Case Title: Nelly De La Trinidad v. Capitol Indemnity Corporation

Citation: 2009 WI 8

Docket Number: 2007AP000045

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2009-01-23T00:00:00Z

Document:
2009 WI 8 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2007AP45 
COMPLETE TITLE: 
 
 
Nelly De La Trinidad, Individually, and as 
Special Administrator of the Estate of Elizabeth 
Callejas-De La Trinidad, Deceased, and Victor 
Leonardo Aguilar-Hernandez, and Luz Maria 
Torres-Sanches, Individually, and as Special 
Administrator of the Estate of Marisol Aguilar-
Torres, Deceased, 
          Plaintiffs-Appellants-Petitioners, 
     v. 
Capitol Indemnity Corporation, a Wisconsin 
Insurance Corporation, Halter Wildlife, Inc., 
and Rachel Proko, 
          Defendants-Respondents. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at: 308 Wis. 2d 394, 746 N.W.2d 604 
(Ct App. 2008-Unpublished) 
 
 
OPINION FILED: 
January 23, 2009   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
November 4, 2008   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Kenosha   
 
JUDGE: 
David M. Bastianelli   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the plaintiffs-appellants-petitioners there were briefs 
by Patrick O. Dunphy, Robert D. Crivello, and Cannon & Dunphy, 
S.C., Brookfield, and oral argument by Robert D. Crivello. 
 
For the defendants-respondents there were briefs by James 
S. Smith, Wendy G. Gunderson, and Smith, Gunderson & Rowen, 
S.C., Brookfield, and oral argument by Wendy G. Gunderson. 
 
 
 
 
2009 WI 8 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
 
 
 
No.  2007AP45  
(L.C. No. 
2005CV145) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Nelly De La Trinidad, Individually, and as 
Special Administrator of the Estate of 
Elizabeth Callejas-De La Trinidad, Deceased, 
and Victor Leonardo Aguilar-Hernandez, and Luz 
Maria Torres-Sanches, Individually, and as 
Special Administrator of the Estate of Marisol 
Aguilar-Torres, Deceased, 
 
          Plaintiffs-Appellants-Petitioners, 
 
     v. 
 
Capitol Indemnity Corporation, a Wisconsin 
Insurance Corporation, Halter Wildlife, Inc., 
and Rachel Proko, 
 
          Defendants-Respondents. 
 
FILED 
 
JAN 23, 2009 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
N. PATRICK CROOKS, J.   Petitioners Nelly De La 
Trinidad, Victor Leonardo Aguilar-Hernandez, and Luz Maria 
Torres-Sanches (collectively, De La Trinidad) are the parents of 
two children who drowned in a pond on the grounds of Halter 
Wildlife, Inc.  De La Trinidad seeks review of an unpublished 
No. 2007AP45 
2 
 
court of appeals opinion1 affirming a circuit court order that 
dismissed their lawsuit against Halter Wildlife, Inc. (Halter); 
its insurer, Capitol Indemnity Corporation; and lifeguard Rachel 
Proko, an 
employee 
of Halter, on the grounds that the 
recreational immunity statute2 applies and bars a suit under 
these circumstances. 
¶2 
The sole question before us is whether Halter is "an 
organization or association not organized or conducted for 
pecuniary profit" under Wis. Stat. § 895.52(1)(c) and as such 
entitled to immunity from liability for negligence, as well as 
for safe place violations, for any deaths occurring during 
recreational activity on Halter's land.3  De La Trinidad contends 
that Halter cannot be a nonprofit organization for two reasons: 
first, because it was incorporated in 1984 under the statute 
that since 1953 has governed for-profit corporations; and 
second, because it supplemented membership dues with revenues 
from other activities——revenues that created a budget surplus or 
                                                 
1 Nelly De La Trinidad v. Capitol Indem. Corp., No. 
2007AP45, unpublished slip op. (Wis. Ct. App. Jan. 23, 2008). 
2 Wis. Stat. § 895.52 (2005-06).  All subsequent references 
to the Wisconsin Statutes are to the 2005-06 version unless 
otherwise indicated. 
3 Because the statute also grants immunity to the employees 
and agents of nonprofit landowners, and because Proko is being 
sued in her capacity as an employee of Halter, the resolution of 
this question affects the claims against Proko as well.  "[N]o 
owner and no officer, employee or agent of an owner is liable 
for the death of, any injury to, or any death or injury caused 
by, a person engaging in a recreational activity on the owner's 
property. . . ."  Wis. Stat. § 895.52(2)(b). 
No. 2007AP45 
3 
 
