Case Title: Clement J. Cartron III v. Board of Governors of Valley Hill Country Club, Inc., et al. (Appeal from Madison Circuit Court: CV-20-900007.80).

Citation: 

Docket Number: SC-2023-0015

State: alabama

Court: Alabama Supreme Court

Date: 2023-11-03T00:00:00Z

Document:
Rel: November 3, 2023 
 
 
 
 
 
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern 
Reporter.  Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 
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SUPREME COURT OF ALABAMA 
 
OCTOBER TERM, 2023-2024 
 
_________________________ 
 
SC-2023-0015 
_________________________ 
 
Clement J. Cartron III  
 
v.  
 
Board of Governors of Valley Hill Country Club, Inc., et al.  
 
 
Appeal from Madison Circuit Court 
(CV-20-900007.80) 
 
STEWART, Justice. 
 
 
AFFIRMED. NO OPINION. 
 
 
Parker, C.J., and Shaw, Wise, Bryan, Sellers, Mendheim, and 
Mitchell, JJ., concur.  
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2 
 
Cook, J., concurs specially, with opinion. 
 
 
 
SC-2023-0015 
3 
 
COOK, Justice (concurring specially). 
 
Clement J. Cartron III is a former member of Valley Hill Country 
Club, Inc. ("Valley Hill"), a nonprofit private-membership corporation 
that operates a country club in Huntsville.  While he was a member of 
Valley Hill, Cartron asked to inspect and copy several of Valley Hill's 
records pursuant to § 10A-3-2.32, Ala. Code 1975, a provision of the 
Alabama Nonprofit Corporation Law, § 10A-3-1.01 et seq., Ala. Code 
1975.  After Valley Hill denied Cartron's request, Cartron commenced the 
present action against Valley Hill and several other defendants, seeking 
to enforce his purported statutory right to inspect and copy the records 
at issue pursuant to § 10A-3-2.32. 
 
Following Cartron's initiation of this action, Valley Hill terminated 
his membership. Cartron then amended his complaint to assert 
additional claims arising from the termination of his membership in 
Valley Hill, including claims of breach of fiduciary duty, breach of 
contract, wantonness, and abuse of process. 
  
Following additional filings and proceedings, both Cartron and the 
SC-2023-0015 
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defendants, including Valley Hill, filed summary-judgment motions.1  
After a hearing, the Madison Circuit Court entered a summary judgment 
in favor of Valley Hill and the other defendants on all claims.  
 
On appeal, Cartron argues (1) that termination of his membership 
in Valley Hill was improper and (2) that, even if his membership was 
properly terminated, § 10A-3-2.32 nevertheless grants him a statutory 
right to inspect the records at issue.  
 
I concur with affirming the trial court's summary judgment insofar 
as it determined that Cartron's membership in Valley Hill was properly 
terminated. I am unaware of, and Cartron did not identify, any statutory 
basis under Title 10A of the Alabama Code for his claims arising out of 
the termination of his membership in Valley Hill.  Moreover, to hold 
otherwise would invite a host of "freedom-of-association" issues under the 
First Amendment to the United States Constitution. 
 
However, I write specially to note my concerns with Valley Hill's 
ability to avoid disclosing the requested records and my concerns with 
the current statutory law and caselaw in this area.  Section 10A-3-2.32 
 
1The defendants moved for a full summary judgment, and Cartron 
moved for a partial summary judgment.  
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provides, in relevant part, that the "books and records of a nonprofit 
corporation may be inspected by any member … for any proper purpose."  
 
 This Court has held that inspection statutes such as § 10A-3-2.32 
were intended to codify the broad common-law right to inspection.  Bank 
of Heflin v. Miles, 294 Ala. 462, 467, 318 So. 2d 697, 701 (1975).  
Generally, "[t]he modern tendency of the courts is to permit shareholders 
[or members] to examine the books and records of the corporation for the 
purpose of ascertaining whether the business of the corporation has been 
properly conducted."  5A William Meade Fletcher et al., Fletcher 
Cyclopedia of the Law of Corporations § 2223 (rev. vol. 2020).   
 
