San Diego JACL to Decline to Pursue Further Litigation Against Kiku Gardens

Open letter to the San Diego Community:

 

Many of you have inquired about the San Diego JACL’s (SDJACL) lawsuit against Kiku Gardens.  After nearly two years of litigation, the SDJACL Board of Directors has agreed to stop pursuing these claims against Kiku Gardens.  This is due to a recent ruling in an arbitration proceeding opining that the statute of limitations for filing these claims had expired. Though SDJACL disagrees with the arbitrator’s ruling and has the right to continue to pursue this litigation through further judicial appeals, the Board has concluded that it is now time for the Chapter to move forward with renewed resolve and focus on our mission statement “to promote universal civil rights and social justice, foster cross-cultural education and understanding, and preserve and cultivate the heritage and legacy of the Japanese American community in San Diego.”

 

The following addresses the most common questions we have received about this dispute.

 

Q:  What was the lawsuit about?

 

A:  The lawsuit involved a dispute regarding a $600,000 donation made to Kiku Gardens from SDJACL in 2010. 

 

In 2010, SDJACL had decided to distribute $150,000 each to the Pioneer Oceanview United Church of Christ, Buddhist Temple of San Diego, the San Diego Japanese Christian Church, and the Japanese American Historical Society of San Diego, as well as $50,000 to Asian Pacific VFW Post 4851.  These funds were donated with relatively few conditions, after the intended use had been reviewed by the SDJACL.

 

The $600,000 donation to Kiku Gardens was meant to help provide more housing options for the aging Nisei and few remaining Issei in our community.  At the time, Kiku Gardens was operating a facility that housed 100 seniors. So, SDJACL agreed to donate $600,000 in one lump sum check to Kiku Gardens to provide for the acquisition of a new senior housing facility or a new senior care services facility. 

 

The SDJACL Board originally approved this donation in September 2010 on the condition that it would “be used within 5 years for a new senior care and/or senior housing facility, otherwise to be returned to San Diego JACL.” 

 

The donation agreement was later supposedly changed in November 2010 to allow the $600,000 donation to be used for “(i) new adult senior care services and/or (ii) the development of a new senior housing facility.”  SDJACL’s position is that this change removing the condition that the donation be used for a new facility or otherwise be returned was never properly approved by the SDJACL Board of Directors and therefore was not authorized.

 

At the time this occurred, three individuals were serving on both the SDJACL and Kiku Gardens boards. One of these individuals was also the Executive Director of Kiku. 

 

In 2014, Kiku Gardens sold its only facility and no longer had the ability to house any seniors at all.  By 2017, when it appeared to SDJACL that Kiku Gardens did not use SDJACL’s $600,000 donation to acquire a new facility and did not have adequate plans, if any, to do so, SDJACL believed that Kiku Gardens had violated the original condition on the $600,000 donation, which required that the donation “be used within 5 years for a new senior care and/or senior housing facility, otherwise to be returned to San Diego JACL.”

 

SDJACL also came to believe that the $600,000 donation was not being properly monitored or managed as originally intended.

 

As a result of these facts, among others, SDJACL sought recovery of some or all of the $600,000 donation based on claims including breach of fiduciary duty, improper diversion of gift funds, negligence, and breach of contract.

 

Q:  Why a lawsuit?

 

A:  SDJACL Board believed that initiating the lawsuit was necessary in order to act as a responsible steward of community funds, specifically its substantial donation ($600,000) to Kiku Gardens.  The SDJACL Board believed that pursuing the lawsuit was its only recourse after it attempted on multiple occasions (without success) to settle this dispute without continued litigation.

 

Looking beyond what the chapter believes was Kiku Garden’s noncompliance with the restrictive gift agreement, SDJACL believes that its substantial donation was not being used in a way that offered the benefit to our community that SDJACL had originally intended.  We encourage the community to hold Kiku Gardens accountable for the responsible planning for and use of that $600,000 donation and to ensure it is ultimately used in the community’s best interests.

 

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If anyone wishes to have a copy of the legal complaint or if you have any other questions, please provide your request or questions via email to info@jaclsandiego.org.

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