The La Jolla Community Planning Association, Inc.

This memorandum provides an outline of the various illegal and improper acts of the officers and board of trustees (equivalent to the board of directors in a for-profit corporation) of the La Jolla Community Planning Association, Inc., a California nonprofit corporation (hereinafter the "CPA"). The CPA is a planning organization sponsored, recognized and regulated by the City of San Diego, and was formed as a public benefit nonprofit corporation under the California Corporations Code.

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HISTORY

The CPA was originally formed as "La Jollans, Inc." back in the 1960's, and operated as the La Jolla's official planning group for the City of San Diego. Later on it's name was changed as required by the City rules to the "La Jolla Community Planning Association" and local land developers, real estate speculators, architects and designers slowly took steps to take control of it. For many years the CPA has simply acted as a rubber stamp for projects, especially those promoted by its own "Old Boy Network" of members and trustees in the development industry. Any attempts to wrest control of the CPA from the land development group have been met with underhanded tactics and outright election fraud as will be outlined in this memorandum.

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PATTERN OF VIOLATIONS

The CPA is required to operate under its own Bylaws, the California Corporations Code, the City's rules and regulations concerning official City sponsored planning organizations, and State and Federal law, including the Ralph M. Brown Act, California's open meeting law. It appears that many officers and trustees of the CPA who work in the land development, real estate or building design industry have co-opted the organization for their own purposes, using it as a 'rubber stamp' for their own projects and to provide cover from scrutiny of those projects by the public at large. Specifically, this memorandum will address:

• Violations of the CPA Bylaws and Code of Ethics by Officers and Trustees;
• Violations of the California Corporations Code nonprofit provisions; and
• Violations of the Ralph M. Brown Act and City Council Policies

The nature and extent of these violations is serious and the broad pattern of corrupt and self-serving activities of many trustees and officers also raises the question as to whether criminal liability may attach to some of those actions.

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VIOLATIONS OF THE CPA BYLAWS BY OFFICERS AND TRUSTEES

Over at least the past five years there have been many violations of the CPA's own Bylaws by CPA officers and trustees. What follows are but a few of those violations:

A former CPA President who worked in the land development industry unilaterally cancelled one of the December monthly meetings so prospective members could not complete the membership requirement of three meetings within the prior calendar year as is required by the Bylaws. The Bylaws concerning membership are written in such a way that a prospective member must attend at least three regular meetings in the calendar year before the election of trustees is to be held. See Article III, Sec. 2. (a CPA member in good standing is eligible to vote for trustees in the annual elections held each March and/or serve as a trustee)

Former President C. A. Marengo1 failed to forward the results of an important CPA vote to the City as required. A motion that the necessary findings for approval of the project could be made failed to pass. But Marengo did not forward that information to the City as a negative vote as was expected. Instead, he said later that to have a "no approval vote" on a project there must be a second motion to that effect and that motion must pass by a majority. This procedure is not the policy of the CPA, it is not in the CPA Bylaws nor is it found in Robert's Rules of Order.

Marengo canceled the scheduled 2003 CPA officer's election meeting with just a few hours notice. He claimed this was done "because there was no quorum" but it was clearly an attempt to delay the election until more of his supporters were in attendance. The remaining members met anyway and there was a quorum, but no election was held.

The 2003 officer's election was eventually held and Marengo lost the presidency to Orrin Gabsch. The City staff representative who had helped count the votes declared Gabsch the winner. Unbelievably, however, after the election had concluded and the meeting adjourned, CPA trustee and architect Mark Lyon was left alone with the ballots in a back room and rushed into the meeting room, declaring that "one ballot had been marked improperly". This changed the election results in the minds of the trustees involved in the violations, who then boycotted the meetings where Gabsch presided as President, making it difficult to have a quorum. Appeals by citizens to the City's Development Services Department brought the response that the City "did not want to get involved" and that the City "liked advisory groups to solve their own problems."

