Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 09 8:04 AM-18CV005717
IN THE COURT OF COMMON PLEAS FRANKLIN COUNTY, OHIO State of Ohio, ex rel. Mike DeWine Attorney General of Ohio Charitable Law Section 150 East Gay Street, 23rd Floor Columbus, Ohio 43215, Plaintiff, v. Summer Rays, Inc. c/o Charles Kirk, Executive Director and statutory agent 6790 Tanya Terrace Reynoldsburg, Ohio 43068, Reynoldsburg Revolve Church c/o Charles Kirk, President and statutory agent 6790 Tanya Terrace Reynoldsburg, Ohio 43068, Charles Kirk 6790 Tanya Terrace Reynoldsburg, Ohio 43068, Marsha L. Kirk 6790 Tanya Terrace Reynoldsburg, Ohio 43068, Jacquelyn G. Kirk 6770 Tanya Terrace Reynoldsburg, Ohio 43068, Jenna Kirk 2782 E. Livingston Ave. Columbus, Ohio 43209, Juliette Kirk 6790 Tanya Terrace Reynoldsburg, Ohio 43068,
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Case No. Judge
COMPLAINT OF STATE OF OHIO
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: Tammy J. Gollihue : 6338 Beaver Lake Dr. : Grove City, Ohio 43123, : : Deborah L. Garrison : 1022 Twilight Dr. : Reynoldsburg, Ohio 43068, : : Teresa Perry : 1698 Cedar Creek Court : Grove City, Ohio 43123 : : And : : Heartland Bank : c/o David A. Skrobot, statutory agent : 471 E. Broad St., Suite 1810 : Columbus, Ohio 43215 : : Defendants. : ______________________________________________________________________________ Plaintiff State of Ohio, ex rel. Mike DeWine, who is the duly elected, qualified and acting Attorney General of Ohio, hereby avers and alleges: I.
INTRODUCTION 1.
Plaintiff, State of Ohio, by and through the Attorney General of Ohio, Mike
DeWine (“Attorney General” or “Attorney General’s Office”), having reasonable cause to believe that violations of Ohio’s charitable laws have occurred, brings this action in the public interest and under the authority vested in the Attorney General by Ohio Revised Code 109.23, et seq. (“Ohio Charitable Trust Act”), Revised Code 1716.01 et seq. (“Ohio Charitable Organizations Act”), and the Attorney General’s common law authority to enforce charitable trusts.
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2.
This is an action seeking reformation of a charitable trust, injunctive relief,
equitable relief, statutory penalties, and damages for Defendants’ violations of the common law, the Ohio Charitable Trust Act, and the Ohio Charitable Organizations Act. II.
DEFENDANTS, JURISDICTION, AND VENUE A.
Summer Rays, Inc.
3.
Defendant Summer Rays, Inc. (“Summer Rays”) is an Ohio nonprofit corporation
that was formed on or about October 6, 2000. 4.
Defendant Charles Kirk (“Chuck Kirk”) is the statutory agent for Summer Rays.
5.
Summer Rays has applied for and received 501(c)(3) status from the Internal
Revenue Service (“IRS”). 6.
Summer Rays is a “charitable organization” as that term is defined in
R.C. 1716.01(A) and a “charitable trust” as that term is defined in R.C. 109.23. 7.
For approximately the last ten years, Summer Rays has offered and provided
housing to individuals who have suffered from drug and alcohol addiction. B.
Reynoldsburg Revolve Church
8.
Defendant Reynoldsburg Revolve Church (“RRC”) is an Ohio nonprofit
corporation that was formed on or about July 11, 2014. 9.
Chuck Kirk is the statutory agent for RRC.
10.
Upon information and belief, RRC claims to be exempt from registering with the
IRS under section 501(c)(3) of the Internal Revenue Code on the basis of being a church. 11.
RRC is a “charitable organization” as that term is defined in R.C. 1716.01(A) and
a “charitable trust” as that term is defined in R.C. 109.23.
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C.
Chuck Kirk
12.
Chuck Kirk was an incorporator of both Summer Rays and RRC.
13.
At all relevant times, Chuck Kirk directed and operated Summer Rays both as the
president of the board of directors and as the Executive Director. 14.
At all relevant times, Chuck Kirk directed and operated RRC both as the president
of the board of directors and as the Chief Executive Officer. 15.
Chuck Kirk alleges that he resides at 6790 Tanya Terrace, Reynoldsburg, Ohio
16.
