IN THE SUPREME COURT, STATE OF WYOMING

20 1 3 WY 19

OCTOBER TERM, A.D. 20 1 2

February 14, 2013

SHIRLEY R. CASE, an individual,

Appellant (Plaintiff),

v.

S I N K & R I S E

, I

N C

. , a W y o m i n g

c o r p o r a t i o n ; C A L E C A S E

, a

n i n d i v i d u a l ; G U I O N a n d D A R L A N I G H T I N G A L E

, i n d i v i d u a l s ; a n d T A

N G E M A N N

B E N E D I C T C O R P

. , a W

y o m i n g corporation.

Appellees (Defendants). S

- 12

- 0111

Appeal from the District Court of Fremont County

The Honorable Wade E. Waldrip , Judge

Representing Appellant:

G lenn M. Ford, Wilson, W Y ; and Amy Wallace Potter, Jackson

, W Y . Argument by Mr. Ford.

R e presenting Appellee

s : J

. D e nny Moffett of Moffett & Associates, P.C., and Heather Noble, Jackson, W Y for Appellee Sink & Rise, Inc. Argument by Mr. Moffett.

S c o t t W. Meier, Lucas Buckley, and Marianne K. Sh anor of Hathaway & Kunz, P.C., Cheyenne, W

Y for Appellees Cale Case, Guion and Darla Nightingale, and Tangemann Benedict Corp. Argument by Mr. Meier.

B e f o r e K I T E

, C

. J

. , a n d H I L L

, V O I G T

, B U R K E

, a n d D A V I S

, J J

.N O T I C E : T h i s o p i n i o n is subject to formal revision before publication in Pacific Reporter Third.

R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e C l e r k o f t h e S u p r e m e C o u r t
, S u p r e m e C o u r t B u i l d i n g , C h e y e n n e , W

y o m i n g 8 2 0 0 2

, o f a n y t y p o g r a p h i c a l o r o t h e r f

o r m a l e r r o r s s o t h a t c o r r e c t i o n m a y b e

m a d e b e f o r e f i n a l p u b l i c a t i o n i n t h e p e r m a n e n t v o l

u m e

.1

H I L L

, J u s t i c e

.

[¶ 1 ] This case involves a dispute over corporate action during a shareholder meeting of Appellee Sink & Rise, Inc., (Sink & Rise) a Wyoming corporation. App ellee James Caleb Case (Cale Case) was the only shareholder present at the meeting. He concluded

that a quorum existed and thus voted on and passed several resolutions. Cale Case also elected himself and another shareholder as the directors of the corpor a t i o n
, a n d r e p l a c e d his estranged wife, Appellant Shirley Case, as the corporation’s secretary.

[¶ 2 ] Shirley Case took issue with her estranged husband’s actions during the

s hareholder meeting and filed a complaint in district court to set aside the corpo rate action that occurred at the shareholder meeting. After trial, the court held that joint stock held by Cale Case and Shirley Case

, as husband and wife as tenants by the entirety with rights of survivorship

, were “entitled to vote” during the sharehold er meeting and could thus be counted for quorum purposes, although they were not voted to pass the resolutions. Nevertheless, the district court concluded that the resolutions were passed with requisite authority and thus they were not set aside after tri al. This appeal followed.

I S S U E S

[¶ 3 ] Shirley Case presents two issues for our consideration:

1

. D i d t h e t r i a l c o u r t c o m m i t r e v e r s i b l e e r r o r i n f

i n d i n g t h a t

t h e t r a n s a c t i o n s c o n t e m

p l a t e d b y S i n k & R i s e S h a r e h o l d e r
R e s o l u t i o n s 1

, 2

, a n d 3 a n d B o a r d o f D i r e c t o r R e s o l u t i o n s
1

, 2

, a n d 3 w e r e n o t v

o i d a n d u l t r a v

i r e s a s d i r e c t o r s ’ conflicting interest transactions under W. S. § 1 7

- 16

- 860,

et. seq. ?

2

. D i d t h e t r i a l c o u r t c o m m i t r e v e r s i b l e e r r o r i n f

i n d i n g t h a t

t h e j o i n t l y h e l d s t o c k h e l d b y J a m e s C a l e b C a s e a n d

S h i r l e y C a s e c o u l d b e c o u n t e d f o r p u r p o s e s o f a q u o r

u m

o f s h a r e h o l d e r s i n t h e a b s e n c e o f e i t h e r p e r s o n a l

a t t e n d a n c e o r a p r o x

y f r o m b o t h o w

n e r s ?