The CPA executive board has allowed trustees to continue in office even when it was clear they were not residents of La Jolla nor had their principal place of business in La Jolla as required. 2 This type of violation continues to this day, as there are questions as to whether certain trustees are residents or have their principal places of business in La Jolla. The immediate past President of the CPA, Yvette Marcum, a business associate of C.A. Marengo, withheld the minutes from La Jolla's Planned District Ordinance Committee ("PDO") which met January 19, 2006. These committee minutes should have been placed on a consent agenda and voted on by the entire CPA board February 2nd as was the standard procedure. Instead, Marcum sent the completed Bird Rock amendments back to the PDO Committee, essentially attaching them to CPA trustee and architect Mark Lyon's self-serving proposal to increase the number of stories allowed in Bird Rock and many other parts of La Jolla from 2 to 3 (coincidentally, Lyon is promoting a three story project in Bird Rock that will benefit from the change) Marcum did this so that Lyon's proposal's to rezone neighborhoods across La Jolla could appear together with the community approved Bird Rock amendments, giving them equal standing in the CPA consideration policy. A grievance was filed as to this underhanded violation of CPA procedures, but no response from the CPA's Grievance Committee has been received and none is expected anytime soon.

Marcum scheduled a "special" CPA meeting for February 23, 2006, to hear both the community supported Bird Rock PDO proposals as well as architect Lyons' 3 story changes. Marcum did this before the PDO meeting scheduled for January 19, 2006, and continued to demand that the "special meeting" proceed even though the PDO voted to separate the Bird Rock neighborhood amendments from Lyons' La Jolla-wide 3 story proposal. Marcum scheduled the additional special meeting rather than simply present the proposals at the regularly scheduled meeting which would occur 7 days later, on March 2, 2006. She did this to insure the meeting would be on a date when those trustees involved in the violations could be present for a vote. Marcum did not give a time and date for the special meeting at first because she "wanted to make sure there was a quorum." Strangely enough, the trustees who were not involved in the pattern of improprieties were never contacted by Marcum about their availability for the special meeting, thereby confirming the real reason for meeting on the 23rd as noted above.

On occasion motions made at the CPA meeting have been stopped because they were "not made relative to an agenda item." On other occasions motions have been passed on new items not on the agenda, with the motions being made by a trustee involved in the violations and voted for by the other trustees involved in the violations.

Although notified of the City's decision in October, 2005, that advisory groups should change their bylaws to conform to City standards, the CPA executive board has resisted appointing a committee to do so and Marcum has stated that such a committee should be "left to the next executive board."

In a final violation of its own Bylaws, CPA President Marcum failed to notice the "special meeting" of February 23, 2006, the meeting which would set the future course for the development of most of La Jolla. Notice of all meetings requires a minimum 72 hours notice.

During prior elections the secretary, who was a trustee involved in many of the above violations, refused to allow members to examine the attendance lists which determined who could vote in elections. There was deep concern among many members that the lists were being tampered with and yet, with no way to check, there was no way to verify who was eligible to vote or serve as a trustee.

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VIOLATIONS OF THE CPA CODE OF ETHICS BY OFFICERS AND TRUSTEES

The La Jolla Community Planning Association has set forth minimum Standards of Ethical Behavior (copy attached) for its members to adhere to. Unfortunately, certain trustees and members of the CPA have failed and continue to fail to act in compliance with its own Code of Ethics.

Specifically, the Code states that "members and associates who have a direct economic interest in any project that comes before the Association or any of its committees must disclose that interest in advance and must abstain from voting or participation in any manner as a member of the Association." Over the past five years, many of the trustees and officers of the CPA have failed to recuse themselves from votes on plans and/or projects that implicate a personal financial interest. Time and time again trustees have voted for projects and plans which would benefit them financially, and it is expected that many trustees will vote for the Lyon 3 story PDO revision proposal even though they will benefit as family members, business partners, architects, builders, or real estate brokers or agents of property owners in that zone. All of these trustees must recuse themselves from voting on the PDO proposals or face either criminal prosecution or civil litigation against them as a result of their illegal acts.