At all relevant times, Chuck Kirk has been legally married to Defendant Marsha
43068.
L. Kirk (“Marsha Kirk”). 17.
Chuck Kirk has personally participated in the violations of law described in this
Complaint, or, through his actions or inaction, authorized, directed, adopted, ratified, allowed, or otherwise caused or permitted such violations to occur. This action is being initiated against Chuck Kirk both individually and in his capacity as a director, trustee, officer and/or agent of Summer Rays and RRC. D.
Marsha Kirk
18.
Marsha Kirk was an incorporator of Summer Rays.
19.
Marsha Kirk resides at 6790 Tanya Terrace. The owners of record of 6790 Tanya
Terrace are Defendants Jacquelyn Kirk, Jenna Kirk, and Juliette Kirk. 20.
In official documents required by law to be filed with both the Attorney General’s
Office and the IRS, Marsha Kirk is identified as serving on the board of directors of Summer Rays since at least 2010.
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21.
Marsha Kirk has personally participated in the violations of law described in this
Complaint, or, through her actions or inaction, authorized, directed, adopted, ratified, allowed, or otherwise caused or permitted such violations to occur. This action is being initiated against Marsha Kirk both individually and in her capacity as a director, trustee, officer and/or agent of Summer Rays. E.
Jacquelyn Kirk
22.
Defendant Jacquelyn G. Kirk (“Jacquelyn Kirk”) is the daughter of Chuck Kirk
and Marsha Kirk. 23.
Jacquelyn Kirk currently resides at 6770 Tanya Terrace, Reynoldsburg, Ohio
43068. The owners of record of 6770 Tanya Terrace are Jacquelyn Kirk, Jenna Kirk, and Juliette Kirk. 24.
Jacquelyn Kirk was an incorporator of RRC.
25.
In official documentation required by law to be filed with the IRS, Jacquelyn Kirk
is identified as serving as the treasurer of RRC beginning no later than January 1, 2015. 26.
Jacquelyn Kirk is the sole, authorized user and/or signatory for two bank accounts
that have been opened by RRC. 27.
In official documentation required by law to be filed with the Attorney General’s
Office Jacquelyn Kirk is identified as serving on the board of directors of Summer Rays beginning in 2014. 28.
Jacquelyn Kirk has personally participated in the violations of law described in
this Complaint, or, through her actions or inaction, authorized, directed, adopted, ratified, allowed, or otherwise caused or permitted such violations to occur. This action is being initiated
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against Jacquelyn Kirk both individually and in her capacity as a director, trustee, officer and/or agent of Summer Rays and RRC. F.
Jenna Kirk
29.
Defendant Jenna Kirk (“Jenna Kirk”) is the daughter of Chuck Kirk and Marsha
30.
Jenna Kirk currently resides at 2782 E. Livingston Ave., Columbus, Ohio 43209.
31.
Jenna Kirk was an incorporator of RRC.
32.
Upon information and belief, Jenna Kirk serves on the board of directors of RRC.
33.
In official documentation required by law to be filed with the Attorney General’s
Kirk.
Office, Jenna Kirk is identified as serving on the board of directors of Summer Rays beginning in 2016. 34.
Jenna Kirk has personally participated in the violations of law described in this
Complaint, or, through her actions or inaction, authorized, directed, adopted, ratified, allowed, or otherwise caused or permitted such violations to occur. This action is being initiated against Jenna Kirk both individually and in her capacity as a director, trustee, officer and/or agent of Summer Rays and RRC. G.
Juliette Kirk
35.
Defendant Juliette Kirk (“Juliette Kirk”) is the minor daughter of Chuck Kirk and
Marsha Kirk. 36.
Juliette Kirk resides at 6790 Tanya Terrace, Reynoldsburg, Ohio 43068.
Columbus, Ohio 43209.
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37.
Juliette Kirk has been named as a Defendant in this Complaint solely because she
is listed as an owner of record of 6790 Tanya Terrace, and her involvement in necessary to afford complete relief in this case. H.
Tammy J. Gollihue
38.
Defendant Tammy J. Gollihue (“Tammy Gollihue”) is the sister of Chuck Kirk.
39.
Tammy Gollihue currently resides at 6338 Beaver Lake Dr., Grove City, Ohio
40.
In official documentation required by law to be filed with the Attorney General’s
43123.
Office, Tammy Gollihue is identified as serving on the board of directors of Summer Rays beginning in 2016. 41.