Although § 10A-3-2.32 provides that the "books and records of a 
nonprofit corporation may be inspected by any member … for any proper 
purpose," I believe that "may" should be construed as mandatory in this 
statute because "it is necessary to do so in order to accomplish the 
manifest purpose of the legislature."  82 C.J.S. Statutes § 481 (2022).  
"[W]here it appears from a consideration of the whole statute and its 
nature and object[] that the intent of the legislature has been to impose 
a positive duty …, the word 'may' normally will be held to be mandatory."  
Id.  
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Based on the text of § 10A-3-2.32 as a whole and on this Court's 
previous recognition that this statute was intended to codify a common-
law right of inspection, I believe that § 10A-3-2.32 provides a mandatory 
right.  See 82 C.J.S. Statutes § 481; see also Lott v. Eastern Shore 
Christian Ctr., 908 So. 2d 922, 931 (Ala. 2005) (noting that the 
predecessor to § 10A-3-2.32 "guarantees" a member's inspection rights). 
There are very good public-policy reasons for this statute.  The clear 
purpose of the statute is transparency.  It promotes trust in the nonprofit 
corporation, discourages fraud, and provides for the discovery of 
mismanagement and fraud. As Supreme Court Justice Louis Brandeis 
wrote over 100 years ago: "Sunlight is said to be the best of disinfectants." 
Louis D. Brandeis, What Publicity Can Do, Harper's Weekly, Dec. 20, 
1913, at 10. 
In cases similar to the one now before us, courts in other 
jurisdictions have concluded that a former member is entitled to inspect 
a nonprofit corporation's records if the invocation of this statutory right 
occurred before the former member's expulsion and if the lawsuit seeking 
to inspect the records was commenced before the expulsion.  See, e.g., 
Raffinan v. Philippine Cultural Found., Inc., 821 So. 2d 1272, 1272, 1275 
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(Fla. Dist. Ct. App. 2002) (affirming a nonprofit corporation's right to 
expel members under the corporation's bylaws but concluding that the 
former members were entitled to enforce the statutory record-inspection 
rights acquired and invoked before their expulsion); Leary v. Foley, 884 
So. 2d 655, 658 (La. Ct. App. 2004) (concluding that "the determinative 
date, in regards to [statutory record-inspection] rights, is the date of 
demand, not the date of corporate compliance" (citing Naquin v. Air 
Engineered Sys. & Servs., 423 So. 2d 713, 716 (La. Ct. App. 1983)) 
(emphasis added)).  
 
Moreover, because § 10A-3-2.32 provides a member of a nonprofit 
corporation the right to inspect the corporation's records, the corporation 
cannot avoid this right through its bylaws.  The bylaw provision of the 
Alabama Nonprofit Corporation Law provides: "The bylaws may contain 
any provision for the regulation and management of the affairs of a 
corporation not inconsistent with law or the certificate of formation."  § 
10A-3-2.31, Ala. Code 1975 (emphasis added).  Accordingly, because a 
bylaw limiting a member's inspection rights would be "inconsistent with 
[the] law," I do not believe that Valley Hill and the remaining defendants 
should be able to circumvent the inspection right created by § 10A-3-2.32 
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through other means (such as the termination of membership).  See §§ 
10A-3-2.31 and -2.32.  
 
Although all of this is certainly compelling, there are two problems 
that prevent me from dissenting in the present appeal; therefore, I 
reluctantly concur with affirming the trial court's summary judgment in 
favor of the defendants, including Valley Hill, on Cartron's statutory-
inspection claim under § 10A-3-2.32.   
First, the statute does not expressly indicate whether a request to 
inspect a nonprofit corporation's "books and records" can be invoked by 
either a former member or an individual whose membership is 
terminated after the inspection right in § 10A-3-2.32 has been invoked. 
This Court has previously addressed this issue on at least two occasions 
and has held that, once an individual's membership in a nonprofit 
corporation has been revoked, the right to inspect the records of the 
nonprofit corporation that the individual possessed under the statute 
while he or she was a member is abated.  See Ex parte Board of 
Trustees/Directors and/or Deacons of Old Elam Baptist Church, 983 So. 
2d 1079 (Ala. 2007); Lott, supra. 
 
