Title: RONALD MUELLER, as an individual and Director of the Star Valley Ranch Association; and WILLIAM L. DALEY, an individual V. VINCE ZIMMER, an individual and STEVE CRITTENDEN, an individual ; RONALD MUELLER, as an individual and Director of the Star Valley Ranch Association; and WILLIAM L. DALEY, an individual v. STAR VALLEY RANCH ASSOCIATION, a Wyoming non-profit corporation; STAR VALLEY RANCH ASSOCIATION BOARD OF DIRECTORS, in their official capacity; ROGER COX, an individual; and COX, OHMAN & BRANDSTETTER, an Idaho chartered law firm

State: wyoming

Issuer: Wyoming Supreme Court

Document:

RONALD MUELLER, as an individual and Director of the Star Valley Ranch Association; and WILLIAM L. DALEY, an individual V. VINCE ZIMMER, an individual and STEVE CRITTENDEN, an individual ; RONALD MUELLER, as an individual and Director of the Star Valley Ranch  Association; and WILLIAM L. DALEY, an individual v. STAR VALLEY RANCH ASSOCIATION, a Wyoming non-profit corporation; STAR VALLEY RANCH ASSOCIATION BOARD OF DIRECTORS, in their official capacity; ROGER COX, an individual; and COX, OHMAN & BRANDSTETTER, an Idaho chartered law firm2005 WY 156124 P.3d 340Case Number: 05-9, 05-10Decided: 12/05/2005
OCTOBER 
TERM, A.D. 2005

 
 
RONALD 
MUELLER, as an individual and

Director 
of the StarValley Ranch 
Association;

and 
WILLIAM L. DALEY, an individual,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 
VINCE 
ZIMMER, an individual; and

STEVE 
CRITTENDEN, an individual,

 
 
Appellees

(Defendants).

 
 
RONALD 
MUELLER, as an individual and

Director 
of the StarValley Ranch 
Association;

and 
WILLIAM L. DALEY, an individual,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 

STAR 
VALLEY RANCH 
ASSOCIATION, a

Wyoming 
non-profit corporation; STARVALLEY

RANCH 
ASSOCIATION BOARD OF DIRECTORS,

in their 
official capacity; ROGER COX, an individual;

and COX, 
OHMAN & BRANDSTETTER, an Idaho

chartered 
law firm,

 
 
Appellees

(Defendants).

 
 

Appeal 
from the DistrictCourtofLincolnCounty

The 
Honorable Dennis L. Sanderson, Judge

 
 
Representing 
Appellants:

Robert 
J. Logan of Thayne, 
Wyoming.

 
 

Representing 
Appellees:

John R. 
Hursh of Central Wyoming Law Associates, P.C., Riverton, Wyoming, for Appellees 
Zimmer and Crittenden; William K. Rounsborg of White and Steele, P.C., Denver, 
Colorado, for Appellees Star Valley Ranch Association and Star Valley Ranch 
Association Board of Directors; and Donald F. Carey of Quane Smith, LLP, Idaho 
Falls, Idaho, for Appellees Cox and Cox, Ohman & 
Brandstetter.

 
 
Before 
HILL, C.J., and GOLDEN, KITE, VOIGT, and BURKE, 
JJ.

 
 

HILL, 
Chief Justice.

 
 
[¶1]      The Star Valley 
Ranch Association (the Association) is a nonprofit, mutual benefit corporation 
that manages a recreational residential subdivision in Lincoln County, Wyoming.  The Association is incorporated under the 
Wyoming Nonprofit Corporation Act, Wyo. Stat. Ann. §§17-19-101, et seq. (LexisNexis 2005).  A Board of Directors governs the 
Association with its members elected by the lot owners within the subdivision. 
 The day-to-day operations of the 
Association are managed by a general manager, who is hired by and serves at the 
pleasure of the Board.  Appellant 
Ronald D. Mueller (Mueller) is a lot owner and a member of the Association's 
Board of Directors.  Appellant 
William L. Daley is a lot owner.  Appellants filed a derivative action1 against the Association, its Board 
of Directors (the Board), and former directors and general managers of the 
Association.  Appellants alleged 
that through fraud, misrepresentation, and conflict of interest transactions, 
the former directors and general managers deprived the Association of money to 
which it was entitled and that the Board breached its fiduciary duty to the 
Association members by failing to collect those funds.  Appellants also filed a declaratory 
judgment action seeking to have an election to amend the Association bylaw 
setting the number of directors on the Board declared void.  The district court granted summary 
judgment motions filed by the various defendants, and Appellants appeal.  We affirm the summary judgments on the 
derivative action and finding that one of the Appellants' claims was frivolous, 
we award the defendants their costs, including attorneys' fees incurred in 
defending against that claim.  We 
also affirm the district court's summary judgment on the declaratory judgment 
action. 

 
 
ISSUES

 
 
[¶2]      In Case No. 
05-09, the Appellants set forth the following issues:

 
 

1.      
Did the 
District Court err in granting summary judgment to Steve Crittenden when there 
were material facts in dispute as to whether Crittenden and the Star Valley 
Ranch Association ever had an oral agreement settling the overpayment of 
Crittenden's salary and other alleged benefits?

 
 

2.      
Did the 
District Court err by granting summary judgment to Vince Zimmer when there were 
material facts in dispute and Zimmer failed to refute the allegation of 
fraud?

 
 

3.      
Was the 
settlement agreement between Vince Zimmer and the Star Valley Ranch Association 
void as a matter of public policy?

 
 

4.      
Was the 
hiring of Steve Crittenden and Vince Zimmer as general managers without a 
personal services contract an ultra vires act?

 
 
Defendants 
Vince Zimmer (Zimmer) and Steve Crittenden (Crittenden) responded with a 
statement of two issues:

 
 

1.      
With 
reference to Appellee Crittenden, was the District Court correct in granting 
Summary Judgment on the basis of a salary overpayment settlement ratified by the 
Board of Directors of Star Valley Ranch Association within which any and all 
prior antecedent salary and employment issues merged, which settlement has been 
fully performed absent the showing by pleading or otherwise of any fraud as 
required by Wyoming law?

 
 

2.      
With 
reference to Appellee Zimmer, was the District Court correct in granting Summary 
Judgment giving full effect to a written settlement agreement ratified by the 
Board of Directors of Star Valley Ranch Association within which all previous 
claims and disputes merged, which settlement agreement has been fully performed, 
absent a showing of a viable fraud claim?

 
 
In Case 
No. 05-10, the Appellants set out these issues:

 
 

A.     
Re 
Appellees Roger Cox and Cox, Ohman & Brandstetter

 
 

1.       
As a 
matter of law, was the transaction between the Association, Cox and Cox, Ohman 
& Brandstetter a conflict of interest transaction and, if so, did Cox obtain 
specific board approval required by state law and the Association Bylaw 
regulating conflict of interest transactions?

 
 

2.       
Did the 
District Court err in precluding Appellants from inquiring into the early 
billings of Cox, Ohman & Brandstetter and then use information from those 
billings to conclude that all charges were in furtherance of corporation 
business and that there was only an 8% average markup on the 
bills?

 
 

3.       
Did the 
District Court err in precluding the claim of negligent misrepresentation and 
fraud against Roger Cox?

 
 

B.     
Re 
AppelleesStarValley Ranch Association and its Board of 
Directors

 
 

1.       
Did the 
District Court err in not applying the more specific bylaw in determining if the 
increase in the size of the board of directors received the necessary 
affirmative vote?

 
 

2.       
Did the 
District Court err in concluding that the Association was not required to 
maintain records of actions taken by the members and the 
board?

 
 

3.       
Did the 
District Court err in determining that the Board exercised good business 
judgment in its decision to not seek the return of overpayment of salaries and 
benefits from prior general managers and the return of monies earned from a 
conflict of interest transaction without specific board 
approval[?]

 
 
Defendant 
Roger Cox (Cox) and the law firm of Cox, Ohman & Brandstetter (the law firm) 
reply with these issues:

 
 

1.      
Does 
this Court lack subject matter jurisdiction?

 
 

2.      
Did the 
trial court properly grant Roger Cox and Cox, Ohman & Brandstetter's motion 
for summary judgment on the equitable defenses of estoppel by acquiescence, 
laches and promissory estoppel as against Appellants' shareholder derivative 
lawsuit?

 
 
The 
Association and the Board offer the following statements of the 
issues:

 
 

1.      
Was the 
District Court correct in concluding that Appellees' properly placed Motion for 
Summary Judgment with respect to the change in the number of members of the 
Board of Directors from five to seven ought to be granted when Appellants failed 
to come forward with any competent and admissible evidence to call into question 
the vote of the membership to effect such change?

 
 

2.      
Was the 
District Court correct in concluding that Appellees' properly placed Motion for 
Summary Judgment with respect to Appellants' derivative claims concerning 
expense reimbursements to Cox ought to be granted when Appellants failed to come 
forward with any competent and admissible evidence to call into question the 
validity of those reimbursements, or to identify any legal authority to allow 
Appellants to challenge the actions of the Board?

 
 

3.      
Was the 
District Court correct in concluding that Appellees' properly placed Motion for 
Summary Judgment with respect to Appellants' derivative claims concerning 
alleged salary overpayments to Crittenden and Zimmer ought to be granted when 
Appellants failed to come forward with any competent and admissible evidence to 
call into question the validity of the decision not to pursue recovery of those 
alleged overpayments, or to identify any legal authority to allow Appellants to 
challenge the actions of the Board?