Tammy Gollihue has personally participated in the violations of law described in
this complaint, or, through her actions or inaction, authorized, directed, adopted, ratified, allowed, or otherwise caused or permitted such violations to occur. This action is being initiated against Tammy Gollihue both individually and in her capacity as a director, trustee, officer and/or agent of Summer Rays. I.
Teresa Perry
42.
Defendant Teresa Perry (“Teresa Perry”) is the cousin of Chuck Kirk.
43.
Teresa Perry currently resides at 1698 Cedar Creek Court, Grove City, Ohio
44.
In official documents required by law to be filed with both the Attorney General’s
43123.
Office and the IRS, Teresa Perry is identified as serving on the board of directors of Summer Rays, as secretary, since at least 2010.
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45.
Teresa Perry has personally participated in the violations of law described in this
Complaint, or, through her actions or inaction, authorized, directed, adopted, ratified, allowed, or otherwise caused or permitted such violations to occur. This action is being initiated against Teresa Perry both individually and in her capacity as a director, trustee, officer and/or agent of Summer Rays. J.
Deborah L. Garrison
46.
Defendant Deborah L. Garrison (“Deborah Garrison”) is the aunt of Chuck Kirk.
47.
In official documents required by law to be filed with both the Attorney General’s
Office and the IRS, Deborah Garrison is identified as serving on the board of directors of Summer Rays, as treasurer, since at least 2010 48.
Deborah Garrison is the sole, authorized user and/or signatory for numerous bank
accounts that have been opened by Summer Rays. 49.
Deborah Garrison has personally participated in the violations of law described in
this complaint, or, through her actions or inaction, authorized, directed, adopted, ratified, allowed, or otherwise caused or permitted such violations to occur. This action is being initiated against Deborah Garrison both individually and in her capacity as a director, trustee, officer and/or agent of Summer Rays. K.
Heartland Bank
50.
Defendant Heartland Bank is an Ohio for-profit corporation with its principal
place of business in Franklin County, Ohio. 51.
Heartland Bank has been named a defendant because it has, or may claim, a
security interest in several of the real properties identified below and owned by either Summer Rays or RRC. 8
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K.
Jurisdiction and Venue
52.
This Court has subject matter jurisdiction in this case pursuant to R.C. 2305.01.
53.
This Court may exercise personal jurisdiction over the Defendants in this case
pursuant to R.C. 2307.382 because the acts and omissions alleged in this Complaint occurred in Ohio and/or because they involve or relate to the activities of an Ohio nonprofit corporation. 54.
Venue is also proper in Franklin County because the majority of the acts and
omissions alleged in this Complaint occurred in Franklin County 55.
Venue is also proper in Franklin County pursuant to R.C. 109.16 as the amount in
controversy exceeds $500.00. Through the undersigned, the State certifies that the amount in controversy exceeds $500.00. III.
DEFENDANTS’ ACTIVITIES GIVING RISE TO THIS COMPLAINT A.
Overview of Summer Rays and RRC
56.
Defendants characterize Summer Rays as a sober living “program.”
57.
Summer Rays currently owns approximately twenty-five properties in Ohio, most
in Franklin County. 58.
Many of these properties are, or have been, used as program houses.
59.
For the last several years, there are typically around 100 individuals living, at any
point in time, in the various Summer Rays program houses. 60.
Residents of Summer Rays typically are required to pay a weekly “program fee”
ranging from $100 to $150, depending upon the type of bed and number of people sharing a bedroom.
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61.
Payment of the so-called program fee entitles Summer Rays residents to the
following: a bed at one of the Summer Rays program houses, no obligation to pay basic utilities, and, if requested, a gym membership. 62.
Residents at Summer Rays typically are instructed that they are required to
comply with the following requirements: (a) abstain from using any type of illegal drugs or alcohol; (b) attend a weekly meeting on Tuesday evenings, known as the “Get Mad” meetings; and (c) attend a one-hour church service each week. 63.
There is no requirement that residents of Summer Rays attend any formalized
training or counseling, be employed or seek employment, or develop any type of individualized plan or program for leaving Summer Rays. 64.
RRC owns the real property located at 7679 E. Main St., Reynoldsburg, Ohio
43068. The business known as “Rev Café” operates out of 7679 E. Main St. Rev Café is a restaurant open to the public. 65.
Since the summer of 2014, Summer Rays’ weekly Get Mad meetings have been
held in the event space in the basement of Rev Café. Since the summer of 2014, RRC’s weekly church services have been held in the event space in the basement of Rev Café. B.