In its preamble, the Code of Ethics states that the CPA shall conduct itself in such a way as to earn the respect and confidence of the citizens of La Jolla. It seems however that the members of the Association have put their own interests before that of the community. This sort of act commands neither respect or confidence.

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VIOLATION OF CORPORATIONS CODE BY OFFICERS AND TRUSTEES

The Directors of the La Jolla Community Planning Association Have Committed Fraudulent and Dishonest Acts and Have Grossly Abused Their Authority and Discretion

The purpose of the CPA, as described in its bylaws, is to conduct "community planning activities for the community of La Jolla" and to "protect, improve, and beautify all areas of La Jolla..." With regards to specific individual development projects, the bylaws state that "the corporation review...should focus on conformity with the adopted Community Plan and/or the General Plan."

The trustees of the CPA have completely disregarded the stated purpose of the corporation and have instead acted in furtherance of their own self interests. Specifically, the board has:

• Recommended projects to the Planning Commission in which certain members of the board have a financial interest.
• Approved projects which conflict with Planned District Ordinances.
• Tampered with ballots during an election to insure a certain candidate was elected.

The Trustees of the La Jolla Community Planning Association Have Breached the Duty of Good Faith in Violation of Corporations Code § 5231

§ 5231 of the Corporations Code states that "a director shall perform the duties of a director...in good faith, in a manner such director believes to be in the best interests of the corporation..." The trustees of the CPA have clearly acted in bad faith in that many of the decisions made by them are in conflict with the stated purpose of the corporation. In particular, the board has:

• cancelled scheduled meetings to control the voting membership.
• conducted executive meetings by email, denying public access.
• Elected trustees that were not members of the CPA and who were not residents or business owners in La Jolla.

The CPA Has Refused to Allow its Members Access to Records in Violation of Corporations Code § 6333:

Corporations Code § 6333 states that "the accounting books and records and minutes of proceedings of the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of an member at any reasonable time, for a purpose reasonably related to such person's interests as a member." Certain members of the CPA have asked to have access to the records of the corporation, a request that has been continuously denied by the board.

Corporations Code § 5223:

"The superior court of the proper county may, at the suit of a director, or twice the authorized number of members or 20 members, whichever is less, remove from office any director in case of fraudulent or dishonest acts or gross abuse of authority or discretion with reference to the corporation or breach of any duty arising under Article 3 of this chapter, and may bar from reelection any director so removed for a period prescribed by the court."

Unless the CPA is disbanded and reformed by the City, certain trustees and members are prepared to proceed to file an action in the Superior Court to hold those officers and trustees who now control the CPA accountable for their self-dealing actions.

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BROWN ACT AND CITY COUNCIL POLICY VIOLATIONS

What is the Ralph M. Brown Act?

The Ralph M. Brown Act was created to ensure that actions and deliberations of local "legislative bodies" be open to the public, "and all persons shall be permitted to attend any meeting of the legislative body..." In addition, "at least 72 hours before a regular meeting, the legislative body of the local agency...shall post an agenda containing a brief general description of each item of business to be transacted or discussed at the meeting."

What Constitutes a "Legislative Body" within the meaning of the Brown Act?

The relevant definition within the Act as related to the La Jolla Community Planning Association is as follows: A "legislative body" is "A board, commission, committee, or other multi member body that governs a private corporation, limited liability company, or other entity that...is created by the elected legislative body in order to exercise authority that may lawfully be delegated by the elected governing body to a private corporation, limited liability company, or other entity."

