association," an undefined term. Whether the term includes both concepts of nonprofit and unincorporated, or even whether it refers to one concept or the other, is unclear. Some statutory references are simply to "unincorporated associations," which is less problematic.
Notwithstanding the difficulty in determining with assurance to what kind of entity present Connecticut law refers, both case and statutory law seem to allow associations to sue and be sued (section 52-76 permits actions to be brought by and against voluntary associations), and to provide members with some protection against individual liability for obligations of the association or of other members. Azzolina v. Sena, 119 Conn. 81 (1955); section 31-114 (this statute limits the liability of members for the "unlawful" acts of others). Connecticut law does not permit associations to acquire, hold or transfer property as an entity, nor does it protect individuals from liability for their own actions as association members.
Connecticut law specifically grants powers similar to those of a corporation to both religious societies (section 33-264a et seq.) and condominium associations, whether or not incorporated (section 47-243 et seq.). Statutory law also defines an unincorporated association as a "person" for certain purposes (under the Connecticut Unfair Trade Practices Act and under the Connecticut Antitrust Act), as well as including "societies and associations" under the definition of "person" found in section 1-1 (k), which governs statutory construction throughout the general statutes. Further, statutory law permits both shareholders of corporations and members of unincorporated associations to bring derivative actions against the corporation or association for its failure to enforce a right which properly may be asserted by it (section 52-572j). Thus, Connecticut seems to favor granting unincorporated associations some status separate from its members, although it does so somewhat equivocally.
Adopting the proposed Unincorporated Nonprofit Association Act would aggregate the currently scattered Connecticut law pertaining to unincorporated associations and would make definitive statements about the status of unincorporated nonprofit associations, those being that:
1. Unincorporated nonprofit associations are separate legal entities for purposes of acquiring, holding and transferring property, especially real property;
2. Unincorporated nonprofit associations have authority to sue and be sued as separate legal entities; and
3. Members of unincorporated nonprofit associations are not personally liable in contract and tort for activities of the association merely because of their membership in the association.
In addition, and consistent with existing law, the Act furthers the laudable goal of encouraging volunteerism by providing members of unincorporated nonprofit associations more certainty about the extent of their individual liability for association affairs and by providing those who do business with such associations assurance that they are dealing with legally recognized entities. Presently both federal and state law foster volunteering by, e.g., exempting certain organizations from federal income tax liability (IRC ' 501(c)(3)), by extending personal liability protection to officers, directors and trustees of certain organizations (section 52-557m), by immunizing persons and nonprofit organizations or corporations that donate or distribute food (section 52-557l) and by exempting from payment of state sales and use taxes those organizations that are tax-exempt under federal law.
II. SUMMARY OF THE UNINCORPORATED NONPROFIT ASSOCIATION ACT (the Act)
The Act is based substantially on the Uniform Unincorporated Nonprofit Association Act. The discussion below and in comments to some sections of the Act include material from the Prefatory Notes to the Uniform Act.
A. General Overview of the Act
The Act reforms the common law concerning unincorporated nonprofit associations in three important areas: authority to acquire, hold and transfer property, especially real property; authority to sue and be sued as an entity; and contract and tort liability of officers and members of the association. It was drafted primarily with small, informal associations in mind. These associations are likely to have no legal advice and unlikely to consider legal and organizational questions, including whether to incorporate. The Act provides better answers than the common law for a limited number of legal problems, and its answers are more in accord with the expectations of those participating in the work of the association than is the common law.
The Act does not apply to nonprofit associations that are charitable trusts or corporations, and does not deal with issues of governance and membership of associations. The Act specifically excludes its application to certain associations that are covered by other state law.
Except as noted above, the Act applies to all unincorporated nonprofit associations. It is not confined to the nonprofit associations that are described in ' 501(c)(3), (4) and (6) of the Internal Revenue Code. Therefore, the Act covers unincorporated philanthropic, educational, scientific and literary clubs, unions (except where specifically excluded), trade associations, political organizations, cooperatives, churches, hospitals, condominium associations (except where specifically excluded), neighborhood associations and all other unincorporated nonprofit associations.