Cartron has not asked this Court to revisit or overrule our decisions 
SC-2023-0015 
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in those cases in this appeal, and we should not do so in the absence of 
such a request.  See Clay Kilgore Constr., Inc. v. Buchalter/Grant, L.L.C., 
949 So. 2d 893, 898 (Ala. 2006) (recognizing that this Court is generally 
"not inclined to abandon precedent without a specific invitation to do so").  
However, I believe that our decisions in those cases are due to be 
reexamined, and I invite future litigants to address whether this Court 
should consider overruling or sharply limiting those decisions in an 
appropriate case.  
 
Second, I note that there has been a statutory amendment to the 
general provisions in Title 10A -- the Alabama Business and Nonprofit 
Entities Code -- that further complicates the issue in this case.  Section 
10A-1-3.32(b), Ala. Code 1975,2 provides, in relevant part: 
"With respect to a domestic entity covered by this section, the 
books and records maintained under the chapter of this title 
applicable to the entity and any other books and records of the 
 
2Chapter 1 of Title 10A applies to, among others, "all entities 
formed pursuant to or governed by Chapters 2A to 11, inclusive, … except 
as set forth in this chapter .…" unless "a provision of [Chapter 1] conflicts 
with a provision in another chapter in [Title 10A]."  § 10A-1-1.02(a) and 
(c).  Nonprofit corporations are formed pursuant to and governed by the 
Alabama Nonprofit Corporation Law, which is set forth in Chapter 3 of 
Title 10A.  See § 10A-3-1.03, Ala. Code 1975. Thus, nonprofit corporations 
are subject to the statutory provisions in Chapter 1 unless those 
provisions conflict with other statutory provisions. See § 10A-1-1.02(a) 
and (c).   
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entity, wherever situated, are subject to inspection and 
copying at the reasonable request, and at the expense of, any 
owner or member or the owner's or member's agent or 
attorney during regular business hours. The right of access 
extends to the legal representative of a deceased owner or 
member or owner or member under legal disability. The entity 
shall also provide former owners and members with access to 
its books and records pertaining to the period during which 
they were owners or members." 
 
(Emphasis added.)   
Previously, there was a question regarding whether this statute 
(specifically, its express language providing an inspection right to former 
members) applied to nonprofit corporations like Valley Hill.  See § 10A-
1-3.32(a), Ala. Code 1975.  However, the Legislature approved an 
amendment to § 10A-1-3.32(a), which became effective in 2020, to 
expressly exclude nonprofit corporations (along with certain other types 
of business entities previously excluded) from being subject to the 
provisions of § 10A-1-3.32 (including the inspection provision in § 10A-1-
3.32(b)). Now § 10A-1-3.32(a) provides, in pertinent part: "This section 
applies to domestic entities other than … nonprofit corporations … 
governed by Chapter 3, … which are governed by the separate 
recordkeeping requirements and record inspection provisions set forth in 
[the] entity's respective chapter."  (Emphasis added.)   
SC-2023-0015 
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This amendment would seem to now preclude former members of 
nonprofit corporations from claiming the benefit of the express language 
providing an inspection right to former members in § 10A-1-3.32(b).  
Given this Court's decisions in Lott, supra, and Old Elam, supra, we do 
not need to address the question whether this statute originally applied 
to Cartron or whether its amendment stripped Cartron of his inspection 
rights in this case.3 
 
The amendment may do more than just eliminate a statutory basis 
for a former member's being able to inspect the records of a nonprofit 
corporation.  To me, it is unclear what impact this amendment to § 10A-
1-3.32, which now clearly does not apply to nonprofit corporations, has 
on an individual's inspection right under § 10A-3-2.32, which does apply 
to nonprofit corporations and is at issue in this appeal.  The general 
provision in § 10A-1-3.32(b) expressly provides an inspection right to "any 
 