profit which in turn meant dividends for members in the form of 
dues that were lower than they would otherwise have been.  
Halter argues that its articles of incorporation show that it 
was organized as a nonprofit, and its financial records and its 
status with the Internal Revenue Service (IRS) and the Wisconsin 
Department of Financial Institutions (DFI) show that it is not 
conducted for profit and has never paid any dividends.  
¶3 
The recreational immunity statute does not define 
nonprofits by referencing the chapter under which they were 
incorporated, either chapter 180 or 181, so that factor is not 
dispositive of the question.  We see no basis in the statute for 
defining "profit" as broadly as De La Trinidad urges.  Halter's 
articles of incorporation, tax returns, and financial statements 
make clear that it was organized and is conducted as a nonprofit 
organization, a fact recognized by both Wisconsin and the 
federal government.  For these reasons, explained more fully 
below, Halter is a nonprofit organization as defined by the 
statute and is thus entitled to immunity.  
¶4 
We therefore affirm the decision of the court of 
appeals. 
I.  BACKGROUND 
¶5 
Though it filed restated articles of incorporation in 
1984 and 1988 which varied in some respects from the original 
articles, Halter has since its inception consistently defined 
itself as a nonprofit stock corporation under ch. 180 of the 
Wisconsin Statutes.  These articles and successive restated 
articles of incorporation were accepted for filing by the 
No. 2007AP45 
4 
 
secretary of state.  The current articles of incorporation 
describe Halter as a hunt and sportsman club with the purpose of 
promoting wetlands preservation and environmental education.  
Its regulations allow its approximately 275 dues-paying members 
to invite guests4 to events held on the club's grounds, which 
include a clubhouse, a picnic area, a ball park, and a beach and 
pond used for fishing and swimming.  In addition to annual 
membership dues, Halter collects extra fees from members who 
host picnics and other events to which guests are invited. 
¶6 
It was at one such event, a company picnic hosted on 
July 13, 2002, by Finishing and Plating Services (FPS) of 
Kenosha,5 that the tragic drownings of the two children occurred.  
¶7 
De La Trinidad filed this lawsuit, alleging negligence 
and safe place violations by Halter, and negligence by Proko.  
The 
Kenosha 
County 
Circuit 
Court, 
the 
Honorable 
David 
Bastianelli 
presiding, 
granted 
summary 
judgment 
for 
the 
defendants.  The circuit court noted that despite Halter's 
organization under ch. 1806 as a nonprofit stock corporation, all 
                                                 
4 The general public does not have access to Halter's 
facilities; only club members and their guests may be on the 
property.  Payment of invoices or statements is required under 
the organization's regulations to be made by a member's check.  
5 The picnic guests were not charged admission; in keeping 
with 
Halter's 
regulations, 
FPS, 
which 
held 
a 
corporate 
membership with Halter, paid the invoice for the picnic. 
6 The present version of ch. 180 of the Wisconsin Statutes 
governs "Business Corporations," which include those issuing 
stock.  Wis. Stat. § 180.0103(5).  The present version of ch. 
181 governs "Nonstock Corporations," which are defined as 
including nonprofit corporations.  Wis. Stat. § 181.0103(5).  
No. 2007AP45 
5 
 
of the documentation of its existence, from its articles of 
incorporation to its tax returns, supported the conclusion that 
it was organized as a nonprofit.  The circuit court also 
concluded that under the statute's definition, Halter's fund-
raising activities did not make it a for-profit corporation, 
noting that the record showed no distributions of profits or 
earnings to members.  The court of appeals affirmed, pointing 
out that the recreational immunity statute does not define 
nonprofit with reference to the chapter under which the 
organization is incorporated.  The court of appeals also found 
that Halter's nonprofit status turned not on how funds were 
generated, but rather on how they were used.  It noted, "[M]ost 
importantly, Halter is not organized to distribute profits to 
anyone, and it does not do so."  Nelly De La Trinidad v. Capitol 
Indem. Corp., No. 2007AP45, unpublished slip op., ¶15 (Wis. Ct. 
App. Jan. 23, 2008).  For those reasons it affirmed the circuit 
court.  De La Trinidad petitioned this court for review, and on 
May 13, 2008, review was granted. 
II. STANDARD OF REVIEW 
¶8 The application of a statute to undisputed facts is 
reviewed de novo.  DOR v. Menasha, 2008 WI 88, ¶44, ___ Wis. 2d. 
___, 754 N.W.2d 95. 
III. DISCUSSION 
¶9 
The question we address is whether Halter was a 
nonprofit organization under the recreational immunity statute7 
                                                 
7 Wisconsin Stat. § 895.52(2): 
No. 2007AP45 
6 
 
and is therefore entitled to immunity from liability for 
negligence, as well as for the claimed safe place violations.  
Nonprofit organizations are among the types of property owners 
to whom immunity is extended under the statute.8  
                                                                                                                                                             
No duty; immunity from liability. (a) Except as 
provided in subs. (3) to (6), no owner and no officer, 
employee or agent of an owner owes to any person who 
enters 
the 
owner's 
property 
to 
engage 
in 
a 
recreational activity: 
1. 
A duty to keep the property safe for recreational 
activities. 
2. 
A duty to inspect the property, except as 
provided under s. 23.115(2). 
3. 
A duty to give warning of an unsafe condition, 
use or activity on the property. 
(b) Except as provided in subs. (3) to (6), no owner 
and no officer, employee or agent of an owner is 
liable for the death of, any injury to, or any death 
or 
injury 
caused 
by, 
a 
person 
engaging 
in 
a 
recreational activity on the owner's property . . . . 
Subsections (3) to (6) do not apply in this case. They deal 
with government property, malicious acts, and private property 
owners who collect fees for recreational use of the land in 
excess of $2,000 per year. 
There is no dispute here either as to the ownership of the 
land or as to the recreational nature of the activity.   
8 Wisconsin Stat. § 895.52(1),(c) and (d):   
(c) "Nonprofit organization" means an organization or 
association not organized or conducted for pecuniary 
profit.  
(d) "Owner" means either of the following: 
1. 
A person, 
including a governmental body or 
nonprofit organization, that owns, leases or occupies 
property. . . .  
No. 2007AP45 
7 
 