The basic approach of the Act is that an unincorporated nonprofit association is a legal entity for the purposes the Act addresses. It does not make these associations legal entities for all purposes. The courts must determine whether to use the Act by analogy to conclude that an association is a legal entity for some other purpose.
Many of the provisions of the Act are intended to be supplemented by other existing law. For example, Section 6 of the Act, which provides for the filing of a statement of authority as to real property, does not provide details concerning the filing process. The section leaves to other law such details.
Some concern has been raised that this Act may deter nonprofit associations from incorporating, thus depriving the public of protections that incorporation would provide. Clearly, incorporation does provide governmental involvement that this Act does not. The drafting committee believes that the Act will more likely provide protections to members of nonprofit associations that would not otherwise incorporate, those without access to legal counsel, for instance, and will not deter more sophisticated groups, especially those that have consulted an attorney, from incorporating.
The unincorporated nonprofit association is now governed by a hodgepodge of common law and state statutes governing some of their legal aspects. This Act deals with a limited number of the major issues relating to unincorporated nonprofit associations in an integrated and consistent manner.
B. The Act With Commentary
Section 1. Short Title. This Act may be cited as the Uniform Unincorporated Nonprofit Association Act.
Section 2. Definitions. In this Act:
(1) "Member" means a person who, under the rules or practices of a nonprofit association, may participate in the selection of persons authorized to manage the affairs of the association or in the development of the nonprofit association.
(2) "Nonprofit association" means an unincorporated organization, other than one created by a trust, or voluntary association consisting of two or more members joined by mutual consent for a common, lawful, nonprofit purpose, but not including religious corporations or societies as defined in section 33-264. Holding an estate or interest in real or personal property in joint tenancy, tenancy in common or tenancy by the entireties does not by itself establish a nonprofit association, even if the co-owners share use of the property for a nonprofit purpose.
COMMENT
Coverage of the Act is limited to nonprofit associations because the Partnership Act covers for-profit operations of two or more persons that have not adopted another legal form. The definition limits the protections provided by the Act to lawful acts of nonprofit associations only. The term "voluntary association" is included in the definition because the term is used in both statutory and case law.
3) "Person" means an individual, corporation, business trust, estate, trust, partnership, nonprofit association, joint venture, government, governmental subdivision, agency or instrumentality or any other legal or commercial entity.
COMMENT
The drafting committee deviated from the Uniform Act by including nonprofit associations as "persons" under the definition. Connecticut law considers unincorporated associations "persons" for certain purposes (under Connecticut Unfair Trade Practices Act and Antitrust sections of the general statutes, e.g., "person" includes unincorporated associations, which could be nonprofit). A nonprofit association could be composed of other nonprofit associations – in fact we have at least one in Connecticut. The Nonprofit and Human Services Cabinet is the largest association of nonprofit associations in the state, some of which may be unincorporated.
(4) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico or any territory or insular possession subject to the jurisdiction of the United States.
Section 3. Supplementary general principles of law and equity. Principles of law and equity supplement this Act unless displaced by a particular provision of it.
Section 4. Territorial application. A nonprofit association may acquire, hold, encumber and transfer an estate or interest in real and personal property in this state, whether or not the nonprofit association or a member has any other relationship to this state.
Section 5. Real and personal property; nonprofit association as legatee, devisee, or beneficiary. (a) A nonprofit association is a legal entity separate from its members for the purposes of acquiring, holding encumbering and transferring an estate or interest in real and personal property.
COMMENT
At common law an unincorporated association, whether nonprofit or for profit, was not a separate legal entity, but an aggregate of individuals. Thus, a gift of property to an unincorporated association failed because no legal entity existed to receive it. Some courts in time became uncomfortable with this result. Some construed the gift as a grant to the officers of the association to hold the real estate in trust and manage it for the benefit of the association. Later some legislatures provided various solutions, including treating the association for these purposes as an entity.