 
 

STANDARD 
OF REVIEW

[¶3]      Our oft 
reiterated and well established standard for reviewing appeals from a summary 
judgment order:

 
 
When we 
review a summary judgment, we have before us the same materials as did the 
district court, and we follow the same standards which applied to the 
proceedings below.  The propriety of 
granting a motion for summary judgment depends upon the correctness of the dual 
findings that there is no genuine issue as to any material fact and that the 
prevailing party is entitled to judgment as a matter of law.  Reed v. Miles Land and Livestock 
Company, 2001 WY 16, ¶9, 18 P.3d 1161, ¶9 (Wyo. 2001).  A genuine issue of material fact exists 
when a disputed fact, if proven, would have the effect of establishing or 
refuting an essential element of an asserted cause of action or defense.  We, of course, examine the record from a 
vantage point most favorable to that party who opposed the motion, affording to 
that party the benefit of all favorable inferences that fairly may be drawn from 
the record.  Scherer Construction, LLC v. Hedquist 
Construction, Inc., 2001 WY 23, ¶15, 18 P.3d 645, ¶15 (Wyo. 2001); Central Wyoming Medical Laboratory, LLC v. 
Medical Testing Lab, Inc., 2002 WY 47, ¶15, 43 P.3d 121, ¶15 (Wyo. 
2002).

 
 

Burnham 
v. Coffinberry, 2003 
WY 109, ¶9, 76 P.3d 296, ¶9 (Wyo. 2003).  Questions of law are reviewed de novo.

 
 

Martin 
v. Committee for Honesty and Justice at Star Valley Ranch, 2004 
WY 128, ¶8, 101 P.3d 123, 127 (Wyo. 2004).  We may uphold the grant of summary 
judgment upon any proper legal ground finding support in the record.  Coates v. Anderson, 2004 WY 11, ¶5, 84 P.3d 953, 956 (Wyo. 2004).

 
 

DISCUSSION

Jurisdiction

 
 
[¶4]      Before getting to 
the substance of the parties' arguments regarding the propriety of the district 
court's summary judgment orders, we must first address two issues questioning 
our jurisdiction to resolve these appeals raised by Appellee 
Cox.

 
 
[¶5]      Cox contends that 
this Court lacks subject matter jurisdiction because the motions for summary 
judgment filed by the various defendants were not ruled upon by the district 
court within 90 days, and by operation of W.R.C.P. 6(c)(2), they were deemed 
denied.2  Cox relies on our decision in Paxton Resources, LLC  v. Brannaman, 2004 WY 93, 95 P.3d 796 (Wyo. 2004).  That case 
concerned the consequences of a trial court's failure to timely issue an order 
on post-trial motions.  Under 
Wyoming's 
Rules of Appellate Procedure, a notice of appeal must be filed within 30 days of 
the entry of the appealable order.  W.R.A.P. 2.01(a).  That time period may be tolled by the 
filing of a motion for judgment under W.R.C.P. 50(b), a motion to amend or make 
additional findings of fact under W.R.C.P. 52(b), a motion to alter or amend the 
judgment or for a new trial under W.R.C.P. 59.  W.R.A.P. 2.02(a).  The 30-day time period for filing a 
notice of appeal commences to run upon the entry of any order granting or 
denying the motions for judgment, to amend or make additional findings of fact, 
to alter or amend the judgment or upon the denial of a motion for a new trial. 
 W.R.A.P. 2.02(b).  If no order is entered, however, the full 
time for appeal commences to run when the motions are deemed denied.  Id. A motion is deemed denied if it has 
not been determined within 90 days after it was filed.  W.R.C.P. 6(c)(2).  In Paxton, the jury rendered a verdict, and 
Paxton filed motions under W.R.C.P. 50 and 59 for judgment as a matter of law, 
for new trial, and for remittitur.  Paxton, 95 P.3d  at 797-98.  The 90-day "deemed denied" date passed, 
as well as the 30-day period for filing a notice of appeal, before the district 
court issued an order denying the motions.  Id. 
at 799.  After noting that Rule 
6(c)(2) did not allow for any continuances and that the whole point of a "deemed 
denied" provision was that the judgment would automatically become final and 
appealable upon passage of the specified time, we held that the district court 
no longer had jurisdiction to consider the motions once that occurred.  Id. 
at 800-802.  We concluded that an 
appeal not filed within 30 days after post-trial motions were deemed denied is 
untimely and would be dismissed.  Id. 
at 802. 

 
 
[¶6]      The procedural 
chronology in this case is as follows:

 
 

·        
July 1, 
2003  Zimmer and Crittenden file motion for summary 
judgment.

 
 

·        
July 3, 
2003  Cox and Cox, Ohman & Brandstetter file motion for summary 
judgment.

 
 

·        
October 
6, 2003  The Association and Board file motion for summary 
judgment.

 
 

·        
October 
21, 2003  Appellants file cross-motion for partial summary 
judgment.

 
 

·        
November 
17, 2003  Hearing held on summary judgment motions.

 
 

·        
July 14, 
2004  District court issues Decision Letter granting the summary judgment 
motions filed by all of the defendants and effectively denying Appellants' 
motion.

 
 

·        
August 
13, 2004  Order granting Zimmer and Crittenden motion for summary judgment 
entered.

 
 

·        
September 
7, 2004  Order granting motion for summary judgment filed by Cox and Cox, Ohman 
& Brandstetter entered.

 
 

·        
September 
9, 2004  Appellants file notice of appeal of order granting Zimmer and 
Crittenden summary judgment.

 
 

·        
September 
27, 2004  Order granting motion for summary judgment filed by the Association 
and the Board entered.

 
 

·        
October 
1, 2004  Notice of appeal from the orders granting summary judgment for Cox and 
Cox, Ohman & Brandstetter and the Association and Board filed by 
Appellants.

 
 
Obviously, 
90 days passed from the filing of all of the motions for summary judgment filed 
by the parties before the district court ruled on them.  There are, however, several critical 
differences between the situation here and those present in Paxton that lead us to reject Cox's 
argument. 

 
 
[¶7]      The key to the 
holding in Paxton was that the 30-day 
period for filing an appeal had commenced upon passage of the "deemed denied" 
date and had already lapsed when the district court finally issued its decision 
on the defendants' post-trial motions.  The district court did not have 
jurisdiction to rule on those motions, however, because the judgment became 
final upon the lapse of the time in which an appeal could be filed.  As we recently stated in a case where the 
defendant had filed a renewed motion for extension of time to file a response to 
discovery requests for admission after a previous motion for the same was deemed 
denied under Rule 6(c)(2):

 
 
The 
difference between the Paxton case 
and the case at bar is obvious.  In 
Paxton, the "deemed denied" rule 
applied to a final judgment; conversely, in this case, the "deemed denied" rule 
simply applied to an interlocutory discovery motion.  The case law is replete with instances 
where renewed discovery motions are considered. (Citations 
omitted.)

 
 

Hodges 
v. Lewis & Lewis, Inc., 2005 
WY 134, ¶21, 121 P.3d 138, 145 (Wyo. 2005).  Here, the motions were for summary 
judgment  they were not post-trial motions.  When the summary judgment motions were 
deemed denied by the lapse of 90 days from their filing, the district court did 
not lose jurisdiction because the denial of a motion for summary judgment is not 
a final appealable order.3  McLean v. Hyland Enterprises, Inc., 2001 
WY 111, ¶17, 34 P.3d 1262, 1267-68 (Wyo. 2001).  There was no final judgment at the time 
the motions were deemed denied, so the rule in Paxton is simply not applicable to the 
situation before us in this case, and we have jurisdiction over the matter.4

 
 
[¶8]      The second 
jurisdictional issue raised by Cox is a contention that the district court did 
not issue an appealable order because its ruling on Cox's motion for summary 
judgment did not resolve all issues between him and Appellants.  Specifically, Cox argues that he did not 
move for summary judgment on a fraud claim advanced by Appellants alleging that 
Cox had made a false statement to the Board regarding a claim by Zimmer for 
unpaid overtime.  Since the judgment 
on his motion could only be viewed as a partial grant of summary judgment and 
there was no entry of a final judgment upon an express determination that there 
was no just reason for delay pursuant to W.R.C.P. 54(b), Cox contends that this 
appeal must be dismissed.

 
 
[¶9]      In their motion 
for summary judgment, Cox and Cox, Ohman & Brandstetter set forth the 
following prayer for relief:

 
 
WHEREFORE, 
Defendants Cox and Cox, Ohman & Brandstetter respectfully request that this 
Court grant their motion for summary judgment and dismiss Plaintiffs' Revised First Amendment 
to First Amended Complaint against them with prejudice and for such further 
and additional relief as the Court deems appropriate under the circumstances. 
 [Emphasis 
added.]

 
 
In their 
Revised First Amendment to First Amended Complaint, the Appellants alleged that 
Zimmer had knowingly made a fraudulent claim for unpaid overtime.  With respect to Cox, the Appellants 
alleged that he had made false statements regarding the validity of Zimmer's 
overtime claim to the Board.  In 
order for the district court to grant Cox the relief requested in his motion for 
summary judgment  dismissal of Appellants' Revised First Amendment to First 
Amended Complaint with prejudice  it necessarily would have had to determine 
all claims raised against Cox therein.  Indeed, in its decision letter, the 
district court stated that:

 
 
Summary 
judgment in favor of Cox is granted for the reasons set forth in Cox's motion 
and memoranda.  The finding that 
Cox's billings were appropriate pursuant to an agreement precludes the claims of 
negligent misrepresentation and fraud.  [Emphasis added.]