¶10 We begin of course with the statute's definition of a 
nonprofit organization as "an organization or association not 
organized or conducted for pecuniary profit."  Wis. Stat. 
§ 895.52(1)(c).  We address each prong in turn:  how Halter is 
organized and how it is conducted.9 
A. 
"Not organized . . . for pecuniary profit" 
¶11 De La Trinidad's contention that Halter is organized 
for pecuniary profit centers on the fact that, as Halter's 
restated articles of incorporation provide, it is organized as a 
stock-issuing 
corporation 
"pursuant 
to 
the 
authority 
and 
provisions of Chapter 180 of the Wisconsin Statutes."  De La 
Trinidad contends that this means it is by definition a for-
                                                 
9 Wisconsin Stat. § 895.52(1)(c) uses the wording "not 
organized or conducted for pecuniary profit," which can be read 
as intending to mean both prongs would have to be met (as in, 
"neither organized nor conducted for pecuniary profit") or as 
intending to mean that at least one prong would have to be met 
(as in, "not organized or not conducted for pecuniary profit"). 
Yet, in Szarzynski, this court has called the language 
"clear on its face and capable of one simple construction——that 
the organizations that are organized and/or conducted for 
purposes other than profit-making are eligible for recreational 
immunity under the statute."  Szarzynski v. YMCA, 184 Wis. 2d 
875, 890, 517 N.W.2d 135 (1994).  Neither party argues that Wis. 
Stat. § 895.52(1)(c) may be interpreted in the conjunctive or 
disjunctive, and it is not necessary for us to consider the 
question here.  Halter does not argue that because it was either 
organized or conducted as a nonprofit, it was entitled to 
immunity.  Rather, it argues that it met both requirements.  We 
recognize 
that 
the 
"and/or" 
construction 
often 
can 
be 
problematic. 
 
See, 
e.g., 
Wisconsin 
Bill 
Drafting 
Manual 
§ 2.01(9)(a) (2009-10) ("Never use the compound 'and/or.' 'And' 
is conjunctive and 'or' is disjunctive; decide whether you mean 
'and' or 'or' and use the proper word."). 
No. 2007AP45 
8 
 
profit——or at best a corporation masquerading as a nonprofit 
while reserving the legal right to convert to for-profit 
whenever 
it 
chooses——regardless 
of 
what 
its 
articles 
of 
incorporation currently say.  
¶12 Halter argues that the question of whether it is 
organized for pecuniary profit is answered by the statement of 
purpose in its articles of incorporation:  "The corporation will 
be a non-profit corporation which is to be formed not for 
private profit but exclusively for educational, benevolent, 
fraternal, social and athletic purposes within the meaning of 
Section 501(c)(7) of the Internal Revenue Code of 1954 . . . ."  
The articles of incorporation, Halter argues, are consistent 
with its status with the federal and state governments:  the 
Department of the Treasury granted it tax exempt status under 
§ 501(c)(7) of the Internal Revenue Code, and the state 
Department of Financial Institutions has confirmed that it has 
operated since its inception as a nonprofit.  Halter points to 
our decision in Szarzynski v. YMCA, 184 Wis. 2d 875, 890, 517 
N.W.2d 135 (1994), in which we cited the definition provided in 
Black's Law Dictionary for the term "nonprofit corporation."  
That definition made explicit reference to the federal tax code10 
and included corporations "no part of the income of which is 
                                                 
10 In 
fact, 
part 
of 
the 
dictionary's 
definition 
of 
"nonprofit corporation" not quoted in Szarzynski refers readers 
to I.R.C. § 501(c) "for a list of exempt organizations."  
Black's Law Dictionary 1056 (6th ed. 1990).  The clear inference 
from that definition is that it intends to define all § 501(c) 
organizations as nonprofit corporations. 
No. 2007AP45 
9 
 
distributable to its members, directors or officers."  Id. at 
890 (quoting Black's Law Dictionary 1056 (6th ed. 1990)). 
Because it distributes no income to members, directors or 
officers and because it is a nonprofit for purposes of federal 
taxation, Halter argues that it is organized as a nonprofit.  
¶13 A brief summary of the history of chapters 180 and 181 
will help make sense of the parties' arguments.  Prior to 1953, 
it 
was 
not 
unusual 
for 
Wisconsin 
organizations 
to 
be 
incorporated as nonprofit stock corporations under ch. 180.  
There was a change in the statute, however, that took effect 
that year and remained in effect at the time of Halter's 
incorporation, and it is not entirely clear whether by that 
change, the legislature intended to continue to permit nonprofit 
stock organizations under ch. 180.  De La Trinidad relies on a 
1958 opinion of the attorney general that examined the statute 
and concluded otherwise: "[A] nonprofit stock corporation cannot 
be lawfully organized under ch. 180 subsequent to July 1, 
1953 . . . ."  47 Wis. Op. Att'y Gen. 78, 81 (1958).  
¶14 As even that attorney general's opinion acknowledged, 
however, it is difficult to reconcile several provisions of the 
statute.11  One provision, for example, defines "corporation" as 
including "a corporation with capital stock but not organized 
for profit."  Wis. Stat. § 180.02(1) (1957).  Another appears to 
                                                 
