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304 Nebraska Report

IN RE STUEVEN CHARITABLE FOUNDATION

Cite as 304 Neb. 140

In re The Stueven Charitable Foun

a Nebraska nonprofit corpo

The Stueven Charitable Foundation and Kristy 

appellees, v. Delbert Stueven, by and thr

Shelley Stueven Mallory, his 

and Conservator, appella

___ N.W.2d ___

Filed September 27, 2019. No. S-18-1110.

1. Statutes: Appeal and Error. Statutory interpretation presents a question of law, which an appellate court reviews independently of the lower 

court’s determination.

Appeal from the District Court for Hall County: Teresa K

Luther, Judge. Vacated and remanded for further proceedings

Thomas A. Wagoner for appellant.

John Matson, James Tews, and Matthew Maser, of Koley 

Jessen, P.C., L.L.O., for appellees.

Cassel, Stacy, Funke, Papik, and Freudenber

Freudenberg, J

INTRODUCTION

The district court for Hall County granted the petition of 

The Stueven Charitable Foundation (Foundation) seeking the 

appointment of four members to its board of directors. Delbert 

Stueven (Delbert)—by and through his guardian and conservator, Shelley Stueven Mallory (Shelley)—appeals. We vacate the 

district court’s appointment of directors and remand the matter 

to the district court for further proceedings.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

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IN RE STUEVEN CHARITABLE FOUNDATION

Cite as 304 Neb. 140

BACKGROUND

Delbert and his wife incorporated the Foundation in 1990 

as a charitable nonprofit corporation. Delbert’s wife has since 

passed away. The current directors of the Foundation are 

Delbert, president; Kristy Cavanaugh, secretary; and Robert 

Burkhardt, treasurer (incorrectly referred to as “Bernhardt” 

in some pleadings). Delbert has since been found incompetent. His daughter, Shelley, was appointed as his guardian 

and conservator.

The Foundation and Cavanaugh filed a petition on 

September 18, 2018, seeking the appointment of additional 

directors. The Foundation’s amended petition alleged that 

the Foundation failed to make the required 2016 calendar 

year donation to a qualified charity and that another distribution was due before the end of 2018. The Foundation further 

alleged that Cavanaugh had attempted to contact Burkhardt for 

the purpose of holding a meeting of the board of directors, but 

was unable to reach him. The Foundation alleged that because 

of Delbert’s incapacity and Burkhardt’s failure to respond, 

the board lacked a quorum to take any actions. As such, the 

Foundation sought an order from the district court appointing 

two new directors.

Delbert, acting through Shelley, filed a motion on October 11, 

2018, seeking the dismissal of “the action of . . . Cav[a]naugh.” 

In that motion, Shelley objected to the appointment of further 

directors, arguing that there was no vacancy on the board.

On October 29, 2018, Cavanaugh, acting in her capacity as a 

director of the Foundation, retained separate counsel and filed 

an answer and a cross-complaint that contained allegations 

similar to those made by the Foundation and sought essentially 

the same relief as the Foundation, except that Cavanaugh asked 

for the appointment of four, not two, additional directors.

A hearing on this motion was held on October 30, 2018. 

There was no testimony at the hearing, and no evidence was 

offered. The articles of incorporation and certain amendments 

had been attached to the initial petition filed by the Foundation. 

And those same articles with some amendments, minutes from 
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IN RE STUEVEN CHARITABLE FOUNDATION

Cite as 304 Neb. 140

various board meetings, and the Foundation’s bylaws were 

attached to Cavanaugh’s answer and cross-complaint.

On November 2, 2018, the district court granted the 

Foundation’s petition in part and Cavanaugh’s petition in its 

entirety, appointing four new directors to the board. Shelley, 

acting as Delbert’s guardian and conservator, appeals.

ASSIGNMENTS OF ERROR

Shelley assigns that the district court erred (1) in appointing members to the board of directors and (2) in failing to find 

that Shelley could act as Delbert’s representative on the board 

of directors.