Activity by Chuck Kirk
66.
Most of the residents of Summer Rays are in an extremely vulnerable position
when they arrive at Summer Rays. They are getting out of prison or jail, have just completed a drug or alcohol rehabilitation program, were staying at a homeless shelter, do not have the financial ability to afford a deposit on an apartment, have burned bridges with friends and family members, and/or are in tremendous need of a more structured and supporting living environment.
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67.
As a 501(c)(3) nonprofit charity seeking to provide services to these types of
individuals, Summer Rays at all times should have been operated in the best interests of the residents, keeping in mind their precarious emotional, psychological, and (sometimes) economical situations. 68.
At all relevant times, Chuck Kirk has had absolute discretion and control over
virtually every aspect of the day-to-day operations of Summer Rays and RRC, including but not limited to whether residents may remain in the Summer Rays program, or whether they will be “kicked-out� of their home. 69.
Chuck Kirk has taken advantage of the power disparity between himself and the
residents of Summer Rays in various ways that were detrimental to the best interests of Summer Rays residents. 70.
Chuck Kirk has engaged in a consistent pattern and practice of socializing with
the residents of Summer Rays, and inserting himself into the personal, professional, and romantic lives of the residents of Summer Rays, in ways that are inappropriate for the executive director of a sober living facility. 71.
Chuck Kirk has engaged in a consistent pattern and practice of activities towards
Summer Rays residents that could be characterized as harassing or abusive and was detrimental to the best interests of Summer Rays residents. 72.
Chuck Kirk actively facilitated and/or knowingly allowed conditions and
activities, both at the Summer Rays program houses and at outside events, that would not be considered appropriate for a sober living facility or most sober living residents. 73.
Under Chuck Kirk’s direction and control, Summer Rays residents have at times
lived in conditions that could be described as unsanitary and/or inhospitable. 11
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74.
Chuck Kirk has engaged in a consistent pattern and practice of acting as a
financial intermediary for Summer Rays residents. In carrying out these transactions, Chuck Kirk has engaged in activities which were detrimental to the best interests of Summer Rays residents. 75.
The other board members and officers of Summer Rays and RRC have failed to
exercise any type of oversight or check on the authority and actions of Chuck Kirk as it relates to the treatment of the Summer Rays residents. C.
Defendants’ Side Businesses
76.
Defendants have operated a number of dba’s and side-businesses over the years.
77.
RRC has opened a separate bank account under the dba, Rev Café. In addition to
being to being a restaurant open to the public, Rev Café offers catering services. The Rev Café staff consist primarily of Summer Rays residents. 78.
Summer Rays has opened bank accounts and operated side businesses under a
number of dba’s, including but not limited to the following: (a) Zoom Direct; (b) Zoom Tax Advisers; (c) ReVolve Studio; (d) Zoom Property Advisers; (e) Zoom Racing Team; (f) Zoom Staffing Agency; and (g) Revolve Personal Organizers. These dba’s and side-businesses have relied extensively upon the residents of Summer Rays as either a source of labor or a customer base. 79.
For many years, Marsha Kirk operated a cleaning business that utilized the
residents of Summer Rays to perform the cleaning services. 80.
Most, if not all, of these Summer Rays residents who worked for one of the side
businesses should have been treated as W-2 employees.
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81.
Summer Rays and/or RRC have failed to track or document in any way the
number of hours residents spent working on behalf of the various dba’s or side-businesses. 82.
Summer Rays and/or RRC have failed to issue paychecks to these individuals.
Rather, Summer Rays and/or RRC paid these individuals primarily in cash and/or by discounting their weekly “program fees” for Summer Rays. 83.
Summer Rays and/or RRC have failed to issue W-2 or 1099 forms to the vast
majority of individuals who worked and/or provided services on behalf of Summer Rays or RRC. 84.
Summer Rays and/or RRC have failed to fairly and/or lawfully compensate
certain individuals for the work they have performed for Summer Rays and/or RRC. D.
Reported Compensation, Common Scheme, and the Intermingling and Misappropriation of Charitable Assets
85.
Beginning no later than January 1, 2012, Chuck Kirk and Marsha Kirk have not
been employed by any other entity and have received no compensation of any type from a source other than from Summer Rays. 86.
Neither Summer Rays nor RRC has reported paying any compensation to
Jacquelyn Kirk, Jenna Kirk, Deborah Garrison, or Tammy Gallihue. 87.