CPA was created by an elected legislative body:

The San Diego City Council, an elected legislative body, created community planning groups pursuant to Council Policy 600-24. Specifically, Council Policy 600-24 states that "Community planning groups have been formed and recognized by the City Council to make recommendations to the City Council, Planning Commission, City staff, and other governmental agencies on land use matters..." The La Jolla Community Planning Association was formed pursuant to the guidelines set forth in Council Policy 600-24 and was therefore ‘created' by an elected legislative body within the meaning of the statute.

CPA was created in order to exercise authority:

Within the meaning of the Brown Act, the term ‘to exercise authority' is broad in scope. According to the Staff Analysis of the Assembly Committee on Governmental Organization, Section 54952.2 of the Brown Act was added in order to insure that "any multimember body which exercise any function of a legislative body of a local agency" is covered by the Act. The authority delegated to the community planning association is to "make recommendations...concerning the preparation of, adoption of, implementation of, or amendment to, the General Plan or a land use plan when a plan relates to each recognized community planning group's planning area boundaries." Clearly, reviewing proposed changes to the general plan is a function of the city council and the planning commission, and the CPA was created in order to exercise that governmental authority.

The authority given to the CPA was lawfully delegated

According to County of Los Angeles v. Nesvig,(1965) 231 CA2d 603, "The issue in each case of delegation is whether ultimate control over matters involving the exercise of judgment and discretion has been retained by the public entity." Here, the CPA plays an advisory role and the City Council retains the power to make decisions concerning land use issues. Because the City Council is the ultimate decision maker regarding these issues, the power given to the La Jolla Community Planning Association was lawfully delegated.

Violations of the Brown Act and the City Council Policies by the CPA

The La Jolla Community Planning Association, being a legislative body and therefore subject to the requirements of the Brown Act, has not complied with the open meeting requirements set forth therein. Specifically, members, trustees and officers have held meetings outside of noticed public meetings. Certain officers and trustees have communicated and directed other trustees and officers by way of e-mails, private telephone conferences and secret meetings, establishing how the trustees would vote at public meetings. A search of the computer hard drives of CPA trustees and officers, either by search warrants issued by government officials or subpoenas in civil litigation brought by private individuals would provide the proof of these illegal communications. The Brown Act rules relating to open meetings and conflicts of interest are mirrored in City Council Policy 600-24, which governs the operation of local planning groups.

The recent history of the CPA is replete with instances where a majority of trustees (ie.: those engaged in illegal activities) have prior knowledge of how corporate management will vote. Many of these instances involve not only votes on certain development projects, but even votes by the members for those running for trustee positions. The depth of the Brown Act and City Council Policy violations by the CPA significant and longstanding.

The bright light of disclosure must be brought to bear on the CPA and the illegal activities of some of its officers and trustees. A full and complete investigation of all CPA actions over the past five years, as well as a close scrutiny of its management officers, is warranted and should be welcomed by those members and trustees of the CPA who have not participated in the violations described above.

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Report to the Board of Trustees

La Jolla Community Planning Association

RE: Disqualification for Board Seats/ Joste (Josephus) H. Bende and Robert W. Thiele

DATE: Updated June 5, 2003

This report concerns the fact LJCPA Trustees Joste (Josephus) H. Bende and Robert W. Thiele are no longer qualified to be members of the LJCPA and therefore are automatically disqualified to be Trustees of the LJCPA. The following information and the attached documentation provide the facts and legal basis for their disqualification. Property ownership information contained herein was re-verified as correct by a public records search on June 5, 2003.

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Member/Trustee Qualification Under the LJCPA Bylaws

Article III, Section 2 of the LJCPA Bylaws states that:

Section 2. MEMBERS - The members of the corporation shall consist of those members of the community who are at least eighteen (18) years of age and (a) have attended at least one-third or three (3) (whichever is less) of the regular public meetings of the Community Planning Association of La Jolla in the immediate prior calendar year that commenced on January one (1) and ended on December thirty-one (31), and (b) who either (1) own property in La Jolla or, (2) reside in La Jolla, or (3) have their principal place of business or employment in La Jolla. Evidence of attendance for this purpose shall be kept in the records of the corporation, and maintained by the Secretary of the corporation. The boundaries of La Jolla for the purpose of determining the foregoing eligibility shall be those of Article, 1, Section3. Members shall continue in good standing until such time as they fail to meet the eligibility requirements. (emphasis added)

The following information and attachments will clearly show that Mr. Bende and Mr. Thiele neither own real property in La Jolla, live in La Jolla, nor have their principal place of business in La Jolla.