3Cartron made his demand to inspect Valley Hill's records before 
the amendment excluding nonprofit corporations from the scope of § 10A-
1-3.32 became effective, but he commenced this action one day after the 
effective date of the amendment.  Absent the precedent of Lott and Old 
Elam, these circumstances would create very difficult questions 
regarding retroactive application of the amendment.  However, given 
these precedents, I need not (and do not) express any opinion on those 
retroactivity issues.  
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… member" and "former … members," while the statute that specifically 
applies to nonprofit corporations -- § 10A-3-2.32 -- merely provides the 
inspection right to "any member."  Thus, by using different wording 
(albeit in different statutes), one possible implication of the amendment 
is that the Legislature has precluded former members of a nonprofit 
corporation from inspecting the records pertaining to the time when they 
were members.  See Pinigis v. Regions Bank, 977 So. 2d 446, 453 (Ala. 
2007) ("'[W]hen the [Legislature] includes specific language in one 
section of a statute, but omits that language from another section of the 
statute, we must presume that the exclusion of the language was 
intentional.'" (quoting Halifax Corp. v. First Union Nat'l Bank, 262 Va. 
91, 100, 546 S.E.2d 696, 702 (2001)) (emphasis added)). Further, the 
Alabama Nonprofit Corporation Law defines a member of a nonprofit 
corporation in the present tense as "[o]ne having membership rights in a 
corporation in accordance with the provisions of its governing 
documents."  § 10A-3-1.02(7), Ala. Code 1975 (emphasis added). 
Using this logic, I would expect that future litigants like Valley Hill 
will argue that they are able to extinguish the right to inspect records by 
simply terminating the membership of the requesting party. Further, § 
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10A-1-3.32(a) expressly excludes from the scope of § 10A-1-3.32 various 
types of entities -- not just nonprofit corporations.  Thus, such an 
argument may be made in a broader array of cases.4 
 I offer no opinion on the resolution of these issues at this time.  For 
all the public-policy reasons I listed above, I mention these issues to bring 
them to the attention of the bench, the bar, and the Legislature.  If the 
Legislature actually intends to extinguish the inspection rights of former 
members of certain types of entities (or if it does not wish to do so for the 
policy reasons I outlined above), I encourage the Legislature to clarify the 
language of these statutes.5  For the present, I concur reluctantly with 
 
4The type of entities that might be able to make such an argument 
include "(i) corporations … governed by Chapter 2A or Chapter 4, and 
real estate investment trusts … governed by Chapter 10, … and (ii) 
nonprofit corporations … governed by Chapter 3, … which are governed 
by the separate recordkeeping requirements and record inspection 
provisions set forth in each entity's respective chapter governing that 
entity."  § 10A-1-3.32(a). 
 
 
5Notably, the Legislature has recently amended the Alabama 
Nonprofit Corporation Law, adding Chapter 3A to govern nonprofit 
corporations (and excluding nonprofit corporations governed by Chapter 
3A from the scope of § 10A-1-3.32).  See Ala. Acts 2023, Act No. 2023-503, 
§§ 1 and 2.  Although Act No. 2023-503 will become effective on January 
1, 2024, Chapter 3A will apply only to nonprofit corporations (i) 
incorporated after January 1, 2024, or (ii) that elect to be governed by 
Chapter 3A in their articles of incorporation, until January 1, 2025, when 
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affirming the trial court's summary judgment in favor of Valley Hill and 
the other defendants on Cartron's inspection claim.  
 
 
Chapter 3A will begin applying to all nonprofit corporations. Id. at § 1 (§ 
10A-3A-14.01, Ala. Code 1975).  Thus, the issues existing under Chapter 
3 will remain until that date.  Moreover, Chapter 3A does not address the 
potential issues addressed above.  Chapter 3A provides certain inspection 
rights to "[a] member of a membership nonprofit corporation."  Id. (§ 10A-
3A-4.02, Ala. Code 1975)(emphasis added).  Chapter 3A defines a 
member as "a person in whose name a membership is registered on the 
records of the membership nonprofit corporation and who has a right to 
(i) select or vote for the election of directors or (ii) vote on any type of 
fundamental transaction." Id. (§ 10A-3A-1.02(26), Ala. Code 1975).  
Although Chapter 3A provides a right to request a court order compelling 
a nonprofit corporation to permit inspection of records, it does not address 
the effect of the termination of a person's membership during the action.  
Id. (§ 10A-3A-4.04, Ala. Code 1975).