F A C T S

[¶ 4 ] A May 24, 2011 shareholder meeting of Sink & Rise is central to this case. Sink

& Rise has 84 shar es of voting, common stock outstanding. There exists only one class of stock in the corporation, giving each stockholder the same voting rights. The stock ownership in Sink & Rise is as follows:

Cale Case

– 20 shares2 C a l e C a s e a n d S h i r l e y C a s e
, H u s b a n d a n d W i f e w i t h R i g

h t s of Survivorship

– 16 shares Clarene Law, Trustee, Clarene Law Revocable Trust (4/4/89)

– 16 s hares Creed Law, Trustee, Creed Law Revocable Trust (4/4/89)

– 16 s hares

G u i o n N i g h t i n g a l e

– 16 s h a r e s 1

[¶ 5 ] At the May 24, 2011 shareholder meeting, only Cale Case appeared in person. Appellee Guion Nightingale (Nightingale) appeared by proxy. No one else was present, either in person or by proxy. During the meeting, several resolutions were passed, including reauthorizing and securitizing debts, and electing Nightingale and Cale Case as the only members of the corporation’s b oard of d irectors. A b oard of d irectors meeting followed, where the board passed another resolution electing Cale Case as president of the corporation and replacing Sh irley Case as secretary. To pass these resolutions, Cale Case and Nightingale determined that a quorum existed by counting Cale Case’s 20 shares, Nightingale’s 16 shares, and the 16 shares held jointly by Cale Case and Shirley

Case as husband and wife.

[ ¶ 6 ] Shirley Case filed suit two weeks later on June 9, 2011 in district court. Her complaint contained three counts and challenged the validity of the decisions made at the

Sink & Rise shareholder meeting and the ensuing Sink & Rise board of directors

m ee ting. The complaint brought (Count I) derivative claims against Sink & Rise (Count II) a claim asking for declaratory judgment that the corporate actions taken at both the shareholder and board of directors meetings were done so in violation of Wyoming la w, and (Count III) a claim asking for injunctive relief. After filing an answer to the complaint, Sink & Rise filed a m otion for p artial s ummary j udgment seeking dismissal of

Counts I and III of the c omplaint. The remaining Appellees joined the motion, a nd on November 7, 2011, the district court granted it, dismissing the shareholder s ’ derivative claim in Count I and the claim for injunctive relief in Count III.

[¶ 7 ] Count II proceeded to a bench trial on November 15

- 16, 2011. The decision letter

of the court concluded that a quorum was reached at the shareholder meeting, that shares were not improperly voted, and that the decisions made at the shareholder meeting were

valid.

D I S C U S S I O N

1 The parties disagree about the status of the stock held by Appellee G u i o n N i g h t i n g a l e
, b u t t

h e i s s u e i s

n o t r a i s e d b y S h i r l e y C a s e

.3

[ ¶ 8 ] Shirley Case’s first issue on appeal alleges that the t rial c ourt committed reversible error when it found that the transactions contemplated by Sink & Rise Shareholder Resolutions 1, 2, and 3 and Board of Director Resolutions 1, 2, and 3 were not void, and ultra vires as directors’ conflicting interest transaction s under W yo . S tat

. Ann. § 1 7

- 16

- 860, et. seq. (LexisNexis 2011)

.

[¶ 9 ] The Appellees argue that only Count I of Shirley Case’s Verified Complaint sought relief on whether a directors’ conflict of interest transaction occurred under § 17

- 16

- 860, et. seq . N e i t h e r C o u n t I I ( a d e c l a r a t o r y j u d g m e n t c l a i m ) o r C o u n t I I I (a temporary restraining order/injunction claim) discussed directors’ conflicting interest transactions. The Appellees point out that Sink & Rise filed a m otion for partial summary judgment reque sting Counts I and II I be dismissed, and that Shirley Case did not respond. As a result, on November 7, 2011

, the court entered an Order Granting Motion for Summary Judgment and Dismissing Counts I and III of Plaintiff’s Complaint

w ith Prejudice , and stat ed:

T h e C o u r t f

i n d s t h a t t h e P l a i n

t i f f h a s f a i l e d t o f i l e a response or otherwise controvert the assertions in the

D efendants’ Motion and Joinder by the October 13[sic], 2011 deadline which was set forth in the Court’s July 18, 2011, Scheduling Order and Order Setting Trial

. The Court further finds that Plaintiff has not moved for or otherwise requested an enlargement of time within which to file a response. Accordingly, the Court, having reviewed the Motion and the Joinder, and being duly advised in the premises, finds that the

Motion and the Joinder are well taken and therefore

G R ANTS the same.

IT IS HEREBY ORDERED that Count I and Count III of Plaintiff’s Verified Complaint are dismissed with prejudice

as to all Defendants herein.

T h e A p p e l l e e s a l s o e m

p h a s i z e t h e f

a c t t h a t t h e d i s t r i c t c o u r t d i s c u s s e d a n d r u l e d d i r e c t l y

o n t h i s v e r y i s s u e w

h e n i t r e f u s e d t o p e r m

i t e v i d e n c e a n d t e s t i m o n y r e g a r d i n g t h e c o n f

l i c t

o f i n t e r e s t d u r i n g t r i a l :

THE COURT:

... My point in making that point was that we are only ta

lking about the corporate authority for those resolutions. We are not talking about issues such as conflict

of interest or skullduggery by a corporate officer. Those, as to Count II, seem to be clearly irrelevant.

Y o u h a v e a s k e d f o r r e l i e f i n C o u n t I I t h a t t h e C o u r t

r u l e t h a t t h e r e s o l u

t i o n s w e r e n o t p a s s e d w i t h a u t h o r i t y , t h e4 r e s o l u t i o n s a r e v

o i d a n d u l t r a v

i r e s

. A n d C o u n t I I d e a l s s o l e l y

w i t h t h e i s s u e s o f w

h i c h s h a r e s o f s t o c k c a n b e v o t e d

.

MR. FORD: Well, that’s where my confusion comes in, Your

Hon or. If you look at the various facts we pleaded , we pleaded the specific facts that were conflicted, not just the

resolutions.

T H E C O U R T : I a g

r e e w i t h y o u

.

MR. FORD: And we have asked that the

– that the acts

themselves

– and I guess this is

– this is w ordsmithing and perhaps inappropriately

– or incomplete wordsmithing on our point

– but we are asking that the conflicted transactions would be ruled upon. But if, in fact, the resolutions were

v oted on by the directors who had direct conflicts, then that would get to the same point. It becomes circular at that point.

THE COURT: I don’t

– I guess I disagree with you, Mr. Ford.

M R

. F O R D : I g e t t h a t

.

THE COURT: I’m looking at Count II, Declaratory Judgment

– Unauthorized Corporate Actions. I am looking at paragraphs 25 through 32 and they deal only with voting of specific shares of stock and the issue of quorum.

N e x t

, I l o o k a t t h e N o v

e m b e r 7

, 2 0 1 1

, O r d e r g

r a n t i n g

s u m m a r y j u d g m e n t a n d d i s m i s s i n g C o u n t s I a n d I I I

. A n d I

t h i n k t h a

t c l e a r l y , i n m

y m i n d

, p r e c l u d e s y o u f r o m i n t r o d u c i n g e v i d e n c e t o t h i s C o u r t c o n c e r n i n g i s s u e s o f conflict of interest. And I think those are now irrelevant, and I won’t allow them. I want you to understand the position of

the Court.

M R

. F O R D : O k a y

. I f I m i g h t j u s t p o i n t o u t t h a

t t h e f i r s t

p a r a g r a p h o f C o u n t 2 5 ( s i c ) i n c o r p o r a t e s a l l o f t h e

p r o c e e d i n g s

.

THE COURT: I understand that. But I’m not going to allow you to bootstrap a cause of action that got tossed out because you didn’t reply to summary judgment. And that is what happened on I and III.5 M R

. F O R D : W e l l

–

THE COURT: That is what it is. I’m stuck with it. So with that understanding, I assume if you need to make an opening, I will begin evidence and testimony.

