Court Opinion

ID: 9627656
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:49:49.940019+00
Date Added: 2024-06-11T15:36:11.629063
License: Public Domain

Dolliver, J.
— In 1967 plaintiff and others incorporated Community Chapel and Bible Training Center (Community Chapel) under former RCW 24.08. In 1981, the articles of incorporation were amended under the Washington Nonprofit Corporation Act. RCW 24.03. According to the bylaws, prior to March 4, 1988, plaintiff was the "original Pastor", who was "recognized as the Spiritual Overseer of the Church, ordained and appointed of God for the ministry and to shepherd the flock of Community Chapel and Bible Training Center." The bylaws further provided that the original pastor, "having established the original Church by the direction of God and with support of the congregation, shall have oversight of same until the Pastor agrees to change."
The articles provided the corporation should exist without members and that the affairs of the church were to be managed by a board of senior elders, except as specifically restricted by the corporation bylaws. The board was to consist of at least three members, as well as plaintiff, who is designated as the original chairman and an ex officio member. The original chairman could not be removed while living. As long as plaintiff was pastor of the church and chairman, the board was not to meet without his presence or permission, except to consider his salary. The board had *881no power to infringe upon the pastoral rights and authority listed in the bylaws.
For 20 years following its incorporation, Community Chapel apparently operated without untoward incident. In December 1987, however, allegations of sexual misconduct by plaintiff surfaced. In January 1988, the elders began a series of meetings and hearings regarding these allegations. In order to facilitate a fair hearing with respect to the allegations of sexual misconduct, plaintiff signed a written agreement in which he voluntarily stepped aside as pastor while the validity of these charges might be determined.
Hearings were conducted over several days in January and February 1988. On February 15, 1988, the elders wrote plaintiff proposing restrictions on his pastoral role and putting him on a "Special Status". Plaintiff refused to accept the special status and to honor the board's resolution of the problem. He announced to the congregation that he was not under the authority of the senior elders and would continue in his role as pastor.
On March 4, 1988, a board meeting was called and the senior elders met with plaintiff. The circumstances of the meeting are disputed. The elders claim they passed a resolution to amend the articles of incorporation in response to which plaintiff asked the elders to leave his residence. Plaintiff denies any vote was taken. He does, however, acknowledge that amendments to the articles had been placed on the table in front of him. In addition, he concedes the elders said they wanted to take a vote on some matter. However, plaintiff claims he asked the elders to leave before any further action was taken.
It is undisputed, however, that the elders continued the meeting at another site and that plaintiff did not join them. At the continuing meeting, the elders amended the articles by striking the provisions requiring the concurrence of plaintiff in any amendments to the articles and bylaws. They also voted to remove plaintiff as a senior elder, pursuant to the amended articles. In addition, the senior elders amended the bylaws to remove those provisions which gave *882the original pastor the authority to veto actions of the board.
Plaintiff brought this action seeking a declaratory judgment that the senior elders had no authority to amend the articles without his concurrence. He also sought an order enjoining the elders from interfering with the performance of his duties on behalf of the church. The board counterclaimed for a declaration that it acted properly in amending the articles and bylaws. In its second counterclaim, the board alleged plaintiff had breached his fiduciary duty to the corporation, and because of that conduct the board had the right to remove him as a member of the board. Among other affirmative defenses to the elders' counterclaim, plaintiff asserted that voiding the church articles under the Washington Nonprofit Corporation Act would violate the free exercise clause of the First Amendment and Const, art. 1, § 11 (amend. 34).
The trial judge granted a partial summary judgment on the board's first counterclaim and struck down the concurrence requirement in the church's articles of incorporation as illegal. The court also held that plaintiff was legally removed as director and that the elders acted pursuant to a lawful board meeting:
It is undisputed here that (a) the bylaws do not provide any notice for regular or special directors meetings; (b) all four directors were present at Barnett's house on the morning of March 4, 1988; (c) there was no notice of an adjourned or recessed meeting to be resumed on 3/4/88 to the plaintiff; (d) Barnett at one point asked the other three directors to leave his house, which they did; . . . (f) there was a bylaw that stated that directors' meetings must either be permitted by Barnett or held in his presence; and (g) all directors were in Barnett's presence on the morning of March 4, 1988. The Court determines that there was a valid directors' meeting on the morning of March 4, 1988. This meeting was not terminated by Barnett's request that the other directors leave his house. This request reflected Barnett's clear choice not to participate in that meeting, either at that time or at any continuation of that meeting later that day. Based on the undisputed facts, and Barnett's own declaration, it is unbelievable to suggest that *883Barnett intended to or evidenced an intent to participate further in the meeting on the morning of March 4, 1988, or any continuation of that meeting later that day.