 
 
As the 
fraud claim set forth in the Revised First Amendment to First Amended Complaint 
was the only fraud claim against Cox, it is clear that the district court 
considered the matter raised by Cox's summary judgment motion and proceeded to 
determine it.  All indications in 
the record are that the motion for summary judgment was for dismissal of all 
claims against Cox in their entirety.  There is nothing that even remotely 
suggests that Cox intended or the district court ever considered the motion as a 
partial one excluding the fraud claim.  Cox's argument is without merit; the 
district court order on Cox's motion for summary judgment was a final, 
appealable order, and this Court has jurisdiction over the 
appeal.

 
 

Derivative 
claims alleging fraud against Zimmer, seeking restitution from Crittenden for 
overpaid salary and breach of fiduciary duty by the Board for failure to seek 
reimbursement

 
 
[¶10]   Zimmer was elected to the Board in 
1996.  He resigned that position to 
accept an appointment from the Board as general manager of the Association.  Zimmer resigned from that position in 
January of 2000.  Contemporaneously 
with his resignation, Zimmer submitted a request for unpaid overtime incurred 
attending Board ordered meetings and other obligations.  The Board denied Zimmer's 
request.

 
 
[¶11]   It was later discovered that a 
clerical error had resulted in Zimmer's salary being overpaid by $2,025.87.  After giving Zimmer credit for paid time 
off, the Board sent Zimmer a letter demanding repayment of $1,380.47.  Zimmer responded in writing reasserting 
his demand for unpaid overtime, which he estimated to be $2,482.96.  The Board's staff recommended that the 
matter be settled as the legal costs of pursuing collection were not worth the 
amount in dispute.  A mutual release 
was then executed wherein the Association released Zimmer from all claims of 
overpayment while Zimmer released his claims for unpaid overtime and any other 
compensation earned during his employment as general 
manager.

 
 
[¶12]   After Zimmer resigned as general 
manager, the Board began a search for his replacement.  The Board wanted Crittenden to 
temporarily assume the general manager duties during the interim.  At the time, Crittenden was a director 
on the Board, and the Association's bylaws prohibited a director from serving as 
general manager.  As a compromise, 
the Board created the position of "Business Agent" to allow Crittenden to 
continue to serve as a director and fulfill the duties of the general manager 
until a permanent replacement for Zimmer was found.  In March of 2000, Crittenden accepted 
appointment as general manager on a permanent basis and resigned his 
directorship.

 
 
[¶13]   As with Zimmer, it was discovered 
that Crittenden had been overpaid.  
Crittenden believed that the amount of overpayment was $562.85.  He instructed the payroll clerk to 
withhold $281.43 for two consecutive pay periods.  On June 23, 2001, Crittenden was 
terminated as general manager.  In 
October of 2001, a finance committee determined that Crittenden had been 
overpaid $1,520.13 more than the amount Crittenden had withheld from his 
paycheck.  In September of 2002, the 
general manager of the Association sent a demand letter to Crittenden requesting 
repayment of that amount.  Crittenden responded that he had made 
restitution by having the $562.85 withheld from his paycheck and that a prior 
Board meeting in executive session had approved that as a full settlement of the 
issue.  The Board's staff 
recommended that the matter be settled as the legal costs of pursuing collection 
were not worth the amount in dispute.  On November 16, 2002, the Board, citing 
the previous agreement with Crittenden, voted four to one to settle the 
claim.

 
 
[¶14]   In their Complaint, Appellants 
alleged that Zimmer's claim for unpaid overtime was false and fraudulent.  They contended that Zimmer "knowingly and 
with intent to deceive" made an "unjustified and false" claim for unpaid 
overtime in order to mislead the Board and so avoid having to make restitution 
on the overpaid salary.  Appellants 
alleged that the Board knew or should have known that Zimmer's claim for 
overtime was meritless and that its failure to seek full restitution for the 
overpayment breached its fiduciary duty to the Association members and 
constituted a waste of Association assets.  
The district court granted Zimmer's motion for summary judgment.  No reason was specified for the ruling; 
the court only stated that the motion was granted for reasons set forth by 
Zimmer in his motion and memoranda.

 
 
[¶15]   With regard to Crittenden, 
Appellants alleged that the Board should not have approved the settlement 
because there was no evidence that a previous Board had forgiven the overpayment 
to Crittenden and that by doing so, the Board breached its fiduciary duty to the 
Association's members.  Appellants 
sought restitution from Crittenden for the full amount of overpayment.  The district court granted summary 
judgment without analysis.

 
 
[¶16]   We begin with the fraud claim 
against Zimmer.  In order to 
establish fraud, a plaintiff must demonstrate, by clear and convincing evidence, 
that: (1) the defendant made a false representation intended to induce action by 
the plaintiff; (2) the plaintiff reasonably believed the representation to be 
true; and (3) the plaintiff relied on the false representation and suffered 
damages.  Bitker v. First National Bank in 
Evanston, 2004 WY 114, ¶12, 98 P.3d 853, 856 (Wyo. 2004).  Within the context of a summary judgment, 
we have said the following regarding claims of fraud:

 
 
When 
determining if a genuine issue of material fact exists regarding a claim of 
fraud, a trial judge must bear in mind the actual quantum and quality of proof 
necessary to support liability.  [Lee v. LPP Mortgage, Ltd., 2003 WY 92, 
¶12, 74 P.3d 152, 158 (Wyo. 2003).]  In ruling on a motion for summary 
judgment, "the judge must view the evidence presented through the prism of the 
substantive evidentiary burden."  Id. A demonstration of a genuine issue 
of material fact requires more than repeated assertions that a defendant is 
liable.  Radosevich v. Board of CountyCommissioners of the County of Sweetwater, 776 P.2d 747, 750 (Wyo. 1989). 

 
 
            
Assuming the pleadings alleged fraud with sufficient particularity, and 
the parties accused of fraud have presented facts in support of a motion for 
summary judgment that refute the allegations of fraud, the party relying upon 
the fraud claims then must demonstrate the existence of genuine issues of 
material fact by clear, unequivocal and convincing evidence.  [Richardson v. Hardin, 5 P.3d 793, 797 (Wyo. 
2000).]

 
 

Bitker, 
¶¶11-12, 98 P.3d  at 855-56.

 
 
[¶17]   After reviewing the record, we 
conclude that the district court was correct to grant summary judgment.  Appellants' allegation of fraud was not 
pleaded with particularity.  Indeed, 
allegations of fraud are all that Appellants have provided; there are no facts 
to support their claim.  Appellants' 
allegation of fraud is entirely predicated on their belief that Zimmer's claim 
for overtime was without merit.  However, there is no evidence in the 
record that Zimmer knew his claim was false or without merit.  We are presented only with Appellants' 
speculations on Zimmer's motives.  This is not sufficient to meet 
Appellants' burden to demonstrate that genuine issues of material fact existed 
by "clear, unequivocal, and convincing evidence" in response to Zimmer's motion 
for summary judgment.  See Bitker, ¶13, 98 P.3d  at 
856.

 
 
[¶18]   Furthermore, whether or not 
Zimmer's claim for overtime had merit or not is irrelevant to whether the mutual 
release he signed with the Board was valid.

 
 
This 
Court has on several occasions addressed the theory of "compromise and 
settlement."  In Parsley v. Wyoming Automotive Co., 395 P.2d 291, 295 (Wyo. 1964), we described the general rule of compromise and 
settlement as being "that the settlement of a bona fide dispute or a doubtful or 
unliquidated claim, if made fairly and in good faith, is a sufficient 
consideration for a compromise based thereon."  We have defined a compromise as "an 
agreement between two or more persons who, to avoid a lawsuit, amicably settle 
their differences on such terms as they can agree on.'"  Peters Grazing Ass'n v. Legerski, 544 P.2d 449, 456 n.3 (Wyo. 1975) (quoting 15A C.J.S. Compromise and Settlement § 1 at 170). 
 A settlement agreement is a 
contract and, therefore, subject to the same legal principles that apply to any 
contract. In re Estate of Maycock, 
2001 WY 103, ¶10, 33 P.3d 1114, 1117 (Wyo. 2001); Matter of Estate of McCormick, 926 P.2d 360, 362 (Wyo. 
1996).  The elements are the same as 
the elements of any contract: offer, acceptance, and consideration, and 
establishment of the existence of these elements leads courts to conclude that 
mutual assent has occurred.  Matter of Estate of McCormick, 926 P.2d  
at 362.  A compromise and settlement 
agreement is, also like other contracts, subject to construction as a matter of 
law.  Ludvik v. James S. Jackson Co., Inc., 
635 P.2d 1135, 1143 (Wyo. 1981).

 
 

A 
contract made in settlement of claims is valid even if the claims settled are of 
doubtful worth. This means that this court will not look behind a settlement 
agreement to see who would have prevailed in a dispute out of which the 
settlement agreement arises.  If the 
settlement agreement itself meets contractual requirements, it will be 
enforced.

 
 

Kinnison 
v. Kinnison, 627 P.2d 594, 596 (Wyo. 1981). 

 
 

Dobson 
v. Portrait Homes, Inc., 2005 
WY 95, ¶9, 117 P.3d 1200, 1204 (Wyo. 2005) (emphasis added).  We are not concerned with the worth of 
Zimmer's claim for overtime.  The 
question we are concerned with here is whether or not the settlement agreement 
satisfies the requirements of a contract.  The answer is unequivocally yes.  Both parties to the agreement agreed to 
relinquish a claim that they had against the other in exchange for the other 
party to doing the same with their claim.  When a party asserting a "claim 
relinquishes it as part of a compromise and settlement, such a concession is 
sufficient consideration for the promise or act of the other party."  Dobson, ¶10, 117 P.3d  at 1205.  The summary judgment on the fraud claim 
against Zimmer is affirmed.