Subsections (a),(b) overrule Connecticut case law that a voluntary association may not acquire, hold or transfer real property, except through its officers or members acting as fiduciaries. American Bible Society v. Wetmore, 17 Conn. 161 (1845) and section 47-6. Section 52-292 seems to permit a voluntary association to hold personal property: "The property of a voluntary association, whether held by it or by trustees for its benefit…." This statute, read together with case law prohibiting direct ownership of real property by a voluntary association, suggests that direct ownership of personal property is acceptable. (But see Bridgeport Brass Workers Union v. Smith, 15 Conn. Supp. 505 (1948): "Primarily, the right of possession of the property of a voluntary association is in the association, that is, in its members or their officers and agents." The property at issue included money, bonds and other funds and personal property. However, the case seems to have been decided before adoption of section 52-292).
(b) A nonprofit association in its name may acquire, hold, encumber or transfer an estate or interest in real or personal property.
(c) A nonprofit association may be a beneficiary of a trust or contract, a legatee or a devisee.
COMMENT
American Bible, supra, and Wardens and Vestry of Trinity Church, 22 Conn. 125 (1852), while permitting bequests to voluntary associations, require them to be held by fiduciaries on behalf of the association. However, section 45a-293 provides: "Within thirty days after the admission to probate of any will containing a devise or bequest to any corporation or voluntary association, the judge, clerk or assistant clerk of the court of probate… shall mail… a written notice thereof…." The statute seems to permit a devise or bequest directly to the association, although there is no affirmative statement to that effect in the statute. Subsection (c) makes definitive provision for such a transfer of property to such an association.
Section 6. Statement of authority as to real property. (a) A nonprofit association may execute and record a statement of authority to transfer an estate or interest in real property in the name of the nonprofit association.
COMMENT
A statement of authority may be, but is not required to be, filed for the nonprofit association to sell, lease, encumber or otherwise transfer an interest in real property. The subsection refers only to a nonprofit association's transfer of a property interest, not to the association's acquiring or holding such an interest.
(b) An estate or interest in real property in the name of a nonprofit association may be transferred by a person so authorized in a statement of authority recorded in the land records of the town in which a transfer of the property would be recorded.
COMMENT
The statement establishes the authority of the person named in it to act for the association in transferring property. Therefore, subsection (b) requires that the statement be recorded in the land records of the town where the transfer of the real property would be recorded.
(c) A statement of authority must set forth: (1) The name of the nonprofit association; (2) the federal tax identification number, if any, of the nonprofit association; (3) the address in this state, including the street address, if any of the nonprofit association, or, if the nonprofit association does not have an address in this state, its address out of state; (4) that it is a nonprofit association; (5) the name or title of a person authorized to transfer an estate or interest in real property held in the name of the nonprofit association.; and (6) the action, procedure, or vote of the nonprofit association which authorizes the person to transfer the real property of the nonprofit association and which authorizes the person to execute the statement of authority.
COMMENT
Subsection (c)(3) may pose a problem for some small associations that do not have a fixed address for conducting business. However, if the association distributes literature or files petitions, they are likely to have a mailing address. Subsection (c)(5) permits the association to identify either an individual or the holder of a particular office, such as president, as the person authorized to act on behalf of the association. The latter relieves the association from having to make additional filings on each change of officers.
(d) A statement of authority must be subscribed and sworn to by a person who is not the person authorized to transfer the estate or interest.
COMMENT
The stated formalities are intended to reduce the risk of fraud by having someone other than the person authorized in the statement execute the statement on behalf of the association.
(e) The town clerk shall index the statement of authority in the grantor index in the name of the nonprofit association.
COMMENT
This provision is intended to assure that the statement will be filed on the land records where persons dealing with the association would be most likely to search for it.
The drafting committee chose not to include a provision found in the Uniform Act that permits filing officers (town clerks) to collect a fee for recording a statement of authority. The committee believes section 7-34a, giving town clerks authority to collect fees for recording a variety of documents, is sufficient to permit imposition of a fee for recording a statement under this section.