In addition, and in light of the disqualification of Mr. Bende and Mr. Thiele, the number of Trustees needed to establish a quorum is reduced pursuant to Article VII, Section 3, which states:

Section 3. QUORUM A majority of the Trustees in office at any time shall constitute a quorum for the transaction of business, with the exception that Ex Officio Trustees shall not be included in the requirements for a quorum, nor in constituting such a quorum. (emphasis added)

Application of these unambiguous provisions of the Bylaws to the following information and documentation concerning Mr. Bende and Mr. Thiele indicates that not only are Mr. Bende and Mr. Thiele disqualified from serving as officers and/or Trustees of the LJCPA, but that they cannot be members of LJCPA as well. In addition, the quorum requirement is adjusted to be a majority of the 16 Trustees then in office, ie.: 9 Trustees will constitute a quorum.

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Disqualification of Joste (Josephus) H. Bende
Residence/ Property Ownership/ Principal Place of Business

Interestingly, Mr. Bende presently serves as the President of the Rancho Penasquitos Planning Board. He resides on Avenida Grande in the City of San Diego, Zip Code 92129 (Rancho Penasquitos) in a home which he owns (see attached public record). County records indicate that he does not own any other real property in San Diego County.

Furthermore, Mr. Bende's principal place of business is with Jain Malkin, Inc., a design firm located on Santa Fe Street in the City of San Diego, Zip Code 92109, as confirmed by a telephone call to the firm (also see photo under ‘Meet the Firm's Staff," at ‘www.jainmalkin.com'). As established by the records of the License Inquiry Unit of the California Architects Board ("CAB"), his address in Rancho Penasquitos is where his architectural license is registered (see attached memo from Sue Martin at the CAB). As such, he does not maintain his principal place of business in La Jolla.

Because he neither lives in La Jolla, owns property nor maintains his principal place of business here, Mr. Bende is automatically disqualified and is no longer a Trustee of the LJCPA.

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Disqualification of Robert W. Thiele
Residence/ Property Ownership/ Principal Place of Business

Mr. Thiele resides at 237 Brookes Ave., San Diego, Zip Code 92103, in a home that he owns (see attached public record). County records indicate that he does not own any other real property in San Diego County.

Mr. Thiele's principal place of business is shown in the Yellow Pages as the Brookes Ave. address (see attached page) and is further established by the records of the License Inquiry Unit of the CAB is at that Brookes Ave. address (see attached memo from Sue Martin at the CAB). As such, he does not maintain his principal place of business in La Jolla.

Mr. Thiele has stated that his "family" owns property in La Jolla. Under California law, "families" do not own property; individuals and legal entities such as corporations own property. A review of public records shows that a California corporation known as "Ross Thiele & Son" owns property at 1227 Prospect Street in La Jolla (See attached public record for Prospect Street property and printout from the Secretary of State). A "John W. Thiele" is identified as the agent for that corporation. In any event, mere ownership of stock in a corporation does not legally constitute personal "ownership" of the real property held by the corporation.

Mr. Thiele does, however, appear to be the agent for a different California corporation known as "Robert W. Thiele Associates," whose official mailing address is "237 W. Brookes Ave., San Diego, Zip Code 92103" (See attached printout from the Secretary of State).

Because he neither lives in La Jolla, nor owns property or maintains his principal place of business here, Mr. Thiele is automatically disqualified and is no longer a Trustee of the LJCPA.

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