Summer Rays and RRC have been operated as a single entity and as part of a
common scheme. This common scheme extends to all of the bank accounts and dba’s opened under the name and federal EINs of Summer Rays and RRC. This common scheme also extends to the personal bank accounts of Chuck Kirk, Marsha Kirk, Jacquelyn Kirk (multiple accounts), Jenna Kirk (multiple accounts), Deborah Garrison (multiple accounts), and Tammy Gollihue. 88.
Upon information and belief, the primary purpose of this common scheme has
been to conceal and disguise from tax authorities and/or creditors both the true nature of 13
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Defendants’ finances and the fact that the net proceeds from the operation of Summer Rays and RRC have been used to personally benefit the individual Defendants in various ways. 89.
The charitable funds and resources of Summer Rays and RRC also have been
improperly used for the direct, personal benefit of Chuck Kirk, Marsha Kirk, Jenna Kirk, Jacquelyn Kirk, Jenna Kirk, Juliette Kirk, Tammy Gollihue, Teresa Perry, non-defendant Jared Kirk, and non-defendant Jeremy Kirk in a variety of ways. Examples of includes, but are not limited to: a) The real property located at 6790 Tanya Terrace, Reynoldsburg, Ohio 43068 has been the primary residence for Marsha Kirk, Juliette Kirk, non-defendant Jared Kirk, non-defendant Jeremy Kirk, and both Jacquelyn and Jenna Kirk prior to their graduating from high school. Summer Rays was the previous owner of, and has made mortgage payments on, 6790 Tanya Terrace. On or about July 1, 2014, Summer Rays sold 6790 Tanya Terrace to Jacquelyn Kirk, Jenna Kirk, and Juliette Kirk for $15,081, which is well less than market value. b) Summer Rays is the current owner of the real property located at, and has made installment payments on, 408 Park Ave., Kent, Ohio 44240. Jacquelyn Kirk resided rent-free at 408 Park Ave from 2014 through 2017 while she attended Kent State University. 408 Park Ave. was not a sober living house and did not further Summer Rays’ charitable programming in any way. Rather, Defendants treated 408 Park Ave. like Jacquelyn Kirk’s personal residence. c) Summer Rays is the current owner of the real property located at 2782 E. Livingston Ave., Columbus, Ohio 43209. Since August 2016, Jenna Kirk has resided rent-free at 2782 E. Livingston Ave. while she attends Capital University. 14
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2782 E. Livingston Ave. is not a sober living house and does not further Summer Rays’ charitable programming in any way. Rather, Defendants have treated 2782 E. Livingston Ave. like Jenna Kirk’s personal residence. d) Summer Rays was the previous owner of the real property located at 5649 Boyd Road, Grove City, Ohio 43123. In 2015 and 2016, multiple payments by a Summer Rays program participant were deposited into the personal bank account of Tammy Gollihue. When 5649 Boyd Road was sold, at least a portion of those net proceeds also were deposited into Tammy Gollihue’s personal bank account. IV.
ATTORNEY GENERAL’S CLAIMS COUNT ONE: BREACH OF FIDUCIARY DUTIES 90.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 91.
Summer Rays and RRC are organized exclusively for charitable purposes. They
are charitable trusts as defined in R.C. 109.23 and the common law. 92.
Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue,
Deborah Garrison, and Teresa Perry, owed fiduciary duties to the charitable beneficiaries of Summer Rays and RRC, including the duty of care, the duty of loyalty, the duty to properly manage accounts, and the duty to comply with the law, as well as other duties, including, but not limited to, the duty not to waste charitable trust assets and to act in the best interest of the charity. 93.
Chuck Kirk breached his fiduciary duties by failing to look out for the best
interests of the residents of Summer Rays and by engaging in the abusive, unlawful, fraudulent, and inappropriate activity identified above. 15
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94.
Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue, Deborah Garrison,
and Teresa Perry breached their fiduciary duties by failing to look out for the best interests of the residents of Summer Rays and, through their inaction and failure to exercise proper oversight, implicitly approving and ratifying the abusive, unlawful, fraudulent, and inappropriate activity of Chuck Kirk identified above. 95.
Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue,
Deborah Garrison, and Teresa Perry violated their fiduciary duties by diverting charitable assets for their own personal use and placing their personal interests above the interests of Summer Rays, RRC, and their charitable beneficiaries, and/or by failing to ensure that charitable assets were protected from diversion for unlawful personal use. 96.
Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue,
Deborah Garrison, and Teresa Perry violated their fiduciary duties to preserve the charitable trust property of Summer Rays and RRC for intended charitable trust purposes and to properly manage and maintain the charitable trust property for the benefit of the charitable beneficiaries. 97.
Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue,
Deborah Garrison, and Teresa Perry violated their fiduciary duties to account for all assets of Summer Rays and RRC collected and expended for charitable purposes and/or they failed to keep adequate records of Summer Rays’ and RRC’s charitable programming. 98.
Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue,
Deborah Garrison, and Teresa Perry violated their fiduciary duties to use all the money or assets collected or earned by Summer Rays and RRC for charitable purposes and/or they failed to ensure that all the money or assets of Summer Rays and RRC were used for the organization’s charitable purpose. 16
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99.
As a direct and proximate cause of the breaches of fiduciary duty as alleged in
this Complaint, there was a waste of charitable assets to the detriment of the charitable beneficiaries in an amount not yet known, but more than $25,000.00. 100.
Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue,
Deborah Garrison, and Teresa Perry are jointly and severally liable for charitable funds that have been wrongfully diverted from their intended charitable purposes. 101.
Chuck Kirk’s, Marsha Kirk’s, and Deborah Garrison’s actions were willful,
wanton, and in reckless disregard of the legal rights of the charitable beneficiaries of Summer Rays and RRC, and are of the nature for which the recovery of punitive damages is appropriate. 102.
Because Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Tammy Gollihue,
Deborah Garrison, and Teresa Perry have continuously breached their fiduciary responsibilities in the administration of Summer Rays and RRC, they should be removed as officers and directors of these organizations. 103.
The Attorney General, in his role as parens patriae, protects charitable trusts and
the beneficiaries who should have benefitted from the operation of charitable trusts. 104.
Because Defendants have proven incapable of appropriately managing and
distributing the charitable trust assets of Summer Rays and RRC, the Attorney General is entitled to an order imposing a constructive over all assets of Summer Rays and RRC, along with all assets acquired or being paid for with the charitable trust assets of Summer Rays and RRC, and an order enforcing such constructive trust. Moreover, the Attorney General requests an order appointing a receiver over the assets and funds impressed with the constructive trust, for the purpose of redistributing those assets and funds to the appropriate charitable beneficiaries or charitable purposes. 17
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COUNT TWO: CONVERSION 105.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 106.
Chuck Kirk, Marsha Kirk, and Deborah Garrison converted the value of funds and
property owned by Summer Rays and RRC and expended it for their personal benefit. 107.
Chuck Kirk’s, Marsha Kirk’s, and Deborah Garrison’s conversion of the funds
and property of Summer Rays and RRC was intentional, and was contrary to the rights and interests of Summer Rays and RRC. 108.
Separately, Chuck Kirk converted the property of Summer Rays residents when
he assumed control of automobiles that were titled in the name of residents personally and then “resold” these vehicles. Chuck Kirk’s actions were intentional and contrary to the rights of these individuals COUNT THREE: CIVIL CONSPIRACY 109.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 110.
Chuck Kirk, Marsha Kirk, Deborah Garrison, and Tammy Gollihue conspired to
misappropriate the charitable assets of Summer Rays and RRC and use those assets for their own personal benefit. 111.
Chuck Kirk, Marsha Kirk, Deborah Garrison, and Tammy Gollihue have
conspired to use their personal bank accounts, the bank accounts of other family members, and the various bank accounts of Summer Rays and RRC to disguise and conceal the nature and extent of their unlawful activity.
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112.
The actions of Chuck Kirk, Marsha Kirk, Deborah Garrison, and Tammy Gollihue
were undertaken purposefully and with malice. 113.
As a result of the actions of Chuck Kirk, Marsha Kirk, Deborah Garrison, and
Tammy Gollihue, damages were suffered by Summer Rays, RRC, and the charitable beneficiaries of Summer Rays and RRC. COUNT FOUR: UNJUST ENRICHMENT 114.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 115.
As alleged in this Complaint, Summer Rays, RRC, and/or the residents of
Summer Rays have conferred a variety of benefits on Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Juliette Kirk, Deborah Garrison, and Tammy Gollihue. 116.
These Defendants had knowledge of the benefits conferred and/or have received
these benefits under circumstances that have resulted in them being unjustly enriched at the expense of Summer Rays, RRC, and their intended charitable beneficiaries. 117.