11 The opinion noted, "It would have been much more explicit 
if the legislature had stated plainly that no stock nonprofit 
corporations are to be organized under ch. 180 after July 1, 
1953."  47 Wis. Op. Att'y Gen. 78, 81 (1958). 
No. 2007AP45 
10 
 
contemplate nonprofits organized under ch. 180 even after 1953:  
"After June 30, 1953 ch. 180 shall apply to all domestic 
corporations with capital stock, regardless of when they were 
organized and whether for profit or not . . . ."  Wis. Stat. 
§ 180.97(1) (1957) (emphasis added).  However, that same section 
contains a provision that refers only to nonprofits formed prior 
to 1953, and is silent as to nonprofits formed thereafter:  "any 
domestic corporation with capital stock but not organized for 
profit which has before July 1, 1953, been organized under the 
general corporation laws . . . shall be subject to ch. 180 only 
to the extent that the provisions of ch. 180 are not 
inconsistent with the articles or form of organization of such 
corporation . . . ."  Id. (emphasis added). 
¶15 The attorney general's 1958 opinion in response to a 
query from the secretary of state acknowledged that the statute 
"does say that there can be such a thing as a corporation with 
capital stock but not organized for profit."  47 Wis. Op. Att'y 
Gen. at 80.  The opinion also said Wis. Stat. § 180.97(1) 
"leaves the door wide open for nonprofit stock corporations" 
because the language in that section is "about as all-embracing 
as human draftsmanship can devise."  Id.  Nevertheless, in light 
of an absence of any language in Wis. Stat. § 180.97(1) (1957) 
about post-1953 stock nonprofits, the attorney general advised 
that absent explicit statutory authority, the secretary of state 
"would be justified in finding that the proposed articles [for a 
nonprofit stock] do not conform to law."  Id. at 81. 
No. 2007AP45 
11 
 
¶16 De La Trinidad urges us to adopt the reasoning of that 
attorney general's opinion and reach the same conclusion 
concerning Halter's articles of incorporation.  Of course, we 
are not bound to do so.  "'An Attorney General's opinion is only 
entitled to such persuasive effect as the court deems the 
opinion warrants.'"  State v. Gilbert, 115 Wis. 2d 371, 380, 340 
N.W.2d 511 (1983) (quoting Hahner v. Bd. of Educ., 89 Wis. 2d 
180, 192, 278 N.W.2d 474 (Ct. App. 1979)).  In this case, the 
opinion does not warrant great persuasive effect; it candidly 
acknowledges broad language in the statute, for example, that 
leads to the opposite conclusion.  However, even if the attorney 
general's opinion was correct as to ch. 180 nonprofits, it 
merely 
concluded 
that 
the 
secretary 
of 
state 
"would 
be 
justified" in rejecting articles of incorporation for such an 
organization.12 
¶17 Which brings us to a key point: notwithstanding the 
attorney general's opinion on the matter, there is no dispute 
that the secretary of state did accept and file Halter's 
articles 
of 
incorporation 
and 
restated 
articles 
of 
incorporation.  Three times.  From the repeated filing and 
acceptance it is reasonable to infer that the acceptance was 
                                                 
12 Even if the secretary of state erred in permitting a 
nonprofit to organize under ch. 180 rather than requiring it to 
organize under ch. 181, it does not follow that such an error 
alone would convert Halter into a for-profit organization.  The 
court of appeals accordingly held that "whether Halter's form of 
organization is lawful or not is not the issue in this case."  
De La Trinidad, No. 2007AP45, unpublished slip op., ¶8.  We 
agree. 
 
No. 2007AP45 
12 
 
intentional and that the secretary of state saw no legal 
impediment to Halter's incorporation as a nonprofit under ch. 
180.13  Under Wis. Stat. § 180.0203(2), filing of the articles of 
incorporation 
by 
the 
DFI 
"is 
conclusive 
proof 
that 
the 
corporation is incorporated under this chapter . . . ." 
¶18 That 
the 
State 
of 
Wisconsin 
accepted 
Halter's 
incorporation on those terms is verified by the certified 
document from the secretary of state that confirmed the filing 
in 1988.  It is also confirmed by a 2005 letter from the DFI, 
which, 
in 
response 
to 
a 
letter 
from 
Halter 
about 
the 
organization's 
status 
and 
designation 
on 
the 
DFI 
online 
database, stated:  
Regarding your written request involving the corporate 
status of Halter Wildlife, Inc.  I have examined the 
records for this corporation and have determined that 
you are correct in that this entity has, since its 
inception, 
been 
a 
"stock, 
not-for-profit 
corporation.["]  Unfortunately, when our database was 
created we did not set forth a specific "status code" 
for "stock, not-for-profit" entities.  Therefore, 
although it is a not-for-profit entity, it was 
included with all other corporations formed under 
Chapter 180 having a status code of "01" which 
reflects the entity as a business corporation on our 
records.  [Emphasis added.] 
¶19 A second, related argument made by De La Trinidad is 
that an organization formed under ch. 180 cannot be a nonprofit 
because there is nothing in the law governing it that prevents 
                                                 