 
 
[¶19]   Returning to Crittenden, Appellants 
argue that summary judgment was improper because there are facts in dispute as 
to whether or not a prior agreement existed between Crittenden and a previous 
board.  Appellants contend that no 
reasonable board would have approved a settlement under these circumstances. 

 
 
[¶20]   We held many years ago that in a 
case where a minority stockholder sought to have the sale of certain corporate 
assets declared void that "[i]n the absence of fraud, the fact that a difference 
of opinion may have existed between the majority and minority shareholders would 
not justify interference by a court of equity."  Smith v. Stone, 21 Wyo. 62, 91, 128 P. 612, 619 (Wyo. 1912), (citing North American Land & Timber Company v. 
Watkins, 109 Fed. 101, 48 CCA 254 (C.C.A. 5 1901)). ("It is a general rule 
that courts of equity will not interfere in questions of corporate management or 
policy.  They are reluctant to 
undertake the management of private corporations, and, in the absence of fraud, 
usurpation, or gross negligence and mismanagement equivalent to fraud, they 
generally refuse to interfere, and allow the majority of the stockholders to 
rule, leaving dissatisfied stockholders to redress their grievances by ordinary 
corporate methods.")  This principle 
embodied in Smith is known as the 
business judgment rule.  The rule 
governs the question of whether or not and to what extent the business decisions 
of a corporate entity should be subject to judicial 
review.

 
 
The 
business judgment rule is a standard of judicial review for director conduct, 
not a standard of conduct.  The rule 
presumes that business decisions are made by disinterested and independent 
directors on an informed basis and with a good faith belief that the decision 
will serve the best interests of the corporation.  If directors are sued with respect to a 
decision they have made (either in an action by the corporation on its own 
behalf, by shareholders acting derivatively on behalf of the corporation, by 
shareholders suing individually on their own behalf or as a class, or by a 
regulatory body that has assumed control of the corporation and is suing on 
behalf of the corporation), the court will examine the decision only to the 
extent necessary to determine whether the plaintiff has alleged and proven facts 
that overcome the business judgment rule presumption that business decisions are 
made by disinterested and independent directors on an informed basis and with a 
good faith belief that the decisions will serve the best interests of the 
corporation.  If the presumption has 
not been overcome, "then the business judgment rule prohibits the court from 
going further and examining the merits of the underlying business decision" and 
"prevent[s] a factfinder, in hindsight, from second-guessing the decisions of 
directors." . . . 

 
 
            
. . . .

 
 
Thus, 
where "the board act[s] with due care, good faith, and in the honest belief that 
they are acting in the best interests of the stockholders , the Court gives 
great deference to the substance of the directors' decision and will not 
invalidate the decision, will not examine its reasonableness, and will not 
substitute [its] views for those of the board if the latter's decision can be 
attributed to any rational business purpose.''"  In other words, "[c]ourts give deference 
to directors' decisions reached by a proper process, and do not apply an 
objective reasonableness test in such a case to examine the wisdom of the 
decision itself."  A court does not 
"substitute its own notion of what is or is not sound business judgment" in 
place of the board's judgment.  Additionally, "[a]pproval of a 
transaction by a majority of independent, disinterested directors almost always 
bolsters [the] presumption that the business judgment rule attaches to 
transactions approved by a board of directors that are later attacked on grounds 
of lack of due care."

 
 
. . . 
.

 
 
In order 
to state a claim, a shareholder plaintiff has the "heavy burden" of alleging and 
proving facts  not merely legal conclusions  that overcome the business 
judgment rule presumption.  The 
business judgment rule presumption thus "is a rule of evidence that places the 
initial burden of proof on the plaintiff" challenging the board's decision. 
 "If a shareholder plaintiff fails 
to meet this evidentiary burden, the business judgment rule attaches to protect 
corporate officers and directors and the decisions they make." "[T]o rebut the 
presumption, a shareholder plaintiff assumes the burden of providing evidence 
that the board of directors, in reaching its challenged decision, breached any 
one of its triad of fiduciary duties: good faith, loyalty or due care."  "[I]f the plaintiff fails to rebut the 
presumption that the directors acted in good faith, in the corporation's best 
interest and on an informed basis, the business judgment standard protects both 
the directors and the decisions they make."  [Footnotes 
omitted.]

 
 
1 Dennis 
J. Block, Nancy E. Barton & Stephen A. Radin, The Business Judgment Rule: 
Fiduciary Duties of Corporate Directors, at 4-5; 21-22; 25-27 (5th 
ed. 1998) (and cases cited therein).  "As the name implies, a necessary 
predicate for the application of the business judgment rule is that the 
directors' decision be that of a business judgment and not a decision 
 which construes and applies a statute and a corporate bylaw."  Lake Monticello Owners' Association v. 
Lake, 250 Va. 565, 463 S.E.2d 652, 656 
(Va. 1995) (emphasis in original); see also Grimes v. Donald, 1995 WL 54441 (Del. 
Ch.), 20 Del. 
J. Corp. L. 757, 771, (Del. Ch. 1995), affirmed 673 A.2d 1207 (Del. 1996). 
 The business judgment rule is 
widely recognized:  Michaud v. Morris, 603 So. 2d 886 (Ala. 
1992); Shields v. Cape Fox 
Corporation, 42 P.3d 1083 (Alaska 2002); Long v. Lampton, 922 S.W.2d 692 (Ark. 
1996); Lamden v. La Jolla Shores 
Clubdominium Homeowners Association, 980 P.2d 940 (Cal. 1999); Hirsch v. Jones Intercable, Inc., 984 P.2d 629 (Colo. 1999); Rosenfield v. 
Metals Selling Corporation, 643 A.2d 1253 (Conn. 1994); McMullin v. Beran, 765 A.2d 910 (Del. 
2000); Leppaluoto v. Warm Springs Hollow 
Homeowners Association, Inc. 752 P.2d 605 (Idaho 1988); G&N Aircraft, 
Inc. v. Boehm, 743 N.E.2d 227 (Ind. 2001); Whalen v. Connelly, 593 N.W.2d 147 (Iowa 
1999); Burcham v. Unison Bancorp, 
Inc., 77 P.3d 130 (Kan. 2003); Security Trust Company v. Dabney, 372 S.W.2d 401 (Ky. 1963); Salley v. 
Salley, 661 So. 2d 437 (La. 1995); Rosenthal v. Rosenthal, 543 A.2d 348 
(Me. 1988); Werbowsky v. Collomb, 766 A.2d 123 (Md. 2001); Harhen v. Brown, 
730 N.E.2d 859 (Mass. 2000); Janssen v. 
Best & Flanagan, 662 N.W.2d 876 (Minn. 2003); Omnibank of Mantee v. United Southern 
Bank, 607 So. 2d 76 (Miss. 1992); Daniels v. Thomas, Dean & Hoskins, 
Inc., 804 P.2d 359 (Mont. 1990); Sadler v. Jorad, Inc., 680 N.W.2d 165 
(Neb. 2004); In re PSE&G Shareholder 
Litigation, 801 A.2d 295 (N.J. 2002); White ex rel. Banes Company Derivative 
Action v. Banes Company, 866 P.2d 339 (N.M. 1993); 40 West 67th Street Corporation 
v. Pullman, 790 N.E.2d 1174 (N.Y. 2003); Riverside Park Condominiums Unit Owners 
Association v. Lucas, 691 N.W.2d 862 (N.D. 2005); Stepak v. Schey, 553 N.E.2d 1072 (Ohio 
1990); Warren v. Century Bankcorporation, 
Inc., 741 P.2d 846 (Okla. 1987); Cuker v. Mikalauskas, 692 A.2d 1042 (Pa. 
1997); Mueller v. Cedar Shore Resort, 
Inc., 643 N.W.2d 56 (S.D. 2002). 

 
 

[¶21]   The rule is applicable here.5  Whether a corporation should pursue a 
claim through litigation is a matter for the business judgment of the Board. 
 See Harhen, 730 N.E.2d at 865-66; and Cuker, 692 A.2d  at 1048.  The Board's decisions to enter into a 
settlement agreement with Crittenden was a business judgment.6  Appellants did not allege or establish 
any facts supporting a claim that the Board's actions were taken in bad faith or 
that any of the directors were not disinterested; they only complain that the 
Board's actions were "unreasonable."  Whether or not a particular action by a 
Board is "reasonable" is not for us to decide  that determination is vested in 
the discretion of the Board.  A 
court does "not apply an objective reasonableness test in such a case to examine 
the wisdom of the decision itself."  1 Block, Barton & Radin, supra, 
at 4-5; 
21-22; 25-27.  Certainly, the 
Board's decisions here can be "attributed to any rational business purpose" as 
the Board's own staff recommended in both Zimmer and Crittenden's cases to 
settle the matters because pursuing collection was not worth the cost of 
litigation.  Appellants have not 
alleged facts sufficient to rebut the presumption of the business judgment rule 
that the Board's decisions were taken in good faith with the intent of serving 
the best interests of the corporation.  We will not interfere with business 
decisions made by directors in good faith in what the directors believe to be in 
the organization's best interest.  The district court's summary judgments on 
the claims against Zimmer, Crittenden, and the Association's Board are 
affirmed.

 
 

Ultra 
vires claim against Zimmer & Crittenden

 
 
[¶22]   The Association's bylaws provide 
that:

 
 

Subordinate 
Officers.  The 
Board of Directors may appoint and engage under personal service contracts a 
General Manager and Assistant Manager, and such other officers as the business 
of the Association may require, each of whom shall hold office for such period, 
have such authority and perform such duties as are provided in these By-laws and 
their personal service contracts, or as the Board of Directors may from time to 
time determine. Such officers may not be members of the Board of 
Directors.