STANDARD OF REVIEW

[1] Statutory interpretation presents a question of law, which 

an appellate court reviews independently of the lower court’s 

determination.1

ANALYSIS

The primary issue on appeal is whether the district court 

erred in naming four new directors to the board of directors for 

the Foundation. Shelley argues that the district court’s appointment of directors was contrary to the Foundation’s bylaws, 

was beyond the statutory authority of the court, and was not 

supported by the evidence. Relatedly, Shelley asserts that as 

Delbert’s guardian and conservator, she could serve as his representative on the board.

Waiver and Authority to Act.

Before we reach Shelley’s assignments of error, we address 

a few preliminary matters. First, Cavanaugh argues that Shelley 

has waived most of her arguments on appeal, because she did 

not object to the authority of the district court to appoint the 

directors in question, but instead took issue only with the qualifications of two of the four directors suggested by Cavanaugh 

and ultimately appointed by the court.

1 Randy S. v. Nicolette G., 302 Neb. 465, 924 N.W.2d 48 (2019).
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IN RE STUEVEN CHARITABLE FOUNDATION

Cite as 304 Neb. 140

A review of the record shows that Shelley’s motion to dismiss specifically noted that there was no vacancy on the board, 

and as such, that the Foundation’s motion seeking the appointment of directors should be dismissed. Counsel renewed this 

argument at the hearing, but also responded to the court’s 

direct questioning about whether it had “any particular problem 

with those individuals [that were being recommended as directors].” On these facts, we conclude that Shelley has not waived 

these arguments on appeal.

In addition, Shelley contends that Neb. Rev. Stat. § 30-2653 

(Reissue 2016) authorizes her to act on Delbert’s behalf. We 

decline to address this contention, because it was not addressed 

by the district court.

Appointment of Directors.

Shelley argues on appeal that the district court was not 

authorized by the Nebraska Nonprofit Corporation Act or by 

the Foundation’s bylaws to appoint additional directors. A 

review of the pertinent language from both the Foundation’s 

bylaws and articles and the act is helpful.

According to the articles of incorporation and their amendments, the Foundation’s board of directors must have an odd 

number of directors, numbering at least three and no more than 

nine. Each director must reside in Hall County and cannot be 

a lineal descendant of Delbert or his wife or be a spouse of 

such descendant.

A quorum of the board is two directors. The bylaws also 

require an annual meeting and provide for regular meetings to 

be called by the board. In addition, special meetings may be 

called by the president, by the secretary-treasurer, or by two 

nonofficer members.

Directors may resign or may be removed from office for 

abandonment of duties of the office, for committing an act of 

moral turpitude against the Foundation, or for failure to meet 

residency or vocational requirements for the position held. 

“[R]emoval may be accomplished by resolution of the remaining directors or director, if only one,” after notice is given.
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IN RE STUEVEN CHARITABLE FOUNDATION

Cite as 304 Neb. 140

The articles of incorporation provide that “[f]or so long 

as he remains in office as a Director of this Foundation, any 

vacancy occurring in the office of Director shall be filled by 

appointment made by [Delbert, who is] the Surviving Stueven 

Family Director,” but that

[a]fter the death, resignation or removal of the Surviving 

Stueven Family Director from the office of Director of 

this Foundation, the remaining Directors or Director, if 

there is only one, shall have the authority to elect the 

replacement for the Surviving Stueven Family Director 

and thereafter the incumbent Directors, or incumbent 

Director if there is only one, shall have the authority 

to elect the replacement necessary to replace any other 

Director whose office is vacated for any reason.

The articles also provide:

Any vacancy . . . which is caused by there being no qualified appointee or the failure of a qualified appointee to 

accept the appointment or by the failure of the [board 

of] Directors to appoint an Appointed Director within 

sixty (60) days after a vacancy occurs . . . may be filled 

by appointment of a Hall County resident made by the 

Hall County District Court in an action brought by the 

Foundation for that purpose and to prevent the dissolution 

of the Foundation.