13 It is clear that a different policy was in effect in 1958 
in the secretary of state's office; the attorney general's 
opinion from that year makes reference to the fact that the 
office at that time was "refus[ing] to accept such articles for 
filing[.]"  47 Wis. Op. Att'y Gen. at 79. 
No. 2007AP45 
13 
 
Halter's members from voting to amend its articles and becoming 
a for-profit corporation.  De La Trinidad notes that Halter's 
articles of incorporation allow the organization to "engage in 
lawful activity within the purposes for which corporations may 
be organized under the Wisconsin Business Corporation Law."  
Because it was organized under ch. 180, which allows for the 
distribution of profits to shareholders under Wis. Stat. 
§ 180.0640, De La Trinidad argues that Halter left open the 
possibility of distributions to shareholders.  
¶20 De La Trinidad cites language from two cases from 
other jurisdictions in support of the proposition that the mere 
potential for for-profit conduct should preclude defining Halter 
as a nonprofit.  Both involve organizations that unsuccessfully 
sought tax exemption by claiming to be nonprofit organizations.  
Ukranian National Urban Renewal Corp. v. Director, Division of 
Taxation, 3 N.J. Tax 326 (1981), is easy to distinguish, 
however, from this case; it turned on the fact that "[t]he 
organizational focus of this tax exemption statute is on the 
statute pursuant to which the taxpayer was organized and whether 
stock was authorized."  Id. at 331 (emphasis added).  In other 
words, the statute at issue there defined a nonprofit in exactly 
the way the recreational immunity statute does not: pursuant to 
the statute under which the property owner is organized.  The 
second case, Produce Exchange Stock Clearing Association, Inc. 
v. Commissioner of Internal Revenue, 27 B.T.A. 1214, 1219 
(1933), is cited for the proposition that a corporation cannot 
use the fact that dividends have never been paid to claim 
No. 2007AP45 
14 
 
nonprofit status, when it has retained a legal ability to do so.  
The case concerned whether the plaintiff was tax-exempt under a 
statute exempting "business leagues," which functioned like 
chambers of commerce.  Thus, the central determination was that 
the plaintiff did not meet the statutory definition of a 
business league and was therefore not tax-exempt.  The language 
cited by De La Trinidad was an afterthought.  ("Although up to 
the present time the petitioner has not paid any dividends to 
its stockholder, the New York Produce Exchange, there appears to 
be no reason under the law why it could not amend its by-laws 
and pay dividends to its sole stockholder."  Id. at 1219.)  
Further, on appeal, the Second Circuit Court of Appeals limited 
its ruling solely to the "business league" question and 
expressly declined to reach the remainder of the questions.  See 
Produce Exch. Stock Clearing Ass'n, Inc. v. Helvering, 71 F.2d 
142, 144 (2d Cir. 1934).  In short, for the reasons noted, 
neither of these cases are as persuasive as De La Trinidad 
argues. 
¶21 While the "potential for profit" argument may have 
some merit, it is essentially an argument that it is not good 
public policy to provide immunity under Wis. Stat. § 895.52 to a 
nonprofit corporation that has, by incorporating under ch. 180, 
left open legal avenues for a later change to a for-profit 
corporation.  In other words, it can be argued that the better 
policy is for the benefits afforded to nonprofits under the 
statute to accrue only to those nonprofits that are, by virtue 
of their incorporation under ch. 181, committed to staying a 
No. 2007AP45 
15 
 
nonprofit.  It is significant, however, that the legislature did 
not choose to define nonprofits in Wis. Stat. § 895.52 with 
reference to the statute under which they were incorporated.14 
¶22 Having established that incorporation under ch. 180 
does not preclude Halter from being organized as a nonprofit, we 
arrive at the question of what makes a nonprofit a nonprofit.  A 
leading treatise says the articles of incorporation are the 
place to focus, and it bolsters our view that the chapter under 
which Halter is organized is not dispositive here (note 
especially the second sentence):  
 
In order to determine the purpose for which a 
corporation was created, courts will primarily refer 
to 
the 
stated 
purpose 
in 
the 
articles 
of 
incorporation. . . .  A recitation in the articles of 
incorporation that an organization is organized under 
a particular statute is not dispositive of the nature 
of 
the 
organization; 
instead, 
a 
corporation's 
statement of purpose in its articles determines the 
corporation's true nature. 
1A Carol A. Jones & Britta M. Larsen, Fletcher Cyclopedia of the 
Law of Private Corporations § 139 (citing State v. Delano Cmty. 
Dev. Corp., 571 N.W.2d 233 (Minn. 1997)). 
¶23 We thus turn to the substantive provisions of Halter's 
restated articles of incorporation, and we see they: 
- explicitly define Halter as a nonprofit;  
                                                 