 
 
By-laws 
of Star Valley Ranch Association, Article IX Section 3.  The Association's Personnel Policies and 
Procedures also state that: "Because of the need for stability and continuity, 
the positions of General Manager and Assistant General Manager are further 
defined and filled through personal service contracts, while other positions are 
computed on a monthly or hourly basis."  The parties agree that neither Zimmer nor 
Crittenden had a personal services contract during their tenures as general 
manager.  In their complaint, 
Appellants alleged that the lack of a personal services contract rendered Zimmer 
and Crittenden's employment "ultra vires."  
Specific to Crittenden, Appellants allege that his employment was also 
ultra vires because the Association let him fulfill the duties of general 
manager while Crittenden remained a director of the Board when they created a 
"business agent" position in order to circumvent Association bylaws prohibiting 
a director from serving as general manager.  Appellants seek restitution from Zimmer 
and Crittenden for the salaries paid to them while they served as general 
manager (or as business agent) on the grounds that they knew, or should have 
known, the provisions of the bylaws requiring a personal services contract for 
that position.  The district court 
granted summary judgment without explanation of its 
reasoning.

 
 
[¶23]   A simple review of our statutes 
shows that Appellants' claim is utterly devoid of merit.  With respect to claims of ultra vires, 
the Wyoming Nonprofit Corporation Act provides:

 
 
                        
Ultra 
vires.

(a)    
Except 
as provided in subsection (b) of this section, the validity of corporate action 
may not be challenged on the ground that the corporation lacks or lacked power 
to act.

(b)    
A 
corporation's power to act may be challenged in a proceeding against the 
corporation to enjoin an act where a third party has not acquired rights.  The proceeding may be brought by the 
attorney general, a director or by a member or members in a derivative 
proceeding.

(c)    
A 
corporation's power to act may be challenged in a proceeding against an 
incumbent or former director, officer, employee or agent of the corporation. 
 The proceeding may be brought by a 
director, the corporation, directly, derivatively, or through a receiver, a 
trustee or other legal representative, or in the case of a public benefit 
corporation, by the attorney general.

 
 

Wyo. Stat. 
Ann. § 17-19-304 (LexisNexis 2005).  Since the exception in subsection (b) is 
plainly not applicable as this is not an action to enjoin any corporate act, 
Appellants' claims are clearly barred under subsection (a) of the statute.  Zimmer and Crittenden have completed 
their service as general manager: 

 
 
When an 
ultra vires contract has been fully performed on both sides, neither party can 
maintain an action to set aside the transaction or to recover what has been 
parted with.  In other words, 
neither a court of law nor a court of equity will interfere to deprive either 
the corporation or the other party of money or other property acquired under the 
contract.  The reason for the rule, 
which is well settled, is that the attempted contract, being void, is 
disregarded, and in its place a quasi-contractual obligation to do justice is 
enforced.  Ultra vires will not 
justify the reopening of a completely executed transaction.  Stated differently, if an ultra vires 
contract is fully executed on both sides, it cannot be attacked or set aside 
either by the corporation or by the other party to the contract, and the fact 
that the contract is ultra vires cannot be collaterally urged by a third person 
not a party to the contract.

 
 
7A 
Fletcher Cyclopedia Corporations § 3497 (1997).

 
 
[¶24]   Appellants did not cite or discuss 
Wyo. Stat. Ann. § 17-19-304 in their argument on this issue.  The egregiousness of this failure is 
compounded by the fact that Appellants were obviously aware of the statute 
because they cite it in support of an argument on another issue.  Appellants' argument is not only not 
cogent, it is frivolous, and we can only conclude that the claim was pursued in 
bad faith.  The summary judgment is 
affirmed.

 
 
Fraud, 
negligent misrepresentation and conflict of interest claims against Cox and Cox, 
Ohman & Brandstetter

 
 
[¶25]   Cox was elected to the Board in 
June of 1994.  The Association had a 
policy of reimbursing directors for expenses incurred while in the performance 
of their duties.  The policy was 
encompassed within the Association's accounting procedures.  Cox used the resources of his law firm in 
performing his duties as a director.  He sought reimbursement for the expenses 
incurred by his law firm.  In a 
letter dated March 28, 1995, to the then general manager of the Association, 
Joseph Iwanski, Cox referenced an agreement for 
reimbursement:

 
 
This 
will confirm our understanding as to the reimbursement to be paid to this office 
and myself for Director costs and expenses incurred hereafter.  We understand that such Director costs 
and expenses will be reimbursed or paid to us by the Association as 
follows:

 
 

1.      
$.10 per 
page for photocopy cost (regular is $.20 per page);

2.      
$1.00 
per page for facsimiles sent;

3.      
Actual 
postage costs above the regular postal rate for first class 
letters;

4.      
Actual 
cost for long distant telephone charges plus 15% to cover bookkeeping, regular 
service and system maintenance/replacement costs;

5.      
Milage 
[sic] at the going rate allowed by the IRS for SVRA business travel other that 
[sic] to the ranch;

6.      
Airfare, 
if any, at cost.

 
 
If the 
above does not meet with your and the Associations [sic] understanding and 
approval, please advise immediately. Otherwise, we will hereafter rely on the 
foregoing.

 
 
The 
Association paid all invoices submitted by Cox and his firm for expense 
reimbursement.

 
 
[¶26]   Appellants demanded that the 
Association seek repayment of the monies paid to Cox and his law firm and when 
the Board refused, they filed this action.  Appellants alleged that Cox had engaged 
in a conflict of interest transaction without obtaining prior authorization of 
the Association in violation of Wyoming statute and the Association 
bylaws.  Appellants alleged that the 
Board's failure to obtain repayment breached its fiduciary duties to the 
Association and its members.  In 
separate claims against Cox, Appellants alleged that he engaged in fraud and/or 
negligent misrepresentation when he represented to the Board that Zimmer had 
settled the claim against him for overpayment of salary with a prior Board.  The district court granted Cox's motion 
for summary judgment finding that since "Cox was not doing business with the 
Association when he was incurring the expenses [rather] he was acting in 
furtherance of the Association's business in his capacity as a director," there 
was no conflict of interest transaction.  
The court also granted summary judgment on the fraud and negligent 
misrepresentation claims since the finding that Cox's billings were appropriate 
precluded them.

 
 
[¶27]   We can quickly dispense with the 
fraud and negligent misrepresentation claims.  Initially, however, we note that the 
district court erred in its reasoning for granting summary judgment.  Appellants' claims for fraud and 
misrepresentation had nothing to do with Cox's expense billings; rather, they 
concerned statements made by Cox to the Board with regard to Zimmer's claims for 
overtime.  Nevertheless, after 
reviewing the record, we conclude that summary judgment was appropriate.  As was the case with the claim of fraud 
against Zimmer, the record does not contain any evidence to support a claim of 
fraud against Cox.  Appellants offer 
only unsupported allegations regarding Cox's motivations for his statements to 
the Board.  In order to prove 
negligent misrepresentation, Appellants would have to show that "[o]ne who, in 
the course of his business, profession or employment, or in any other 
transaction in which he has a pecuniary interest, supplies false information for 
the guidance of others in their business transactions, is subject to liability 
for pecuniary loss caused to them by their justifiable reliance upon the 
information, if he fails to exercise reasonable care or competence in obtaining 
or communicating the information."  Richey v. Patrick, 904 P.2d 798, 802 
(Wyo. 1995), 
(quoting Restatement, Second, Torts § 552(1) (1977)).  We can locate no evidence in the record 
to support an allegation that Cox failed "to exercise reasonable care or 
competence in obtaining or communicating the information" regarding Zimmer's 
overtime claim to the Board.  Again, 
Appellants offer nothing but allegations in support of their claims.  The district court's summary judgment is 
affirmed.

 
 
[¶28]   Appellants contend that the 
reimbursement of expenses to Cox and the law firm constituted a conflict of 
interest transaction that required specific board approval.  They argue that there are material facts 
in dispute regarding whether there was an agreement between Cox and the Board 
for reimbursement of expenses and whether such was sufficient to satisfy the 
requirement of Board approval that should have precluded summary 
judgment.

 
 
[¶29]   We begin with the language of the 
statute governing director conflicts of interest under the Wyoming Nonprofit 
Corporation Act:

 
 
                                    
Director conflict of 
interest.

(a)      
A 
conflict of interest transaction is a transaction with the corporation in which 
a director of the corporation has a direct or indirect interest.  A conflict of interest transaction is not 
voidable if the transaction was fair at the time it was entered into or is 
approved as provided in subsection (b) or (c) of this 
section.

(b)      
A 
transaction in which a director of a public benefit or religious corporation has 
a conflict of interest may be approved:

(i)                 
In 
advance by the vote of the board of directors or a committee of the board 
if:

(A)     
The 
material facts of the transaction and the director's interest are disclosed or 
known to the board or committee of the board; and

(B)     
The 
directors approving the transaction in good faith reasonably believe that the 
transaction is fair to the corporation; or

(ii)               
Before 
or after it is consummated by obtaining approval of the:

(A)     
Attorney 
general; or

(B)     
District 
court in an action in which the attorney general is joined as a 
party.

(c)      
A 
transaction in which a director of a mutual benefit corporation has a conflict 
of interest may be approved if:

(i)                 
The 
material facts of the transaction and the director's interest were disclosed or 
known to the board of directors or a committee of the board and the board or 
committee of the board authorized, approved or ratified the transaction; 
or

(ii)               
The 
material facts of the transaction and the director's interest were disclosed or 
known to the members and they authorized, approved or ratified the 
transaction.

