Arizona Laws 20-867. Exemption from liability
A. The officers and members of the supreme governing body or a subordinate body of a society are not personally liable for any benefits that are provided by the society.
Terms Used In Arizona Laws 20-867
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
- Quorum: The number of legislators that must be present to do business.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Society: means a fraternal benefit society. See Arizona Laws 20-861
B. A society may indemnify and reimburse any person who is or was a director, officer, employee or agent of a society or who is or was serving at the request of the society as a director, officer, employee or agent of any other firm, corporation or organization for expenses reasonably incurred by and liabilities imposed on the person in connection with or arising out of any action, suit or proceeding or the threat of an action, suit or proceeding in which the person may be involved. In a civil action a person shall not be indemnified or reimbursed if a court of competent jurisdiction finds that the person breached a duty owed as a director, officer, employee or agent of the society or the matter is the subject of a settlement, unless the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society. In a criminal action a person shall not be indemnified or reimbursed if the person negotiates a plea bargain or is found guilty in a court of competent jurisdiction of an offense relating to his position of director, officer, employee or agent of the society unless the person had no reasonable cause to believe that his conduct was unlawful. The supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, suit or proceeding or a court of competent jurisdiction shall determine if the person acted in good faith. The termination of an action, suit or proceeding or a plea of no contest does not create a conclusive presumption that the person failed to act in good faith. The right of indemnification and reimbursement does not abrogate any other right to which the person is entitled as a matter of law and inures to the benefit of the heirs, executors and administrators of the person.
C. A society may purchase and maintain insurance on behalf of a person who is or was a director, officer, employee or agent of the society or who is or was serving at the request of the society as a director, officer, employee or agent of any other firm, corporation or organization against any liability that is asserted against the person and that the person incurred in his capacity as a director, officer, employee or agent. A society may purchase and maintain insurance pursuant to this subsection regardless of the society’s ability to indemnify the person.
D. A director, officer, employee, member or volunteer of a society who serves without compensation is not personally liable and no action may be maintained against him in his individual capacity for damages resulting from an act or omission within the scope of his duties and responsibilities unless the act or omission was caused by wanton or wilful misconduct.