14 We note that in some other cases, the legislature has 
defined nonprofit organization in those terms.  See, e.g., Wis. 
Stat. § 26.40(1c) (referencing "a nonprofit corporation, as 
defined in s. 181.0103(17)"). 
No. 2007AP45 
16 
 
- forbid income to inure to the benefit of any trustee, 
director or officer;  
- forbid 
dividends 
or 
distributions 
to 
be 
made 
to 
stockholders or members; 
- limit Halter to activities permissible to a particular 
type of nonprofit, § 501(c)(7) organizations; and  
- provide for its assets to be turned over to a public body 
or another nonprofit in the event of its dissolution.  
¶24 As noted above, this court has said that organizations 
that are organized "for purposes other than profit-making" are 
eligible 
for 
recreational 
immunity 
under 
the 
statute.  
Szarzynski, 184 Wis. 2d  at 890. 
¶25 The most recent restated articles of incorporation for 
Halter are those filed with the Office of the Secretary of State 
No. 2007AP45 
17 
 
in 1988.15  They were the documents in effect at the time of the 
drownings in 2002.  They state in part:  
The purpose of this corporation is to engage in lawful 
activity within the purposes for which corporations 
may 
be 
organized 
under 
the 
Wisconsin 
Business 
Corporations Law.  The corporation will be a non-
profit corporation which is to be formed not for 
private 
profit 
but 
exclusively 
for 
educational, 
benevolent, fraternal, social and athletic purposes 
within the meaning of Section 501(c)(7) of the 
Internal Revenue Code of 1954 and in this connection, 
to promote a hunt and sportsman club, to preserve the 
environment in its natural setting and to promote 
education of citizens and youth as to the need to 
conserve and retain wetlands and adjacent uplands in a 
natural state . . . . 
¶26 Additional relevant provisions reiterate the nonprofit 
nature of the organization: 
 
                                                 
15 We take judicial notice of the 1988 Restated Articles of 
Incorporation as we are authorized to do under Wis. Stat 
§ 902.01(2)(b), which provides that "A judicially noticed fact 
must 
be . . . [a] 
fact 
capable 
of 
accurate 
and 
ready 
determination by resort to sources whose accuracy cannot 
reasonably be questioned."  Wis. Stat. § 902.01(3) and (6) 
provide "[a] judge or court may take judicial notice, whether 
requested or not[]" and "[j]udicial notice may be taken at any 
stage of the proceeding."  See Gupton v. City of Wauwatosa, 9 
Wis. 2d 217, 101 N.W.2d 104 (1960) (taking judicial notice of 
articles of incorporation recorded in the office of the 
secretary of state).  The briefs filed with this court quoted 
the 1984 version and the record included only 1984 versions of 
the 
articles 
of 
incorporation. 
The 
1988 
articles 
of 
incorporation were not included despite the fact that references 
were made to them in documents in the record (e.g., in a letter 
attached to an affidavit filed by respondents and in a brief 
filed with the circuit court by De La Trinidad).  This error was 
not cleared up until after oral arguments.  Because the 1988 
articles of incorporation are the relevant articles, there is no 
need to address the earlier versions. 
No. 2007AP45 
18 
 
ARTICLE IV:  The corporation has not been formed for 
pecuniary profit or financial gain, and no part of the 
assets, income or profit of the corporation is 
distributable to, or inures to the benefit of, its 
officers or directors, except to the extent permitted 
under Wisconsin law. . . .  Notwithstanding any other 
provision of this certificate, the corporation shall 
not carry on any other activities not permitted to be 
carried on by a corporation exempt from federal income 
tax under Section 501(c)(7) of the Internal Revenue 
Code of 1954, (or the corresponding provisions of any 
future United States Internal Revenue law). 
 
 
. . . .  
 
ARTICLE VIII: 
 No part of the income of the 
corporation shall inure to the benefit of any trustee, 
director or officer of the corporation, except that 
reasonable compensation may be paid for services 
rendered to or for the corporation affecting one or 
more of its purposes.  In the event of liquidation of 
the assets of the corporation any assets available for 
distribution at the time of such liquidation shall be 
turned over to an educational, benevolent, fraternal, 
social, scientific, religious or athletic association 
within the meaning of Section 501(c)(7) of the 
Internal Revenue Code of 1954, or to a public body.  
Furthermore, no dividends or distributions shall be 
made to stockholders or members of the corporation 
during its existence and that upon its liquidation the 
stockholders or members may receive back no more than 
their original investment.  
 
(Emphasis added.) 
¶27 The language of the articles of incorporation is 
clear. 
 