Although Shirley Case contends that the trial court ’s Order on Summary Judgment did not address the conflicting interest issue and remains unresolved, her failure to respond to Appell ees ’ Motion for Partial Summary Judgment resulted in the lower court fully adjudicating Count I, which included her claims r elating to conflicting interest transactions, and thus prevented her resurrection of the issue at trial. We agree with this

conclusion.

[¶ 10 ] The Wyoming Rules of Civil Procedure grant district courts authority to set the timing for the filing of summary judgment motions and responses. W

. R

. C

. P

. 56(c) provides that “ [ u ] nless the court otherwise orders, the motion and any response and other papers relating thereto shall be served pursuant to Rule 6(c).” Here, the district court

issued its scheduling order that required all dispositive motions to be filed on or before October 3, 2011

, and all responses to be filed on or before October 14, 2011. Shirley Case never responded to the Motion for Partial Summary Judgment , precluding the district court from tryin g the conflicting interest issue alleged in Count I.

[¶ 11 ] This Court has noted the importance of parties’ compliance with the r ules of c ivil

p rocedure in the context of a party’s failure to timely respond to a m otion for s ummary j udgment: “Compliance wit h the r ules of c ivil p rocedure ‘is mandatory, not optional.’”

Sandstrom v. Sandstrom

, 884 P.2d 968, 970

- 971 (Wyo. 1994). Further, “ [ t ] he district court should not receive or consider untimely filed affidavits in summary judgment matters. To condone a pra ctice which permits parties to sim ply ignore the Wyoming

Rules of C ivil Procedure would defeat the purpose for the rules.” Weber v. McCoy

, 950

P.2d 548 , 553 (Wyo. 1997) (internal citation omitted).

[¶ 12 ] Given this discussion, given that the Motion for P artial Summary Judgment went unopposed, and given that the d istrict c ourt did not entertain argument on this issue, we conclude that the district court’s ruling s on the issues raised in Counts I and III were final, and stand.

J o i n t S t o c k a n d t h e Q u o r u m

[ ¶ 13 ] In her second and final issue, Shirley Case argues first that Cale Case was not entitled to vote the jointly held shares due to her absence and

, consequently, those same shares could not be counted for quorum purposes. According to Shirley Case, only

s h a r e s “ e n t i t l e d t o v

o t e ” a r e t o b e c o u n

t e d i n e s t a b l i s h i n g a q u o r u m

. C a l e C a s e6

m a i n t a i n s t h a t t h e d i s t r i c t c o u r t ’ s d e c i s i o n t h a t t h e s h a r e s c o u l d b e c o u n t e d f o r q u o r u m

p u r p o s e s i s v a l i d

.

S T A N D A R D O F R E V I E W

[¶ 14 ] We recently stated in Redland v. Redla nd

, 2012 WY 148, ¶ 48, 288 P.3d 1173, 1185 (Wyo. 2012) as follows:

F o l l o w i n g a b e n c h t r i a l

, t h i s c o u r t r e v

i e w s a d i s t r i c t

court ’ s findings and conclusions using a clearly erroneous

s t a n d a r d f

o r t h e f a c t u a l f i n d i n g s a n d a d e n o v o s t a n d a r d f o r

t h e c o n c l u s i o n s o f l a w

. P i r o s c h a k v

. W h e l a n , 2005 WY 26, ¶ 7

, 1 0 6 P

. 3 d 8 8 7

, 8 9 0 ( W y o

. 2 0 0 5 )

. T h e f a c t u a l f i n d i n g s o f a j u d g

e a r e n o t e

n t i t l e d t o t h e l i m i t e d r e v

i e w a f f o r d e d a j u r y v

e r d i c t

. W

h i l e t h e f i n d i n g s a r e p r e s u m

p t i v e l y c o r r e c t

, t h e a p p e l l a t e c o u r t

m a y e x a m i n e a l l o f t h e p r o p e r l y a d m i s s i b l e e v i d e n c e i n

t h e r e c o r d

. D u e r e g

a r d i s g i v e n t o t h e o p p o r t u n i t y o f t h e

t r i a l j u d g e t o a s s e s s t h e c r e d i b i l i t y o f t h e w i t n e s s e s
, a n d