The Attorney General, in his role as parens patriae, protects charitable trusts and
the beneficiaries who should have benefitted from the operation of charitable trusts. 118.
The Attorney General is entitled to an order from this Court imposing a
constructive trust on all property or assets unjustly retained by the individual Defendants. 119.
The Attorney General is entitled to an order from this Court disgorging all funds
unjustly received by the individual Defendants. 120.
The Attorney General is entitled to an order from this Court requiring the
individual Defendants to pay the fair market value for the goods and/or services they have received from or through Summer Rays and RRC. 19
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COUNT FIVE: COMMON LAW FRAUD 121.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 122.
Both individually and through Summer Rays and RRC, Chuck Kirk made false
and misleading statements and representations to the public with regard to the charitable programming and activities of Summer Rays and RRC. 123.
These representations were purposeful, willful, wanton, and/or reckless and
intended to mislead the prospective and current residents of Summer Rays and/or the prospective and current clients of Summer Rays and RRC’s various side businesses and dba’s. 124.
Upon
information
and
belief,
individuals
relied
on
the
fraudulent
misrepresentations of Chuck Kirk when deciding whether to enter into various transactions with Chuck Kirk, Summer Rays, or RRC. 125.
Both the individuals deceived and the intended beneficiaries of Summer Rays and
RRC have been damaged by these fraudulent misrepresentations. COUNT SIX: REFORMATION OF CHARITABLE TRUST 126.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 127.
Ohio courts recognize the equitable doctrine of cy pres, and courts will apply the
doctrine when: (A) there is a viable charitable trust; (B) the donor evidenced a general charitable intent on promoting the trust; and (C) it has become impossible or impractical to carry out the specific purposes or terms of the trust. 128.
Ohio case law recognizes the equitable doctrine of deviation. Courts may apply
the doctrine when it deems necessary or highly desirable in order to enable the trustee to perform 20
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the purposes of the trust. Courts may deviate from the terms of the trust if the provisions have become so restrictive as to impair accomplishment of the trust purposes. 129.
Summer Rays and RRC were formed as charitable trusts and were required to
operate for the benefit of their charitable beneficiaries. As such, the funds of Summer Rays and RRC may be used only for the charitable purposes set forth in the terms of the trust. Additionally, all charitable proceeds unjustly or illegally retained by the individual Defendants are subject to the same charitable trust. 130.
The specific purposes and/or specific terms of the charitable trust have become
impossible or impractical to perform due to the actions or inactions of Defendants. 131.
As an example of the frustration of purpose, Chuck Kirk, Marsha Kirk, and
Deborah Garrison have taken assets and proceeds under trust, or held such assets, and have used them for their personal or other unlawful purposes. 132.
The Ohio Attorney General is entitled to an order reforming the terms of the
charitable trust, in order to most nearly fulfill the purposes of the charitable trust in accordance with the doctrine of cy pres or deviation. 133.
Because Defendants have proven incapable of appropriately managing and
distributing the charitable trust assets of Summer Rays and RRC, the Ohio Attorney General requests an order reforming the charitable trusts, dissolving Summer Rays and RRC, and distributing all assets and proceeds to the Ohio Attorney General to be distributed to an organization with a similar charitable purpose. COUNT SEVEN: FALSE AND MISLEADING INFORMATION IN FILINGS 134.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 21
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135.
R.C. 1716.14(A)(9) makes it unlawful to file “false or misleading information in
any document required to be filed with the attorney general under this chapter.” 136.
On behalf of Summer Rays, Chuck Kirk filed annual reports for 2012, 2013,
2014, 2015, 2016, and 2017. 137.
Each of the filings referenced above were required by R.C. Chapter 1716 and
each contain false or misleading information. 138.
Each of the filings referenced above constitute separate violations of
R.C. 1716.14(A)(1), for which the Attorney General is entitled to an injunction and for which Chuck Kirk is liable to pay a civil penalty of up to $10,000 per violation pursuant to R.C. 1716.16(B). COUNT EIGHT: FALSE AND MISLEADING INFORMATION IN RESPONSE TO INVESTIGATION 139.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 140.
R.C. 1716.14(A)(10) makes it unlawful for a person to provide “false or
misleading information in response to a request from the attorney general under section 1716.15 of the Revised Code.” 141.
On August 15, 2017, the Attorney General’s Office conducted an examination
under oath of Marsha Kirk pursuant, in part, to the authority in R.C. 1716.15. In response to questioning from the assistant attorney general, Marsha Kirk provided false and misleading information. 142.