It 
directly 
prohibits 
distributions 
to 
members, 
trustees, directors and officers, and covers the liquidation of 
the organization's assets at dissolution.  De La Trinidad 
asserts, rather incredibly, that the articles of incorporation 
are irrelevant to the determination of whether Halter was 
organized for profit.  We cannot agree.  It is clear beyond any 
No. 2007AP45 
19 
 
doubt that Halter's relevant organizing documents establish an 
organization with a purpose other than profit-making.  As to De 
La Trinidad's argument about Halter's ability under ch. 180 to 
amend the articles, that ability would become relevant only at 
the point the organization chose to do so.  The immunity 
extended to nonprofit organizations under Wis. Stat. § 895.52, 
in other words, continues to extend to Halter unless it amends 
its articles to allow for a purpose of achieving pecuniary 
profit.  
B. 
"Not . . . conducted for pecuniary profit" 
¶28 De La Trinidad's second argument, that Halter does not 
qualify for immunity under the statute because it is conducted 
for pecuniary profit, depends on a sort of "penny saved is a 
penny earned" definition of profit.  This argument is based on 
the fact that Halter operated in the black, taking in more 
revenues than it required for operating expenses; the fact that 
not all the revenue was from membership dues; and the fact that 
the income of the organization was therefore distributed, albeit 
indirectly, to the members, just as if dividends had been paid.  
This is because those additional fees ultimately reduce the 
membership dues, De La Trinidad argues; the difference between 
what the dues are and what they would be without the additional 
revenues is, according to this argument, the individual member's 
dividend. 
¶29 Halter argues that profits from picnics do not affect 
its immunity because they were returned to the organization, not 
distributed to members.  The relevant inquiry, Halter argues, is 
No. 2007AP45 
20 
 
whether it made distributions to directors, officers, or 
members, and its financial statements and tax returns make clear 
that it never has done so.  Halter further points out that De La 
Trinidad's 
approach, 
limiting 
nonprofit 
status 
to 
those 
organizations 
operating 
at 
a 
deficit, 
is 
unworkable 
and 
undesirable.  
¶30 De La Trinidad's arguments rest on broad definitions 
of the terms "profit" and "distribution."  In support of its 
position, De La Trinidad cites language from State ex rel. Troy 
v. Lumbermen's Clinic, 58 P.2d 812 (Wash. 1936), a case having 
to do with a corporation that the state believed had falsely 
incorporated as a nonprofit while operating as a for-profit.  In 
finding for the state, the court there defined profit thus: 
"Profit does not necessarily mean a direct return by way of 
dividends, interest, capital account, or salaries. . . .  [I]n 
considering . . . the question of whether or not respondent is 
or is not operated for profit, money saved is money earned."  
Id. at 816.  This holding is at quite a variance from a standard 
legal 
definition 
of 
"profit," 
as 
found 
in 
Black's 
Law 
Dictionary: "The excess of revenues over expenditures in a 
business transaction; GAIN (2). Cf. EARNINGS; INCOME."  Black's 
Law Dictionary 1246 (8th ed. 2004).  There is nothing in the 
No. 2007AP45 
21 
 
statute that would support such an expansive definition of the 
word "profit."16  
¶31 De La Trinidad also relies on St. John's Military 
Academy v. Larson, 168 Wis. 357, 170 N.W. 269 (1919), for the 
proposition that when an organization operates in the black, it 
"materially enhance[s] the value of its capital stock, resulting 
in a pecuniary profit to the shareholders."  Id. at 361.  As the 
underlying facts of the case make clear, it was not the indirect 
enhancement of the stock that made St. John's Military Academy a 
for-profit organization; it was the fact that it was organized 
as a profit-sharing corporation and had in two prior years 
declared a dividend on its stock.  
¶32 De La Trinidad's arguments are unavailing.  To adopt 
them would, with the stroke of a pen, convert innumerable 
nonprofits in Wisconsin to for-profit enterprises by virtue of 
the fact that their bills are paid and they have money in the 
bank.  Such a rule would operate to strip any solvent 
§ 501(c)(7) organization of its nonprofit status.  In fact, 
neither case compels the outcome that De La Trinidad seeks.  
First, St. John's is a case about a for-profit organization in 
                                                 
16 "When giving a statute its plain and ordinary meaning, 
courts refer to dictionaries to define those terms not defined 
by the legislature.  Wisconsin Stat. § 990.01(1) provides that 
'[a]ll words and phrases shall be construed according to common 
and approved usage; but technical words and phrases and others 
that have a peculiar meaning in the law shall be construed 
according to such meaning.'"  Rouse v. Theda Clark Med. Ctr., 
Inc., 2007 WI 87, ¶21, 302 Wis. 2d 358, 735 N.W.2d 30 (citation 
omitted). 
No. 2007AP45 
22 
 
the first place.  In St. John's this court noted that the 
school's "articles of incorporation show that it is organized to 
conduct a private enterprise upon the plan of a profit-sharing 
corporation . . . ."  St. John's, 168 Wis. 2d at 361.  Further, 
the case shows that "in 1900 and 1901 it declared a small 
dividend on its stock."  Id. at 360.  In contrast, Halter's 
articles of incorporation explicitly describe the organization 
as 
a 
non-profit, 
and there is no allegation that cash 
distributions have ever been made to members. 
¶33 De La Trinidad's "indirect benefits" argument is 
unsupported by Wisconsin case law.  So long as no profits are 
distributed to members, the fact that members may obtain other 
benefits from an organization is no bar to its nonprofit status.  
That this is the law in Wisconsin is made clear from a reading 
of Bethke v. Lauderdale of La Crosse, Inc., 2000 WI App 107, 
¶13, 235 Wis. 2d 103, 612 N.W.2d 332.  In Bethke, the plaintiff 
challenged the condo association's status as a nonprofit 
organization 
and 
its 
entitlement 
to 
immunity 
under 
the 
recreational immunity statute.  The basis for the challenge was, 
among other things, that the statute was unconstitutional when 
it protected property owners who were nonprofit organizations 
that further no charitable purposes.  There the sole purpose for 
the revenues raised (in that case, monthly fees from each 
member) was "to provide for the maintenance, preservation and 
control of the common area [of the condo]."  Id.  The court 
found no bar in the statute for the benefits that accrued to the 
No. 2007AP45 
23 
 