The court did not address plaintiff's affirmative defenses. Later, in defendants' second motion for summary judgment, the court dismissed plaintiff's affirmative defenses and his complaint. The court granted the board judgment on its first counterclaim. Plaintiff appealed to the Court of Appeals. The appeal was then certified to this court.
The legal issues in this case are whether the pre-March 1988 articles of incorporation and bylaws of the Community Chapel on their face violated the Washington Nonprofit Corporation Act, RCW 24.03, and whether the board of senior elders/directors of Community Chapel has the authority to amend the articles of incorporation without the concurrence of the plaintiff. Neither of the parties has called to our attention any case holding that any corporation law in the country, profit or nonprofit, prohibits a provision in the articles of incorporation requiring the concurrence of a special individual to amend the articles. Without such authority defendants, to bolster their case, rely on vague claims of public policy and concern that there be no exaltation of "form over substance". We decline to adopt this analysis, however, but believe the language of the statutes themselves is controlling.
Article 6 of the articles of incorporation at issue reads as follows:
Amendments and Bylaws
Section 1: Amendments to these Articles of Incorporation may be made by a three-fourths (34) affirmative vote of the Board of Senior Elders and the original Pastor's concurrence, if he is still presiding.
Section 2: The Bylaws shall be the governing law for the internal affairs of this corporation to the extent that they are not inconsistent with these Articles of Incorporation.
Section 3: The Bylaws of the corporation may be amended by a three-fourths (%) affirmative vote of the Board of Senior Elders and the original Pastor's concurrence, if he is still presiding.
*884The defendants claim the right given by the articles of incorporation for one person to disapprove any amendment to the corporate articles was inconsistent with RCW 24.03-.115, which prohibits delegation of certain powers to committees of the board of directors, and with RCW 24.03.165(2), which allows a majority of the board of directors to amend the articles of incorporation.
The difficulty with the argument as to RCW 24.03-.115 is that the authority given plaintiff comes from the articles of incorporation, not from the board of directors. RCW 24.03.115 applies only to actions taken by a board of directors, not agreements reached in the articles of incorporation. While it is certainly true a veto power does reside in plaintiff, this fact is irrelevant. The statute forbids action by a board of directors’, the case before the court involves language in the articles of incorporation. Nothing more than a prohibition against delegation to a committee of the board of directors is covered by the statute. The statute is silent on the issue of powers granted by the articles of incorporation. RCW 24.03.115 cannot and does not apply to this case.
RCW 24.03.165(2) provides for the amendment of articles of incorporation by a vote of the majority of the directors in office. However, RCW 24.03.455 provides:
Whenever, with respect to any action to be taken by the members or directors of a corporation, the articles of incorporation require the vote or concurrence of a greater proportion of the members or directors, as the case may be, than required by this chapter with respect to such action, the provisions of the articles of incorporation shall control.
(Italics ours.)
It cannot be questioned but that on the face of article 6 of the articles of incorporation the "original Pastor" is necessary to any three-fourths majority which would amend either the bylaws or the articles of incorporation. Thus, the vote of the original pastor is that "vote or concurrence of a greater proportion" allowed by the statute.
*885The trial court stated:
The requirement in Community Chapel's pre-March 4, 1988 articles for concurrence by the original pastor (Barnett) in any amendment to the articles violated on its face the prohibition against delegating the power to amend the articles. This required concurrence by the original pastor was an unlawful delegation to one person, and was not a "greater proportion" of directors as contemplated by RCW 24.03.165(2) and .455, because all directors did not have the same rights.
We disagree. The question to be examined is not what the statute "contemplates" but what it says. Nothing in the text of the act forbids the naming of the "original Pastor" — or anyone else — as the person who must be part of the three-fourths majority. Furthermore, we find no legislative history to justify twisting the meaning of the plain English of the statute. Article 6 might well, in retrospect, be viewed by some as an improvident provision. It is not the function of this court, however, to torture the statute in order to protect those who freely chose to enter into this kind of relationship.
The board of senior elders/directors of the Community Chapel has no authority, without the concurrence of plaintiff, to amend the articles of incorporation and bylaws. While we reverse the trial court and remand for further proceedings, we point out that this does not necessarily defeat the effort by the board to oust plaintiff. The issue of breach of fiduciary duty still remains to be considered by the trial court.
Reversed.
Callow, C.J., Utter, Brachtenbach, Andersen, and Smith, JJ., and McInturff, J. Pro Tern., concur.