(d)      
For 
purposes of this section, a director of the corporation has an indirect interest 
in a transaction if:

(i)                 
Another 
entity in which the director has a material interest or in which the director is 
a general partner is a party to the transaction; or

(ii)               
Another 
entity of which the director is a director, officer or trustee is a party to the 
transaction.

(e)      
For 
purposes of subsections (b) and (c) of this section a conflict of interest 
transaction is authorized, approved or ratified, if it receives the affirmative 
vote of a majority of the directors on the board or on the committee, who have 
no direct or indirect interest in the transaction, but a transaction shall not 
be authorized, approved or ratified under this section by a single director. 
 If a majority of the directors on 
the board who have no direct or indirect interest in the transaction vote to 
authorize, approve or ratify the transaction, a quorum is present for the 
purpose of taking action under this section.  The presence of, or a vote cast by, a 
director with a direct or indirect interest in the transaction does not affect 
the validity of any action taken under paragraph (b)(i) or (c)(i) or this 
section if the transaction is otherwise approved as provided in subsection (b) 
or (c) of this section.

(f)        
For 
purposes of paragraph (c)(ii) of this section, a conflict of interest 
transaction is authorized, approved or ratified by the members if it receives a 
majority of the votes entitled to be counted under this subsection.  Votes cast by or voted under the control 
of a director who has a direct or indirect interest in the transaction, and 
votes cast by or voted under the control of an entity described in paragraph 
(d)(i) of this section, shall not be counted in a vote of members to determine 
whether to authorize, approve or ratify a conflict of interest transaction under 
paragraph (c)(ii) of this section.  The vote of these members, however, is 
counted in determining whether the transaction is approved under other sections 
of this act.  A majority of the 
voting power, whether or not present, that are entitled to be counted in a vote 
on the transaction under this subsection constitutes a quorum for the purpose of 
taking action under this section.

(g)      
The 
articles, bylaws or a resolution of the board may impose additional requirements 
on conflict of interest transactions.

 
 

Wyo. Stat. 
Ann. § 17-19-831 (LexisNexis 2005).  
"We endeavor to interpret statutes in accordance with the Legislature's 
intent.  We begin by making an 
"inquiry respecting the ordinary and obvious meaning of the words employed 
according to their arrangement and connection.'" [citation omitted]  We construe the statute as a whole, 
giving effect to every word, clause, and sentence, and we construe together all 
parts of the statute in pari materia."  In 
re Estate of Novakovich, 2004 WY 158, ¶13, 101 P.3d 931, 934 (Wyo. 2004) 
(quoting Wyodak Resources Development 
Corporation v. State Board of Equalization, 2001 WY 92, ¶7, 32 P.3d 1056, 
[1058] (Wyo. 2001) and Exxon Corporation 
v. Board of County Commissioners, 987 P.2d 158, 161-62 (Wyo. 
1999)).

 
 
[¶30]   This statute prevents a corporate 
director of a nonprofit corporation from engaging in activity with the 
corporation in which the director has a direct or indirect interest unless 
certain specific procedures are followed by the governing board.  The purpose of the statute, obviously, is 
to protect the corporation from potential unfair dealing by providing for review 
of conflict of interest transactions by disinterested board or committee 
members.  The Association's bylaws 
echo the statutory purpose:

 
 
No 
member of the Board of Directors or Officers or member of any committee of the 
Association shall directly or indirectly benefit financially from or possess an 
interest in any contract or transaction relating to the property, facilities, or 
operation of the Association, or the furnishing of supplies, equipment or 
services to the Association unless specifically authorized by the Board of 
Directors.

 
 
The 
threshold question then is whether the statute or bylaw is even applicable to 
this situation.  The district court 
concluded that it was not since Cox was not doing business with the Association; 
rather, Cox was incurring the expenses while furthering the Association's 
business in his capacity as a director.  We agree.

 
 
[¶31]   The phrase "conflict of interest 
transaction" is defined by the statute as "a transaction with the corporation in 
which a director of the corporation has a direct or indirect interest."  What constitutes a "transaction" is not 
defined by the statute or elsewhere in the Wyoming Nonprofit Corporation Act. 
 As previously noted, Wyoming's Nonprofit 
Corporation Act is based on the Revised Model Nonprofit Corporation Act.  While that Model Act and its official 
comments are silent on what comprises a "transaction," the drafters "decided to 
track the [Model Business Corporation Act] in form and substance wherever 
appropriate[.]"  Revised Model 
Nonprofit Corporation Act, Introduction at xx (1988).  The substantively similar conflict of 
interest provision found in the Model Business Corporation Act provides some 
guidance.  In the Introductory 
Comments to that Act a definition of what constitutes a "transaction" for 
conflict of interest analysis is found:

 
 
[T]he 
subchapter is applicable only when there is a "transaction" by or with the 
corporation.  For purposes of 
subchapter F, "transaction" generally connotes negotiations or a consensual 
bilateral arrangement between the corporation and another party or parties that 
concern their respective and differing economic rights or interests  not simply 
a unilateral action by the corporation but rather a 
"deal."

 
 
2 Model 
Business Corporation Act Annotated § 8.60, at 8-373 (3rd ed. 1998). 
 The official comment to the Model 
Act goes on to state:

 
 
To 
constitute a director's conflicting interest transaction, there must first be a 
transaction by the corporation, its subsidiary, or controlled entity in which 
the director has a financial interest.  As discussed earlier, the safe harbor 
provisions provided by subchapter F have no application to circumstances in 
which there is no "transaction" by the corporation, however apparent the 
director's conflicting interest.  Other strictures of law prohibit a 
director from seizing corporate opportunities for himself and from competing 
against the corporation of which he is a director; subchapter F has no 
application to such situations.  Moreover, a director might personally 
benefit if the corporation takes no action, as where the corporation decides not 
to make a bid.  Subchapter F has no 
application to such instances.  The 
limited thrust of the subchapter is to establish procedures which, if followed, 
immunize a corporate transaction and the interested director against the common 
law doctrine of voidability grounded on the director's conflicting 
interest.

 
 

Id. § 8.60, 
at 8-382-83 (1997 Supplement).  The 
Model Act's definition of "transaction" is consistent with the plain meaning of 
the word:

 
 

1.  The act or an instance of conducting 
business or other dealings.  2. Something performed or carried out; 
a business agreement or exchange.  
3.  Any activity involving two or more 
persons.  4.  Civil law.  An agreement that is intended by the 
parties to prevent or end a dispute and in which they make reciprocal 
concessions.

 
 
Black's 
Law Dictionary 1503 (7th ed. 1999).

 
 
[¶32]   There is no "transaction," as that 
term is used in the statute, in this case.  The reimbursement of a director's 
expenses incurred while in the performance of his or her duties is not the type 
of corporate action the statute was designed to cover.  There were no "negotiations or a 
consensual bilateral arrangement between the corporation and another party." 
 There is no "deal" or act or 
agreement here.  The Board made a 
decision to reimburse directors for the expenses they incurred while in the 
performance of their duties.  That 
is a policy choice.  Indeed, 
Appellants do not challenge the Board's authority to reimburse director 
expenses.  Appellant Mueller 
acknowledged in his deposition that the Association had a long-standing practice 
of reimbursement and that Cox would be entitled to reimbursement for any 
reasonable expenses.  Appellants' 
complaint is apparently predicated on the Board's decision to reimburse Cox and 
his law firm for overhead on telephone expenses.  Appellants fail to articulate why that 
action would render the reimbursements to Cox and the law firm a conflict of 
interest transaction under the statute.  The Board's decision was a policy choice 
within its discretion and authority, one that, as already noted, we will not 
disturb absent a showing of bad faith.  Appellants have sought to expand the 
reach of Wyo. Stat. Ann. § 17-19-831 far beyond the scope of its plain language 
and the purpose behind the statute.  The summary judgment on this claim is 
affirmed.

 
 

Declaratory 
judgment claim against the Association

 
 
[¶33]   On June 24, 1995, the Association's 
annual election of directors was held.  On the ballot was a proposed amendment to 
the bylaws to increase the number of directors from five to seven.  The Association bylaws provided that 
membership was appurtenant to the subdivision lots, with each lot entitled to 
one vote.  At the time of the 
election, there were 2,027 lots, or votes, in the Association.  The bylaws contained the following 
provisions relevant to amendments to change the number of 
directors:

 
 
Article 
VIII

Directors

            
            

Section 
2.  Number and Qualifications of 
Directors.  The Board of Directors shall consist of 
the number of Directors named in the Articles of Incorporation (5) until changed 
by amendment of the Articles, or by amendment to this Section 2 of these 
By-laws, fixing or changing such number, adopted by a majority of the voting 
power; but in no event shall there be less than three (3) Directors. All 
Directors shall be voting members in good standing of the 
Association.

 
 
***

 
 
Article 
XI

Amendments

 
 

Section 
1.  Powers of 
Members.  The By-laws of this Association may be 
adopted, amended, or repealed at a meeting duly called for said purpose by an 
affirmative vote of at least two thirds (2/3) majority of the voting powers of 
those present or by proxy.  The 
presence in person or by proxy of fifty percent (50) of all members authorized 
to vote shall constitute a quorum for the purpose of amending or repealing the 
By-laws.  Any proposed amendment or 
repeal as provided above shall be submitted in writing to each member of the 
Association thirty (30) days in advance of said meeting.