members, and, consistent with the reasoning in Bethke, we see 
none here. 
¶34 As the court of appeals observed when it decided the 
case before us, "even nonpublic-service-oriented nonprofits 
receive nonprofit immunity under the statute. . . .  Bethke 
specifically rejected the argument that a nonprofit must [] be 
charitable to claim the benefit of recreational immunity.  In 
Bethke . . . the defendant was a condominium association, and 
its revenues were presumably used solely for the benefit of the 
few people who happened to live in the condominium development." 
De La Trinidad, No. 2007AP45, unpublished slip op., ¶14 
(citations omitted). 
¶35 Contrary to De La Trinidad's assertions, there is 
substantial evidence of Halter's being conducted as a nonprofit.  
Halter is recognized by the IRS as a § 501(c)(7) nonprofit 
organization;17 documents from the IRS in the record confirm that 
Halter qualifies as a tax-exempt organization under the Internal 
Revenue Code.  The record also contains Halter's 2002 IRS Form 
990, Return of Organization Exempt from Income Tax, in which 
Halter identifies itself as a § 501(c)(7) organization.  A 
letter from the IRS dated November 23, 1990, states that 
Halter's "organization continues to qualify for exemption from 
Federal income tax" under § 501(c)(7).  
                                                 
17 The Internal Revenue Code exempts from taxation "[c]lubs 
organized for pleasure, recreation, and other nonprofitable 
purposes, substantially all of the activities of which are for 
such purposes and no part of the net earnings of which inures to 
the benefit of any private shareholder."  I.R.C. § 501(c)(7) 
(2006). 
No. 2007AP45 
24 
 
¶36 There is no indication in the record that Halter 
brings in revenues from outside of its membership though it 
could do so under IRS guidelines without forfeiting its 
nonprofit status.18  The record includes regulations from Halter 
that show that it requires all invoices to be paid by member 
checks.  Deposition testimony in the record is clear that the 
attendees at the picnic giving rise to this action were not 
charged for the picnic; a Halter member, FPS of Kenosha, paid 
the invoice.   
¶37 A law review author described the standard controlling 
inquiry for nonprofits: 
The defining characteristic of a nonprofit corporation 
is that it is barred from distributing profits, or net 
earnings, to . . . its directors, officers or members.  
That does not mean that it is prohibited from earning 
a profit.  Rather, it is only the distribution of 
those earnings as dividends that is prohibited. 
 
Jane C. Schlicht, Piercing the Nonprofit Corporate Veil, 66 
Marq. L. Rev. 134, 136 (1982) (internal quotations omitted). 
¶38 The record is replete with evidence that supports 
Halter's 27-year existence as a nonprofit.  It would be an 
absurd result if we were to read the recreational immunity 
                                                 
18 According to an official IRS publication, "A section 
501(c)7 organization may receive up to 35% of its gross 
receipts, including investment income, from sources outside of 
its membership without losing its tax-exempt status.  Of the 
35%, up to 15% of the gross receipts may be derived from the use 
of the club's facilities or services by the general public or 
from other activities not furthering social or recreational 
purposes for members."  IRS Publication 557 at 49 (Rev. June 
2008). 
No. 2007AP45 
25 
 
statute 
as 
making 
a 
for-profit 
organization 
out 
of 
an 
organization that throughout its existence has been governed by 
articles of incorporation that define it as a nonprofit, has 
been documented by state agencies as a nonprofit, and has been 
in compliance with IRS regulations as a nonprofit.  Like the 
circuit court and court of appeals, we see no failure on 
Halter's part to meet the requirements necessary to be a 
nonprofit and thus to be entitled to immunity here. 
IV. CONCLUSION 
¶39 The recreational immunity statute does not define 
nonprofits by referencing the chapter under which they were 
incorporated, either chapter 180 or 181, so that factor is not 
dispositive of the question.  We see no basis in the statute for 
defining "profit" as broadly as De La Trinidad urges.  Halter's 
articles of incorporation, tax returns, and financial statements 
make clear that it was organized and is conducted as a nonprofit 
organization, a fact recognized by both Wisconsin and the 
federal government.  For these reasons, Halter is a nonprofit 
organization as defined by the statute and is thus entitled to 
immunity.  
¶40 We therefore affirm the decision of the court of 
appeals. 
By the Court.—The decision of the court of appeals is 
affirmed. 
No. 2007AP45 
 
 
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