(f) An amendment, including a cancellation, of a statement of authority must meet the requirements for execution and recording of an original statement. Unless canceled earlier, a recorded statement of authority or its most recent amendment is canceled by operation of law five years after the date of the most recent recording.
COMMENT
Subsection (f) makes a statement inoperative five years after its most recent recording. This prevents a statement whose recording is unknown to the present leadership from being effective. Thus, reliance on a statement that was recorded more than five years earlier is not a good faith reliance.
(g) If the record title to real property is in the name of a nonprofit association and the statement of authority is recorded in the land records of the town in which a transfer of real property would be recorded, the authority of the person named in the statement of authority is conclusive in favor of a person who gives value without notice that the person named in the statement lacks authority.
COMMENT
This subsection is intended to protect good faith purchasers for value without notice who rely on a statement. The subsection does not come into play where the signatures on the statement, deed, or both are forgeries. Instead, Section 3 applies and the Act would defer to other law.
(h) An otherwise valid transfer of an estate or interest in real property shall not be invalidated merely because the nonprofit association did not record a statement of authority in accordance with this section.
COMMENT
This subsection, not found in the Uniform Act, seeks to assure that the statement is held to be permissive, and that transfers of real property, not having any other defect that would render them invalid, will not be deemed so merely because the association has not filed a statement of authority.
Section 7. Liability in contract and tort. (a) A nonprofit association is a legal entity separate from its members for the purposes of determining and enforcing rights, duties and liabilities in contract and tort.
COMMENT
At common law, unincorporated associations, not being legal entities, could not be liable in tort, contract or otherwise for conduct taken in their names. On the other hand, their members could be. Courts borrowed from the law of partnership the concept that the members of the association, like partners, were co-principals. As co-principals, they were individually liable. Again courts and legislatures, responding to concerns of their constituents about this result, modified these rules. Courts found that, in large membership associations, some members did not have the kind of control or participation in the decision process that made it reasonable and fair to view them as co-principals. Legislatures also took steps. Perhaps the most striking are the statutes adopted in many states in the last decade excusing officers, directors, members and volunteers of non profit associations from liability for simple negligence.
Subsection (a) is a stronger statement of the legal status of an unincorporated nonprofit association than is found presently in Connecticut law.
(b) A person is not liable for a breach of a nonprofit association’s contract merely because the person is a member, is authorized to participate in the management of the affairs of the nonprofit association or is a person considered to be a member by the nonprofit association.
COMMENT
Presently, Connecticut common law does provide that mere membership in an association does not impose liability on the member for contractual liability of the association. Azzolina v. Sons of Italy, 119 Conn. 681, 691 (1935):
But when, as here, the purpose of the association is not business or profit, the liability, if any, of its members is not in its nature that of partners but that arising out of the relation of principal and agent, and only those members who authorize or subsequently ratify an obligation are liable on account of it. A person may authorize the obligation arising from a contract either by becoming or remaining a member knowing that such a contract would be reasonable and proper in order to carry out the purposes for which the association was formed or, if the contract is outside the scope of those purposes, by assenting to it or participating in the undertaking.
However, the threshold for "authorizing" an obligation is minimal under this language, and the holding most likely runs counter to the expectations of most members of nonprofit associations as to their liability vis-à-vis the association.
(c) A person is not liable for a tortious act or omission for which a nonprofit association is liable merely because the person is a member, is authorized to participate in the management of the affairs of the nonprofit association or is a person considered to be a member by the nonprofit association.
(d) A tortious act or omission of a member or other person for which a nonprofit association is liable is not imputed to any other person merely because that other person is a member, is authorized to participate in the management of the affairs of the nonprofit association or is a person considered to be a member by the nonprofit association.
COMMENT
Section 31-114 addresses member liability for the acts of other members. The statute relieves individuals of liability for the "unlawful" acts of others. This subsection expands liability protection to tortious acts as well.