 
 

Section 
2.  Powers of 
Directors.  Subject to the right of the members to 
adopt, amend or repeal these By-laws, as provided in [the Powers of Members 
section above], at any special or regular meeting, the Board of Directors may 
adopt, amend, or repeal any of these By-laws other than a By-law or amendment 
thereof changing the authorized number of Directors.

 
 
There 
were 1,042 votes present in person or by proxy at the election meeting.  No official statement or record of the 
vote was released but the contemporaneous notes of director Cox reflected 753 
votes in favor and 126 opposed to the amendment.  The amendment went into effect in 1996 
and a seven-member board has served every year since.

 
 
[¶34]   Appellants filed a declaratory 
judgment action seeking to set aside the amendment to the bylaws.  The district court granted summary 
judgment, determining that since a quorum was present and the amendment received 
two-thirds of the votes present at the meeting, the amendment was effective 
under Article XI, Section 1, of the bylaws. 

 
 
[¶35]   Bylaws are contractual in nature. 
 Skane v. StarValley 
Ranch Association, 826 P.2d 266, 271 (Wyo. 1992).  Unsurprisingly, bylaws are interpreted 
according to the principles applicable to the interpretation of contracts.  Bloom v. National Collegiate Athletic 
Association, 93 P.3d 621, 625 (Colo.App. 2004); Singh v. Singh, 114 Cal. App. 4th 1264, 1293-94, 9 Cal. Rptr. 3d 4 (Cal. App. 2004); Dawkins v. Walker, 794 So. 2d 333, 339 (Ala. 2001).  Our standard for interpreting contracts 
is well-established and straightforward:

 
 
In 
contract litigation, when the terms of the agreement are unambiguous, the 
interpretation is a question of law. Examination Management Services, Inc. v. 
Kirschbaum, 927 P.2d 686, 689 (Wyo. 1996); 
Union Pacific Resources Co. v. Texaco, 
Inc., 882 P.2d 212, 218-19 (Wyo. 1994).  Whether a contract is ambiguous is a 
question of law for the reviewing court.  Prudential Preferred Properties v. J and J 
Ventures, Inc., 859 P.2d 1267, 1271 (Wyo. 1993).  We review questions of law de novo 
without affording deference to the decision of the district court.  Hermreck v. United Parcel Services, 
Inc., 938 P.2d 863, 866 (Wyo. 1997); Griess v. Office of the Atty. Gen., Div. of 
Criminal Investigation, 932 P.2d 734, 736 (Wyo. 1997).

 
 
            
According to our established standards for interpretation of contracts, 
the words used in the contract are afforded the plain meaning that a reasonable 
person would give them.  Doctors' Co. v. Insurance Corp. of 
America, 864 P.2d 1018, 
1023 (Wyo. 
1993).  When the provisions in the 
contract are clear and unambiguous, the court looks only to the "four corners" 
of the document in arriving at the intent of the parties.  Union Pacific Resources Co., 882 P.2d  at 
220; Prudential Preferred Properties, 
859 P.2d  at 1271.  In the absence of 
any ambiguity, the contract will be enforced according to its terms because no 
construction is appropriate.  Sinclair Oil Corp. v. Republic Ins. Co., 
929 P.2d 535, 539 (Wyo. 1996); Prudential Preferred Properties, 859 P.2d  at 1271.

 
 

Roney v. 
B.B.C. Corporation, 2004 
WY 113, ¶10, 98 P.3d 196, 200 (Wyo. 2004) (quoting Amoco Prod. Co. v. EM Nominee Partnership Co., 2 P.3d 534, 540 
(Wyo. 2000) and Double Eagle Petroleum 
& Min. Corp. v. Questar Exploration & Prod. Co., 2003 WY 139, ¶ 7, 78 P.3d 679, [681] (Wyo. 
2003)).

 
 
[¶36]   The parties advance two alternative 
interpretations of the Association's bylaws.  Appellants interpret the phrase "voting 
power" in Article VIII, Section 2, to require a different approval procedure for 
amendments concerning the number of directors than that set out in the general 
provision for amending bylaws in Article XI, Section 1.  They point out that the phrase is defined 
in Wyoming's Nonprofit Corporation Act to mean "the total number of votes 
entitled to be cast for the election of directors at the time the determination 
of voting power is made[.]" Wyo. Stat. Ann. § 17-19-140(a)(xxxvi) (LexisNexis 
2005).  Appellants read Article 
VIII, Section 2, to require a majority vote of all eligible voters in the 
Association to amend the bylaw and change the number of directors.  Accordingly, they conclude that 1,014 
votes out of the 2,027 total were necessary to pass the amendment and since it 
received only 753 votes, it failed.

 
 
[¶37]   The Association argues, and the 
district court agreed, that an amendment to change the number of directors 
needs, if a quorum is present, two-thirds of the majority of the votes present 
at the election meeting as set forth in Article XI, Section 1, of the bylaws. 
 The Association interprets the 
phrase "voting power" appearing in Article VIII, Section 2, to refer to the 
total number of votes entitled to be cast in an election of directors at the 
time of voting.  After noting that 
Wyo. Stat. Ann. § 17-19-707(b)7 grants nonprofit corporations broad 
discretion in defining in their bylaws the members entitled to vote, the 
Association concludes that Article XI, Section 1, defines those members who are 
entitled to vote as those who are present in person or by proxy at the election. 
 Accordingly, the Association 
concludes that the amendment was passed pursuant to the bylaws as more than 
two-thirds of the votes present were in favor.

 
 
[¶38]   We agree with the Association. 
 The Model Business Corporation Act 
further defines "voting power" to mean " the current power to vote in the 
election of directors.  Application 
of this definition turns on whether the relevant shares carry the power to vote 
in the election of directors as of the time for voting on the relevant 
transaction."  1 Model 
Business Corporation Act Annotated § 1.40 at 1-87 (emphasis added) 
(3rd ed. 1998 2000/01/02 Supplement).  The Association is given the discretion 
by statute to determine "the members entitled to vote at a members' meeting." 
 Article XI, Section 1, 
unambiguously states that the "voting power" consists of those members "present 
or by proxy."  Members who do not 
appear or provide a proxy are not eligible to vote in the Association's 
elections to amend bylaws.  Appellants' interpretation circumvents 
the bylaw requirements for voter eligibility by giving a vote  which will 
always be a "no" vote  to every lot owner who fails to appear at the meeting. 
 Appellants' position would make it 
virtually impossible to amend the bylaw, and it effectively deprives the members 
who complied with bylaw requirements and appeared at the meeting in person or by 
proxy of their vote.  We agree with 
the district court that the Association's interpretation of the bylaws is the 
correct one.

 
 
[¶39]   In granting summary judgment, the 
district court declined to consider an affidavit proffered by Appellants from a 
member of the Association who claimed to have been present during the vote and 
count.  Sara Kittleson averred that 
the results of the election were posted on a chalkboard and showed that the 
amendment only received 653 votes.  Attached to the affidavit was a 
handwritten note made at the time by Kittleson reflecting what was written on 
the chalkboard.  Since 653 votes do 
not constitute a two-thirds majority of the votes present, Appellants contend 
that this was evidence that the amendment did not pass.  The district court rejected the proffered 
affidavit concluding that it was hearsay and unreliable.  Appellants contend that the district 
court's conclusion was in error.

 
 
[¶40]   The determination of admissibility 
of evidence is vested in the district court's discretion.  Armstrong v. Hrabal, 2004 WY 39, ¶10, 87 P.3d 1226, 1230 (Wyo. 2004). After a movant has adequately supported a motion 
for summary judgment, the opposing party must come forward with competent 
evidence admissible at trial showing that there are genuine issues of material 
fact.  Jones v. Schabron, 2005 WY 65, ¶9, 113 P.3d 34, 37 (Wyo. 2005).

 
 
[¶41]   Hearsay, of course, "is a 
statement, other than one made by the declarant while testifying at the trial or 
hearing, offered in evidence to prove the truth of the matter asserted."  W.R.E. 801(c) (LexisNexis 2005).  A "statement" is "an oral or written 
assertion or  nonverbal conduct of a person, if it is intended by him as an 
assertion." W.R.E. 801(a).  Appellants assert that Kittleson's 
affidavit was not hearsay.  It was 
"what she saw."  Appellants do not 
support their argument with any analysis or citation to legal authority.  We conclude that the district court was 
correct and that Kittleson's affidavit is hearsay.  Kittleson's affidavit (and attached note) 
describes a writing produced by another person, and it is being offered for the 
truth of the matter asserted therein (i.e., that there were, in fact, a certain 
number of votes).  There is no 
evidence that Kittleson has any personal knowledge of the facts set forth on the 
chalkboard.  It is basic evidence 
law that "[a]ny writing, other than one made by a witness during the witness's 
testimony in court, is hearsay if offered to prove the truth of what is 
written." David F. Binder, Hearsay Handbook § 1:4 (4th ed. 2001); see, e.g., Odegard v. Odegard, 2003 WY 67, ¶14-15, 
69 P.3d 917, 922-23 (Wyo. 2003) (letter is hearsay); Canyon View Ranch v. Basin Electric Power 
Corporation, 628 P.2d 530, 537 (Wyo. 1981) (facts in magazine article 
without any evidence to establish their truth or credibility are hearsay); and 
City of Cheyenne v. Frangos, 487 P.2d 804, 807 (Wyo. 1971) (newspaper article is hearsay).  Given that Appellants have not made an 
argument that any of the exceptions to the hearsay rule apply, or otherwise 
present us a cogent argument, we need not consider this claim any 
further.