o u r r e v i e w d o e s n o t e

n t a i l r e

- w e i g

h i n g d i s p u t e d

e v i d e n c e

. F i n d i n g s o f f

a c t w i l l n o t b e s e t a s i d e u n l e s s

t h e y a r e c l e a r l y e r r o n e o u s

. A f i n d i n g i s c l e a r l y e r r o n e o u s

w h e n
, a l t h o u g

h t h e r e i s e v

i d e n c e t o s u

p p o r t i t

, t h e

r e v i e w i n g c o u r t o n t h e e n

t i r e e v i d e n c e i s l e f

t w i t h t h e d e f i n i t e a n d f

i r m c o n v i c t i o n t h a

t a m i s t a k e h a s b e e n

c o m m i t t e d

. Piroschak , ¶ 7, 1 06 P.3d at 890

. F i n d i n g s m a y n o t b e s e t

a s i d e b e c a u s e w e w o u l d h a v e r e a c h e d a d i f

f e r e n t r e s u l t

. Harber v. Jense[n] , 2004 WY 104, ¶ 7, 97 P.3d 57, 60 ( W y o

. 2 0 0 4 )

. F u r

t h e r
,

w e a s s u m e t h a t t h e e v

i d e n c e o f t h e p r e v

a i l i n g p a r t y b e l o w i s t r

u e a n d g i v e t h a t p a r t y e v

e r y r e a s o n a b l e i n f e r e n c e t h a t c a n f

a i r l y a n d r e a s o n a

b l y b e d r a w

n f r o m i t

. I d

. C l a m a n v

. P o

p p , 2012 WY 92, ¶ 22, 279 P.3d 1003, 1012 ( W y o

. 2 0 1 2 ) ( q

u o t i n g P e n n a n t S e

r v

. C o

. v

. T r u e O i l C o

. , LLC , 2011 WY 40, ¶ 7, 249 P.3d 698, 703 (Wyo. 2011)). We

r e v i e w the district court ’ s conclusions of law de novo.

Lieberman v. Mossbrook , 2009 WY 65, ¶ 4 0

, 2 0 8 P

. 3 d 1 2 9 6

, 1 3 0 8 ( W y o

. 2 0 0 9 )

.7

[ ¶ 1 5 ] Although Cale Case urges us to summarily affirm the district court because he alleges Shirley Case’s brief is not “presente d with cogent argument or supported by pertinent authority,” we will proceed to decide this case on the merits of the issue presented, having concluded that the briefs presented meet the standards required by this

Court.

[¶ 16 ] Turning to the issue, Shirle y Case argues that because her estranged husband was not entitled to vote the jointly held shares, those same shares could not be counted for quorum purposes. She reasons that because she was absent from the meeting and because only shares “entitled to vo te” are to be counted in establishing a quorum, the shares in question were essentially useless at the meeting.

[¶ 17 ] Although each party cites several secondary sources and other jurisdictions in support of their respective arguments, we find the answer in the Sink & Rise corporate documents, and within Wyoming law. First, we reiterate the characterization of the stock as being owned by husband and wife with rights of survivorship. We agree with the

district court’s further classification of the stock as creating a presumption of tenancy by the entirety under Wyoming law. Witzel v. Witzel

, 386 P.2d 103, 105 (Wyo. 1963) (the conveyance of property to husband and wife creates the presumption of a tenancy by the entirety)

. As tenants by the entirety, eac h owns an undivided 100% interest in the 16

shares.

I

n a n e s t a t e o f t h e e

n t i r e t y , t h e h

u s b a n d a n d t

h e w i f e d u r i n g

t h e i r j o i n t l i v

e s e a c h o w

n s
, n o t a p a r t

, o r a s e p a r a t e o r a

s e p a r a b l e i n

t e r e s t

, b u t t h e w h o l e
, a n d t h e r e f

o r e t h e d e a t

h o f

o n e l e a v e s t h e o t h e r s t i l l h o l d i n g t h e w

h o l e t i t l e a s b e f

o r e
,

w i t h n o o n e t o s h a r e i t

.

T a l b o t v

. U n i t e d S t a t e s b y & T h r o u g h S e c r e t a r

y o f t h e T r e a s u r y , 8 5 0 F

. S u

p p

. 9 6 9

, 9 7 5 ( D

. W y o

. 1 9 9 4 )

.