On August 31, 2017, the Attorney General’s Office conducted an examination
under oath of Jacquelyn Kirk pursuant, in part, to the authority in R.C. 1716.15. In response to 22
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questioning from the assistant attorney general, Jacquelyn Kirk provided false and misleading information. 143.
Pursuant to R.C. 1716.16(B), Marsha Kirk and Jacquelyn Kirk are liable to pay a
civil penalty of up to $10,000 for this violation. COUNT NINE: ABUSE OF A CHARITABLE TRUST, R.C. 109.24 144.
Plaintiff Attorney General incorporates the preceding paragraphs of this
Complaint as if fully rewritten herein. 145.
R.C. 109.24 provides that the Attorney General “shall institute and prosecute a
proper action to enforce the performance of any charitable trust, and to restrain the abuse of it whenever he considers such action advisable.� 146.
The acts and omissions of Defendants identified constitute an abuse of a
charitable trust, in violation of R.C. 109.24. PRAYER FOR RELIEF WHEREFORE, pursuant to his statutory and common law authority, Plaintiff Ohio Attorney General respectfully requests this Court grant the following relief: A. Grant a permanent injunction and perpetually enjoin Chuck Kirk, Marsha Kirk, and Deborah Garrison from holding any position as a volunteer, officer, trustee, employee, representative, independent contractor, or agent of any charitable organization in Ohio; B. Grant a permanent injunction and perpetually enjoin Chuck Kirk, Marsha Kirk, and Deborah Garrison from soliciting in Ohio for charitable purposes or on behalf of any charitable organization, including, but not limited to, solicitations conducted as a volunteer, officer, trustee, employee, representative, independent 23
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contractor, or agent of an organization; or solicitations conducted as a professional solicitor, fundraising counsel, or commercial co-venturer, as those terms are defined in Revised Code Chapter 1716; C. Grant a permanent injunction and perpetually enjoin Jenna Kirk, Jacquelyn Kirk, Tammy Gollihue, and Teresa Perry from holding any position as an officer or trustee, of any charitable organization in the State of Ohio or having any involvement with or responsibility concerning any charitable trust money in the future; D. Grant equitable and statutory relief freezing the accounts of Summer Rays, RRC, Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, and Deborah Garrison, and any other accounts used to perpetuate illegal activities, and attach all assets commingled or otherwise accumulated or acquired with charitable proceeds; E. Impose a constructive trust over all assets or funds unjustly or illegally received or retained by Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Juliet Kirk, Deborah Garrison, Tammy Gollilue, Summer Rays, and RRC and order them to disgorge all assets held under that constructive trust to the Ohio Attorney General; F. Order Chuck Kirk, Marsha Kirk, Jacquelyn Kirk, Jenna Kirk, Juliet Kirk, Deborah Garrison, Tammy Gollilue, Summer Rays, and RRC, jointly and severally, to pay restitution and compensatory damages, including interest for all amounts unjustly or illegally retained by Defendants, to the Ohio Attorney General; G. Declare the terms of the charitable trust, and enter an order enforcing those terms in a manner consistent with this Complaint including dissolving Summer Rays and RRC and distributing all assets and proceeds to the Ohio Attorney General; 24
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H. Reform the charitable trust in accordance with the doctrine of cy pres or deviation, including dissolving Summer Rays and RRC and distributing all assets and proceeds to the Ohio Attorney General; I. Order Chuck Kirk, Marsha Kirk, and Jacquelyn Kirk to pay Plaintiff Attorney General a civil penalty of up to $10,000 for each violation as alleged in this Complaint, including any violations occurring after the filing of the Complaint; J. Award Plaintiff Attorney General his reasonable attorney’s fees and costs of investigation and litigation, as permitted by R.C. 1716.16(B); and K. Grant Plaintiff Attorney General other relief as the Court deems proper and necessary. Respectfully submitted, MIKE DEWINE ATTORNEY GENERAL OF OHIO /s/ Matthew T. Green Matthew T. Green (0075408) Tammy V. Chavez (0096714) Assistant Attorneys General Ohio Attorney General’s Office Charitable Law Section 150 E. Gay St., 23rd Floor Columbus, Ohio 43215-3130 Voice: 614-466-3181 Fax: 877-647-2556 Matthew.Green@OhioAttorneyGeneral.gov Tammy.Chavez@OhioAttorneyGeneral.gov Counsel for Plaintiff Ohio Attorney General
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