Case Title: Ferrill v. North American Hunting Retriever Assn., Inc.

Citation: 173 Vt. 587, 795 A.2d 1208

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2002-02-25T00:00:00Z

Document:
Ferrill v. North American Hunting Retriever Assn., Inc.  (2001-047); 
173 Vt. 587; 795 A.2d 1208

[25-Feb-2002]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2001-047

                            SEPTEMBER TERM, 2001

  Donald A. Ferrill    	           }	APPEALED FROM:
                                   }
       v.	                   }
                                   }	Franklin Superior Court
  North American Hunting Retriever }
  Association, Inc.	           }	DOCKET NO. S 58-00 Fc

                                        Trial Judge: Edward J. Cashman

       In the above-entitled cause, the Clerk will enter:

       The North American Hunting Retriever Association, Inc. ("NAHRA"), a
  Vermont nonprofit corporation, appeals a summary judgment ruling granting
  plaintiff Donald A. Ferrill access to certain corporate documents as a
  corporate member of NAHRA.  NAHRA contends that summary judgment for
  plaintiff was error because NAHRA has not conferred corporate membership
  rights as provided under Vermont law to members of the NAHRA association. 
  We conclude that the court erred, and accordingly we reverse and remand for
  further proceedings.

       The essential facts are undisputed.  NAHRA is a Vermont nonprofit
  corporation whose purpose is to, among things, promote the use and training
  of hunting retrievers as a conservation and management tool for wildlife
  resources, educate hunting retriever owners, handlers and the public on the
  use and training of hunting retrievers, and encourage quality breeding and
  field testing of purebred hunting retrievers.  When NARHA was incorporated
  in 1984, Vermont statutes defined a nonprofit corporate "member" as a
  person with membership rights in the corporation as provided in the
  corporate articles of incorporation or bylaws.  11 V.S.A. § 2302(6) (1984)
  (repealed 1997).  A nonprofit corporation was not required to have members,
  but if it chose not to have members, the law required the corporation to
  state that fact in its articles of incorporation.  Id. § 2358(a).  The law
  further required that any limitation on a member's voting rights be set
  forth in either the articles of incorporation or the corporate bylaws.  Id.
  § 2362(a).  Absent such an explicit limitation, all members were entitled
  by law to one vote on each matter that the corporation submitted to a vote
  of its members.  Id. 
   
       NAHRA's 1984 articles of incorporation, which NAHRA has never amended,
  do not contain any specific provision for membership voting and do not
  state that the organization will not have members.  The articles mention
  membership only in the context of how NAHRA will dispose of corporate
  assets, if any, upon dissolution.  Specifically, the articles state, "No
  part of the net assets or net earnings of the North American Hunting
  Retriever Association shall inure to the benefit of or be paid or
  distributed to any officer, director, member, employee, or donor of the
  North American Hunting Retriever Association."  (Emphasis added.)  NAHRA
  has never adopted bylaws since its 1984 incorporation.

  
   
       In 1998, Ferrill applied for and received an affiliation with NAHRA
  which the organization termed a "membership."  For an annual payment of
  thirty-seven dollars, Ferrill was entitled to a wallet membership card, a
  one-year subscription to the corporation's newsletter, a NAHRA decal, a
  NAHRA rule book, and eligibility for discounts at NAHRA-sponsored events. 
  NAHRA also offered an affiliation it called "Sponsor" for an annual fee of
  $200, which included the "membership" benefits as well as a jacket with an
  embroidered NAHRA patch. 

       In April 1999, Ferrill wrote to NAHRA asking for copies of certain
  corporate records, including the corporation's bylaws, articles of
  incorporation, minutes of the meetings of the board of directors,
  accounting records, financial statements, names and addresses of all NAHRA
  members, and other documents.  Ferrill informed NAHRA that he wanted the
  documents to investigate the activities of NAHRA's officers and directors
  to determine whether they had engaged in any wrongdoing.  NAHRA responded
  to Ferrill's request the next month, but did not provide copies of the
  documents he sought.  NAHRA's president instead told Ferrill that the NAHRA
  board of directors would further consider his request if Ferrill specified
  in detail the wrongful conduct he suspected.  

       In February 2000, Ferrill commenced the present action against NAHRA
  in Franklin Superior Court.  In his complaint, Ferrill asserted that he is
  a corporate member of NAHRA and is therefore entitled to inspect certain
  corporate records in accordance with § 16.02 of Vermont's Nonprofit
  Corporation Act.  See 11B V.S.A. § 16.02.  He asked the court to compel
  NAHRA to provide him with copies of the documents he previously requested
  and to order a meeting of NAHRA's corporate members in accordance with 11B
  V.S.A. § 7.03(a)(1).  NAHRA promptly moved for summary judgment arguing
  that it has never had corporate members and therefore NAHRA was entitled to
  judgment as a matter of law on Ferrill's claims because only members are
  entitled to the relief offered by §§ 7.03(a)(1) and 16.02.  Ferrill
  cross-moved for summary judgment, which the trial court granted.  The court
  directed NAHRA to allow Ferrill to inspect and copy NAHRA's records, but
  did not set a date or time for a NAHRA membership meeting, stating that it
  would do so in the future should Ferrill still seek that remedy.  NAHRA
  appealed the judgment to this Court.

       NAHRA argues that Ferrill does not fit the statutory definition of
  "member" because its articles of incorporation do not create members, and
  therefore Ferrill is not entitled to inspect and copy documents nor seek a
  judicially ordered membership meeting.  Ferrill counters that he was
  entitled to summary judgment because NAHRA did not limit his membership
  rights in the NAHRA articles of incorporation or adopt bylaws setting forth
  membership limitations, both requirements under the Vermont Nonprofit
  Corporation Act.  Ferrill argues alternatively that NAHRA must be estopped
  from denying him the benefits of corporate membership (i.e., voting and
  document inspection rights) by virtue of his affiliation with NAHRA which
  he believed conferred such rights.  On appeal, we use the same standard to
  review summary judgment orders as the trial court.  Wentworth v. Fletcher
  Allen Health Care, 171 Vt. 614, 616,