[¶ 18 ] To further help us in our consideration, we turn to the corporate documents. W e first note that when considering corporate documents, it is well settled that “ [b]ylaws are contractual in nature. ” Mueller v. Zimmer , 2005 WY 156, ¶ 3 5

, 1 2 4 P

. 3 d 3 4 0

, 3 5 9 ( q u o t i n g Skane v. Star Valley Ranch Ass ’ n , 826 P.2d 266, 271 (Wyo. 1992))

.

“ U n s u r p r i s i n g l y , b y l a w s a r e i n t e r

p r e t e d a c c o r

d i n g t o t h e p r i n c i p l e s a p p l i c a b l e t o t h e i n t e r p r e t a t i o n o f contracts. ” Id. (citations omitted). Our standard for interpreting

c o n t r a c t s i s w e l l

- e s t a b l i s h e d a n d s t r a i g h t f o r w a r d :

A c c o r d i n g t o o u r e s t a b l i s h e d s t a n d a r d s f o r i n t e r p r e t a t i o n o f c o n t r a c t s
, t

h e w o r d s u s e d i n t

h e c o n t r a c t a r e

a f f o r d e d t h e p l a i n m e a n i n g t h a t a r e a s o n a b l e p e r s o n w o u l d

g i v e t h e m

. Doctors ’ Co. v. Insurance Corp. of America , 8648 P

. 2 d 1 0 1 8

, 1 0 2 3 ( W

y o

. 1 9 9 3 )

. W

h e n t h e p r o v i s i o n s i n t h e

c o n t r a c t a r e c l e a r a n d u n a m b i g u o u s
, t h e c o u r t l o o k s o n l y t o the “ f our corners ” of the document in arriving at the intent of

t h e p a r t i e s

. U

n i o n P a c i f i c R e s o u r c e

s C o

. , 8 8 2 P

. 2 d a t 2 2 0 ;
P r u d e n t i a l P

r e f e r r e d P r o p e r t i e s , 8 5 9 P

. 2 d a t 1 2 7 1

. I

n t h e

a b s e n c e o f a n y a m

b i g u i t y , t h e c o n t r a c t w i l l b e e n f o r c e d

a c c o r d i n g t o i t s t e r m s b e c a u s e n o c o n s t r u c t i o n i s a p p r o p r i a t e

. S i n c l a i r O i l C

o r p

. v

. R e p u b l i c I n s

. C o

. , 9 2 9 P

. 2 d 5 3 5

, 5 3 9 ( W y o

. 1 9 9 6 ) ; P

r u d e n t i a l P r e f e r r e d P r o p e r t i e s , 8 5 9 P

. 2 d a

t

1 2 7 1

.

M u e l l e r , ¶ 35, 124 P.3d at 359

.

[¶ 19 ] With the above law in mind, we consider Sink & Rise’s bylaws , which define what constitutes a “quorum,” and relate the corporation’s rule on voting shares:

6

. Quorum. A m a

j o r i t y o f t h e o u t s t a

n d i n g s h a r e s e n t i t l e d t o

v o t e
, r e p r e s e n t e d i n p e r s o n o r b y p r o x y , s h a l l c o n s t i t u

t e a

q u o r u m a t a m e e t i n g o f S h a r e h o l d e r s

. I f a q u o r u m i s p r e s e n t

, t h e a f f i r m a t i v e v o t e o f t h e m a

j o r i t y o f s h a r e s e n t i t l e d t o v o t e

a t t h e m e e t i n g s h a l l b e t h e a c t o f t h e S h a r e h o l d e r s

. I f l e s s

t h a n a m a j o r i t y o f t h e o u

t s t a n d i n g s h a r e s a r e r e p r e s e n t e d a t a

m e e t i n g
, w

h i c h a q u o r

u m i s p r e s e n t e d o r r e p r e s e n t e d

, a n y b u s i n e s s m a y b e t r a n s a c t e d w h i c h m i g h t h a v e b e e n t r a n s a c t e d

a t t h e m e e t i n g a s o r i g i n a l l y c a l l e d

. T h e S h a r e h o l d e r s p r e s e n t

a t a d u l y o r g

a n i z e d m e e t i n g m a y c o n t i n u e t o t r a n s a c t b u s i n e s s

u n t i l a d j o u r n m e n t

, n o t w i t h s t a

n d i n g t h e w i t h d r a w a l o f e n o u g h

S h a r e h o l d e r s t o l e a v

e l e s s t h a n a q u o r

u m

.