(e) A member of, or a person considered to be a member by, a nonprofit association may assert a claim against the nonprofit association, except that employees represented for collective bargaining by a labor organization as defined in section 31-77 may not assert claims against labor organizations in contravention of section 31-114. A nonprofit association may assert a claim against a member or a person considered to be a member by the nonprofit association.
COMMENT
Sections 52-76 and 52-572j support this rule.
Section 8. Capacity to assert and defend; standing. (a) A nonprofit association, in its name, may sue or be sued and may institute, defend, intervene, or participate in judicial, administrative or other governmental proceedings or in an arbitration, mediation or any other form of alternative resolution.COMMENT
Proceedings by or against an unincorporated association presented similar problems. If it were not a legal entity, each of the members needed to be joined as parties plaintiff or defendant. Class actions offered another approach. Again, courts and legislatures, especially the latter, provided solutions. "Sue and be sued" status found its way into the law of most states.
This provision is in accord with section 52-76, although it is somewhat broader.
(b) A nonprofit association may assert a claim in its name on behalf of its members if one or more members of the nonprofit association have standing to assert a claim in their own right, the interests the nonprofit association seeks to protect are germane to its purposes, and neither the claim asserted nor the relief requested requires the participation of a member.
COMMENT
This provision is an accord with Connecticut law as articulated in Connecticut Assn. Of Health Care Facilities v. Worrell, 199 Conn. 609 (1986) that gave standing to associations to assert claims on behalf of the members. Worrell overturned Conn. Society of Architects, Inc. v. Bank Bldg. And Equipment Corporation, 151 Conn. 68 (1963) in which the court denied standing to a voluntary association because, according to the court, the association had no personal interest in the subject of the controversy. The Worrell case adopted the federal standards set out in Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 337 (1977). Those standards are set out in subsection (b) above.
(c) The property of a nonprofit association, whether held by it or by a fiduciary for its benefit, may be subject to any order or judgment against either the nonprofit association or the property.
COMMENT
This subsection, not included in the Uniform Act, restates a provision in present section 52-292 which the drafting committee recommends be repealed and replaced by this section.
Section 9. Effect of judgment or order. A judgment or order against a nonprofit association is not by itself a judgment or order against a member or a person considered to be a member by the nonprofit association, or a person authorized to participate in the management of the affairs of the nonprofit association, except as provided in section 47-259(b)(1).
COMMENT
This rule is in accord with section 52-292.
The exception refers to the Common Interest Ownership Act, which provides that: "… a judgment for money against the association, if recorded … is a lien in favor of the judgment lien holder against all of the units in the common interest community at the time the judgment was rendered." The drafting committee recommends including the reference to avoid any implication that this section of the Act overrides section 47-259(b)(1).
Section 10. Disposition of personal property of inactive nonprofit association. If a nonprofit association has been inactive for three years or longer, or a different period specified in a controlling document of the nonprofit association, a person in possession or control of personal property of the nonprofit association may transfer custody of the property:
(1) As provided by law or by a controlling document of a nonprofit association, provided the controlling document is consistent with other applicable law; or
(2) in the absence of any law or applicable provision in a controlling document of the nonprofit association, to a nonprofit association or nonprofit corporation pursuing broadly similar purposes or to a government, governmental subdivision, agency or instrumentality.
COMMENT
This section is intended as safe harbor for individuals left with personal property of a nonprofit association after the association has become inactive. The provision applies only to personal property, because other means of disposing of real estate are available through the courts. The commentary to the Uniform Act adds that: "A nonprofit association owning real property of significant value is unlikely to become inactive. In the rare case that it does, the assistance of a court may be obtained in making appropriate disposition of the real property, primarily to ensure good title."
Neither this section of the Act nor the comparable section of the Uniform Act provide for disposition of property in the event of voluntary dissolution of the association. The belief is that, upon voluntary dissolution, the members will make arrangements for disposition of the association's property, with any law addressing disposition of specific assets governing in the appropriate instances.