With respect to vacancies, the bylaws provide that “[a]ny 

vacancy occurring in the board of directors may be filled as 

provided in the Articles of Incorporation of the Foundation.” 

Moreover, “[i]f all of the directors shall die, resign, or otherwise become disqualified, then any interested person acting for 

and on behalf of the Foundation may petition to the District 

Court of Hall County, Nebraska, for the appointment of successor directors.”

As relevant to this assertion, Neb. Rev. Stat. § 21-1917 

(Reissue 2012) provides:

(a) If for any reason it is impractical or impossible 

for any corporation to call or conduct a meeting of its 

members, delegates, or directors, or otherwise obtain their 
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Cite as 304 Neb. 140

consent, in the manner prescribed by its articles, bylaws, 

or the Nebraska Nonprofit Corporation Act, then upon 

petition of a director, officer, delegate, member, or the 

Attorney General, the district court may order that such 

a meeting be called or that a written ballot or other form 

of obtaining the vote of members, delegates, or directors 

be authorized in such a manner it finds fair and equitable 

under the circumstances.

(b) The district court shall, in an order issued pursuant 

to this section, provide for a method of notice reasonably 

designed to give actual notice to all persons who would 

be entitled to notice of a meeting held pursuant to the 

articles, bylaws and the act, whether or not the method 

results in actual notice to all such persons or conforms to 

the notice requirements that would otherwise apply. In a 

proceeding under this section the district court may determine who the members or directors are.

(c) The order issued pursuant to this section may dispense with any requirement relating to the holding of 

or voting at meetings or obtaining votes, including any 

requirement as to quorums or as to the number or percentage of votes needed for approval, that would otherwise be 

imposed by the articles, bylaws, or the act.

(d) Whenever practical, any order issued pursuant to 

this section shall limit the subject matter of meetings 

or other forms of consent authorized to items, including amendments to the articles or bylaws, the resolution 

of which will or may enable the corporation to continue 

managing its affairs without further resort to this section. 

An order under this section may also authorize the obtaining of whatever votes and approvals are necessary for the 

dissolution, merger, or sale of assets.

(e) Any meeting or other method of obtaining the vote 

of members, delegates, or directors conducted pursuant to 

an order issued under this section, and that complies with 

all the provisions of such order, is for all purposes a valid 

meeting or vote, as the case may be, and shall have the 
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same force and effect as if it complied with every requirement imposed by the articles, bylaws, and the act.

We find no authority either under the Foundation’s bylaws 

and articles or under § 21-1917 for the district court to appoint 

new directors in the situation presented by this case. The 

articles allow the Foundation to seek the appointment of directors to fill any vacancy which is “not filled by appointment 

and acceptance . . . within ninety (90) days after the vacancy.” 

A vacancy is deemed to have occurred when a director dies or 

resigns, or where a director is removed from the board. Those 

things did not occur here: neither Delbert nor Burkhardt has 

died or resigned. Nor was either removed as a director from 

the board.

And § 21-1917(a) allows the court to call a meeting of the 

board of directors only when “for any reason it is impractical 

or impossible for any corporation to call or conduct a meeting of its . . . directors, or otherwise obtain their consent, in 

the manner prescribed by its articles, bylaws, or the Nebraska 

Nonprofit Corporation Act.” There is nothing in this language 

that suggests that the district court can appoint directors.

The bylaws and articles allow the district court to appoint 

new directors only when there was a vacancy on the board. 

Section 21-1917 does not independently authorize a district 

court to appoint new members to the board of a nonprofit 

corporation. As such, we find merit to Shelley’s assignment of 

error on this point.

CONCLUSION

The district court lacked the authority to appoint new directors. Accordingly, we vacate the district court’s order appointing new directors and remand the matter to the district court for 

further proceedings.

 Vacated and remand

further proceedi

Heavican, C.J., and Miller-Lerman, J., not partic