7

. V o t i n g o f S h a r e s

. S u b j e c t t o t h e p r o v

i s i o n s o f 7 ( c ) h e r e o f

,

e a c h o u t s t a n d i n g s h a r e i s e n t i t l e d t o v o t e t h e n u m

b e r o f s h a r e s

o w n e d b y h i m

/ h e r o n e a c h m a t t e r s u b m i t t e d t o a v

o t e a t a

m e e t i n g o f S h a r e h o l d e r s

. ( a ) N e i t h e r t r e a s u r y s h a r e s
, n o r s h a r e s o f i t s o w n s t o c k

h e l d b y a c o r

p o r a t i o n i n a f

i d u c i a r y c a p a c i t y , n o r s h a r e s h e l d

b y a n o t h e r c o r

p o r a t i o n i f a m a

j o r i t y o f t h e s h a r e s e n

t i t l e d t o

v o t e f o r t h e e l e c t i o n o f s u c h o t h e r c o r p o r a t i o n i s h e l d b y t h e C o r p o r a t i o n
, s h a l l b e v o t e d a t a n y m e e t i n g o r c o u n t e d i n d e t e r m i n i n g t h e t o t a

l n u m b e r o f o u t s t a

n d i n g s h a r e s a t a n y

g i v e n t i m e

.9

A c c o r d i n g t o t h e b y l a w s
, f o r t h e c o r p o r a t i o n t o c o u n

t s h a r e s i n d e t e r m

i n i n g a q u o r

u m
, t h e

s h a r e s m u s t b e ( 1 ) e n t i t l e d t o v

o t e
, a n d ( 2 ) r e p r e s e n t e d i n p e r s o n o r b y p r o x y

. F r o m o u r

r e a d i n g o f t h e c o r

p o r a t e d o c u m e n t s
, a n d b e c a u s e t h e j o i n t s t o c k w a s h e l d b y h u s b a n d a n d

w i f e a s t e n a n t s b y t h e e

n t i r e t y , w e c o n c l u d e t

h a t the shares held jointly by Cale Case and Shirley Case were “entitled to vote” at the meeting. Cale Case represented the stock in person, as required by the bylaws.

[¶ 20 ] As the district court noted, and the parties agree here, the joint stock in question cannot be, and was not, voted without agreement between Cale Case and Shirley Case. “The stock itself is standard stock with full voting privileges. Whether the stock will be

voted at a m eeting does not control whether it is ‘ entitled to vote ’ at that meeting.” ( I talics in original

. ) “The fact that Cale Case and Shirley Case must agree on how to vote the stock before it can actually be voted does not strip it of its voting privileges.” C a le Case did not attempt to vote the stock at the meeting, but instead considered it only for quorum purposes because regardless of whether it was voted, its voting potential was still full. For the corporation to count shares in determining a quorum, the bylaws are silent regarding the shares actually being voted, as opposed to “entitled to vote.” The issue of whether stock held in a tenancy by the entirety can be voted by proxy without the signature of both owners is considerably different from, and does not control, the issue of whether that same stock is represented at a shareholder meeting through a single owner.

[¶ 21 ] Sink & Rise ’s bylaws do not prevent stock owned by a husband and wife as tenants by the entirety from being voted at a shareholder meeting if agreed upon , nor do the bylaws prevent the same kind of stock from being counted for purposes of a quorum if represented in person. The stock in question was represented in person by Cale Case at the May 24, 2011 shareholder meeting, and it wa s properly counted to establish a

quorum.

C O N C L U S I O N

[¶ 22 ] We affirm the d istrict c ourt’s decision holding that the 16 shares of stock co

owned by Cale Case and Shirley Case as husband and wife were “entitled to vote” pursuant to the bylaws of Sink & Ris e . The district court was correct in its characterization of Cale Case and Shirley Case holding the stock as tenants by the entirety. Because of the stock’s representation in person at the shareholder meeting, the stock could be counted for quorum purpos es. Consequently, the resolutions of the May 24, 2011 meeting were passed with requisite authority. Affirmed.