The proviso in subsection (1) was added at the request of the Attorney General's Office. The concern was that charitable organizations are required by law to convey property to other charitable organizations, and may not provide for other disposition in a controlling document of the association. While the drafting committee believes that the Act would not overrule any other law governing charitable organizations, the language was added to avoid any confusion in the matter.
Section 11. Appointment of agent to receive service of process. Service of process.
(a) Each nonprofit association may have and maintain a statutory agent for service in this state as provided in this section. A statutory agent for service shall be an individual who is a resident of this state.
COMMENT
This section is based on sections 34-104 and 34-105 (and departs somewhat from the Uniform Act) providing for service of process on limited liability companies. The section permits, but does not require, a nonprofit association to file a statement authorizing an agent to receive service. Subsection (a) limits the statutory agent for service for a nonprofit association to a natural person, rather than including, e.g., corporations or partnerships. For the small associations this Act primarily is intended to cover, this limitation is appropriate. Associations with more complex membership are likely to have access to legal counsel and would not need the protections offered by this Act.
(b) A nonprofit association's statutory agent for service shall be appointed by filing with the Secretary of the State a written appointment in such form as the Secretary of the State shall prescribe setting forth: (1) The name of the nonprofit association; (2) the federal tax identification number of the nonprofit association; (3) the address in this state of the nonprofit association, or if the nonprofit association does not have an address in this state, its address out of state; (4) the name of the statutory agent for service; and (5) the business and residence address of the agent. In each case the address shall include the street and number or other particular designation. Each written appointment shall also be signed by the statutory agent for service therein appointed.
COMMENT
Like Section 6 of this Act, this section, while not mandating the filing of a statement, requires certain formalities to be met if a nonprofit association chooses to make such a filing. In addition to this subsection, subsections (g) and (h) also require specified formalities intended to permit others to rely on any documents filed by the association under this section.
(c) A statutory agent for service may resign by filing with the Secretary of the State a signed statement in duplicate to that effect. The Secretary of the State shall forthwith file one copy and mail the other copy of such statement to the nonprofit association at the office of the nonprofit association designated in the appointment of the statutory agent for service. Upon the expiration of thirty days after such filing, the resignation shall be effective and the authority of such statutory agent for service shall terminate. A nonprofit association may revoke the appointment of a statutory agent for service by making a new appointment as provided in this section and any new appointment so made shall revoke all appointments theretofore made.
COMMENT
This subsection does not require a nonprofit association to file amendments updating the statement, since filing the statement originally is not mandated. However, subsection (g) does require that any amendment or cancellation an association chooses to file must meet the same requirements of the original appointment. A statutory agent for service may resign by filing a statement to that effect with the Secretary of the State, but is not required to do so. This subsection leaves to subsection (e) to describe the means of service if the association does not file an appointment, or does not update a filing.
(d) Any process, notice or demand in connection with any action or proceeding required or permitted by law to be served upon a nonprofit association may be served upon the nonprofit association's statutory agent for service by any proper officer or other person lawfully empowered to make service.
(e) If it appears from the records of the Secretary of the State that the nonprofit association has not appointed or maintained a statutory agent for service, or if the plaintiff or his attorney attach to the process, notice or demand an affidavit stating that the plaintiff does not know and, despite reasonable diligence, has been unable to ascertain the address of the nonprofit association or the address of any of its officers, or if it appears by affidavit endorsed on the return of the officer or other proper person directed to serve the process, notice or demand upon the nonprofit association's statutory agent for service appearing on the records of the Secretary of the State that such agent cannot, with reasonable diligence, be found at the address shown on such records as the agent's address, service of the process, notice or demand on the nonprofit association may, when timely made, be made by such officer or other proper person by: (1) Leaving a true and attested copy thereof together with the required fee at the office of the Secretary of the State or depositing the same in the United States mails, by registered or certified mail, postage prepaid, addressed to such office, and (2) depositing in the United States mails, by registered or certified mail, postage prepaid, a true and attested copy thereof, together with a statement by such officer that service is being made pursuant to this section, addressed to the nonprofit association at its last known principal office.