 
 
[¶42]   Finally, Appellants contend that 
the amendment is void because of the Association's failure to maintain a record 
of the vote in its minutes or permanent records and to record the amendment in 
the bylaws.  The Association's 
bylaws state that:

 
 

Section 
3.  Record of Amendments.  Whenever 
an amendment or new By-law is adopted, it shall be placed in the book of By-laws 
in the appropriate place.  If any 
By-law is repealed, the fact of repeal, with the date of the meeting at which 
the repeal was enacted or written assent was filed, shall be stated in said 
book.

 
 
By-Laws 
of StarValley Ranch Association, 
Article XI, Section 3.  The copy of 
the bylaws we have in the record contains a footnote in Article VIII, Section 2, 
that governs the number of directors indicating that the bylaw was amended on 
June 24, 1995.  That date, of 
course, is when the subject disputed election was held.  Appellants do not mention this fact in 
their brief.  Without a cogent 
argument as to why this reference is not sufficient notice of the amendment 
under the Association's bylaws, we will not consider the matter 
further.

 
 
[¶43]   Appellants' argument that the 
Association's failure to maintain a record of the election renders the amendment 
void is predicated on Wyo. Stat. Ann. § 17-19-1601(a) (LexisNexis 2005), which 
provides:

 
 
A 
corporation shall keep as permanent records minutes of all meetings of its 
members and board of directors, a record of all actions taken by the members or 
directors without a meeting, and a record of all actions taken by committees of 
the board of directors as authorized by W.S. 17-19-825(d).

 
 
Appellants 
contend that the failure of a corporation to maintain proper records as mandated 
by statute "affects the validity of the action" taken.  There is no dispute that there is no 
official record of the vote on the amendment in the Association's records.  However, Appellants fail to cite any 
legal authority for the proposition that such failure automatically renders the 
action invalid.  There is authority 
that suggests this is not so. See Swain v. Wiley College, 74 S.W.3d 143, 
147 (Tex. App. 2002) ("The failure of a corporation to record the actions of its 
directors in corporate minutes, as required by its bylaws and the Texas 
Non Profit Corporation Act, does not render the action invalid."); and Wimbledon Townhouse Condominium I, 
Association, Inc. v. Wolfson, 510 So. 2d 1106, 1108-09 (Fla.App.4 Dist. 1987) 
("Failure of the board of directors of a corporation to record their action will 
not affect the validity of the acts done by them.") (quoting Redstone v. Redstone Lumber & Supply 
Co., 133 So. 882, 883-84 (Fla. 1931)).  When a corporation's minutes do not fully 
reflect an action taken by a corporation, parol evidence may be admissible to 
establish what transpired:

 
 
Where 
the minutes contain a record of action taken, it will be presumed, prima facie, 
that the record covers the entire action.  This is not conclusive, however, and 
parol evidence may be introduced to show what was in fact done.  If the minutes appear on their face or 
are shown to be incomplete or incorrect or otherwise fail to show what actually 
transpired, parol evidence is admissible to supply the omission and to aid, 
correct and supplement them, or to aid in ascertaining the true meaning of 
indefinite or ambiguous records.  Thus, where the corporate minutes are 
incomplete but are sufficient to show that the shareholders and directors 
present at a meeting did enter into an agreement, the courts may resort to 
evidence of extrinsic facts and circumstances to determine the full intent of 
the agreement if any ambiguity arises.

 
 
5A 
Fletcher Cyclopedia Corporations § 2198 at 178-80 (2004).  Here, there is evidence that the 
amendment passed on a vote of 753 to 126 in director Cox's contemporaneous, 
handwritten notes.  Once again, 
Appellants fail to provide any legal analysis or cite any authority for their 
argument.  Therefore, we decline to 
consider their claim.  The district 
court's summary judgment on the declaratory judgment is 
affirmed.

 
 
Attorney 
Fees

 
 
[¶44]   In the event that the trial court's 
summary judgment was affirmed in their favor, Cox and the Association request 
that we remand to the district court for the determination of attorney fees, 
costs, and expenses pursuant to Wyo. Stat. Ann. § 17-19-630(d) (LexisNexis 2005) 
relating to derivative suits:

 
 
On 
termination of the proceeding the court may require the complainants to pay any 
defendant's reasonable expenses, including counsel fees, incurred in defending 
the suit if it finds that the proceeding was commenced frivolously or in bad 
faith.

 
 
Appellants' 
argument has been characterized by the failure to provide evidence in support of 
their allegations and by the repeated presentation of contentions that are not 
cogent or supported by citation to any relevant legal authority.  We specifically have found that 
Appellants' claim that the employments of Zimmer and Crittenden were ultra vires 
was frivolous and brought in bad faith considering their failure to cite the 
relevant statutory provision.  Accordingly, we will require Appellants 
to pay all of the defendants' reasonable expenses, including counsel fees 
incurred in defending that particular claim.8  While tempted to award fees and costs for 
the other derivative claims brought by Appellants, we decline to do so after 
careful consideration of the matter.  We remand this matter to the district 
court for a determination of those fees and costs.

 
 
CONCLUSION

 
 
[¶45]   The district court's summary 
judgments on Appellants' derivative and declaratory judgment claims are 
affirmed.  The cases are remanded to 
the district court for a determination of costs and fees owed to defendants by 
Appellants for their frivolous and bad faith claims in their derivative 
action.

 
 

FOOTNOTES

  1Wyo. Stat. Ann. § 
17-19-630 (LexisNexis 2005) provides:

 
 
            
(a)  A proceeding may be brought in the right of a domestic or 
foreign corporation to procure a judgment in its favor 
by:

(i)  Any member or members having five percent (5%) or more of 
the voting power or by fifty (50) members, whichever is less; 
or

                        
(ii) Any director.

            
(b)  In any proceeding under this section, each complainant 
shall be a member or director at the time of bringing the 
proceeding.

            
(c)  A complaint in a proceeding brought in the right of a 
corporation shall be verified and allege with particularity the demand made, if 
any, to obtain action by the directors and either why the complainants could not 
obtain the action or why they did not make the demand. If a demand for action 
was made and the corporation's investigation of the demand is in progress when 
the proceeding is filed, the court may stay the suit until the investigation is 
completed.

            
(d)  On termination of the proceeding the court may require the 
complainants to pay any defendant's reasonable expenses, including counsel fees, 
incurred in defending the suit if it finds that the proceeding was commenced 
frivolously or in bad faith.

            
(e)  If the proceeding on behalf of the corporation results in 
the corporation taking some action requested by the complainants or otherwise 
was successful, in whole or in part, or if anything was received by the 
complainants as the result of a judgment, compromise or settlement of an action 
or claim, the court may award the complainants reasonable expenses, including 
counsel fees.

            
(f)  The complainants shall notify the secretary of state 
within ten (10) days after commencing any proceeding under this section if the 
proceeding involves a public benefit corporation or assets held in charitable 
trust by a mutual benefit corporation. The secretary of state shall then notify 
the attorney general.

 
 
  2In his brief, 
Cox's argument concerns only the summary judgment filed by him.  Since the issue ostensibly concerns the 
subject matter jurisdiction of this Court, and the motions for summary judgment 
filed by the other defendants are in the same procedural posture as that filed 
by Cox, our discussion encompasses all of the 
motions.

 
 
  3There are two 
exceptions to this rule:  when the 
district court grants one party's motion for summary judgment while denying the 
opposing party's summary judgment motion and the decision completely resolves 
the case, and when there is a denial of a summary judgment motion on the issue 
of qualified immunity.  McLean, 34 P.3d at 1267-68; see also Lieberman v. Wyoming.com LLC, 11 P.3d 353, 356 (Wyo. 2000) (denial of cross-motion for summary judgment); and Lawson v. Garcia, 912 P.2d 1136, 1138 
(Wyo. 1996) 
(qualified immunity).  Neither 
exception is applicable here.

 
 
  4Cox only argues 
the applicability of Paxton and does 
not raise any argument regarding the district court's authority to sua sponte reconsider a previously 
denied motion for summary judgment.  Accordingly, we will not make that 
determination today but note that what little authority that appears to exist on 
this point indicates that trial courts do possess such authority as part of 
their inherent powers.  See Schachter v. Citigroup, Inc., 126 
Ca.App.4th 726, 23 Cal. Rptr. 3d 920 (2005) (courts have such authority within limits 
established by California statute); and Chubb Group of Insurance Companies v. 
Guyuron, 1995 Ohio App. Lexis 5512.

 
 
  5The Wyoming Nonprofit 
Corporation Act is "based upon the Revised Model Nonprofit Corporation 
Act."  The official comments to the 
Revised Model Nonprofit Corporation Act (the Model Act) state that the 
application of the business judgment rule is "consistent" with the standards of 
conduct established for directors and that "in the nonprofit context the 
business judgment rule should apply to discretionary matters voted upon by the 
board of directors[.]"  Revised 
Model Nonprofit Corporation Act, § 8.30 at 216 
(1988).

 
 
  6This analysis is 
equally applicable to the Board's decision to enter into the release with 
Zimmer.

 
 
  7The statute 
provides:

 
 
§ 
17-19-707.  Record date; determining 
members entitled to notice and vote.

            
.

(b)  The bylaws of a corporation may fix or provide the manner 
of fixing a date as the record date for determining the members entitled to vote 
at a members' meeting.  If the 
bylaws do not fix or provide for fixing a record date, the board may fix a 
future date as the record date.  If 
no record date is fixed, members on the date of the meeting who are otherwise 
eligible to vote are entitled to vote at the 
meeting.

 
 
  8Since we are 
imposing these fees and costs under the derivative statute, any costs or fees 
incurred by the defendants in defending the declaratory judgment action are not 
recoverable.