COMMENT
If a nonprofit association that is the subject of legal process has not filed an appointment of a statutory agent for service, or if the plaintiff files an affidavit asserting that the address of the association or of any officer of the association cannot be ascertained through reasonable diligence or if the serving officer cannot locate the association, service may be effected on the association by leaving a copy of the notice, demand or process at the office of the Secretary of the State.
The addition of the plaintiff's option of filing an affidavit asserting that, after reasonable diligence to discover it, the plaintiff does not know the location of the association is based on a similar provision in section 52-69. That statute applies where a plaintiff is trying to make a widow, widower or heirs parties to an action. If the plaintiff attaches an affidavit to the complaint stating that the plaintiff does not know who those persons are or where they reside, the court may make an appropriate order as to the notice to be given. The drafting committee added the language (not found in section 52-69): "… and, despite reasonable diligence, has been unable to ascertain the address". The drafting committee wanted to allow a plaintiff to proceed where, as is likely to be the case, a small association does not have a designated base of operations. However, the committee wanted also to balance the plaintiff's ability to proceed with the requirement that the plaintiff make some reasonable attempt to locate an address either for the association or for one of its officers.
Subdivision (2) requires the plaintiff to mail, by certified or registered mail, a copy of the process to the association's last known address. If no such address is known, the plaintiff would be relieved of this duty.
(f) The Secretary of the State shall file the copy of each process, notice or demand received by him as provided in subsection (e) of this section and keep a record of the day and hour of such receipt. Service made as provided in this section shall be effective as of such day and hour.
(g) An amendment to or cancellation of an appointment of a statutory agent to receive service of process must meet the requirements for execution of an original appointment.
(h) The execution of any document to be filed with, or delivered to, the Secretary of the State shall constitute an affirmation under the penalties of false statement by the person signing the document that the facts stated therein are true.
(i) Nothing contained in this section shall limit or affect the right to serve any process, notice or demand required or permitted by law to be served upon a nonprofit association in any other manner permitted by law.
COMMENT
In accordance with Section 3 of this Act that recognizes the interplay of this Act with other law, subsection (i) specifies that this section does not provide the exclusive means of serving process on a nonprofit association. For example, section 52-57(e) permits service of process on an officer of a voluntary association as provided in that section. This section of the Act would not preclude service in the manner described in section 52-57(e).
(j) The Secretary of the State shall charge and collect a fee, and remit it to the Treasurer for the use of the state, for filing an appointment of a statutory agent for service, an amendment or cancellation thereof or a resignation, in an amount charged for filing similar documents.
Section 12. Claim not abated by change of members or management. A claim for relief against a nonprofit association does not abate merely because of a change in its members or persons authorized to manage the affairs of the nonprofit association.
Section 13. Venue. For purposes of venue, a nonprofit association is a resident of the judicial district in which it has an office or in which it carries out its principal business or conducts its affairs.
Section 14. Severability clause. If any provision of this Act or its application to any person or circumstances is held invalid, the invalidity does not affect any other provisions or applications of this Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
Section 15. Savings clause. This Act does not affect any rights accrued before this Act takes effect or any action or proceeding then pending.
Section 16. Section 47-6 of the general statutes is repealed and the following substituted in lieu thereof:
Conveyances of real estate made to or by any corporation or [
the trustees of]any voluntary association [,] may be attested by witnesses interested therein, and may be acknowledged before properly authorized persons who are so interested.COMMENT
The deletion reflects provisions of the Act that now permit nonprofit associations to convey and receive conveyances of real estate directly, without the need for fiduciaries to hold the property for the benefit of the association.
Section 17. Repealer. Sections 52-76 and 52-292 of the general statutes are repealed.
COMMENT
These provisions of the general statutes are rendered unnecessary by Sections 8 and 5 of the Act, respectively.
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