Court Opinion

ID: 9952882
Source: CourtListenerOpinion
Date Created: 2024-03-20 20:09:16.565499+00
Date Added: 2024-06-11T14:41:02.463969
License: Public Domain

DESIGNATED NOT FOR PUBLICATION

                                S' T' ATE OF LOUISIANA

                                 COURT OF APPEAL

                                    FIRST CIRCUIT

                                   NO. 2023 CA 0450

  MARY SMITH, INDIVIDUALLY AND ON BEHALF OF CONCERNED
 MEMBERS OF THE LOUISIANA ASSOCIATION OF THE DEAF, INC.

                                        VERSUS

                      JIMMY GORE AND JASON ISCH

                                         Judgment Rendered.        MAR 2 0 2024

                                   Appealed from the
                               19th Judicial District Court
                  In and for the Parish of East Baton Rouge
                                   State of Louisiana
                               Case No. C690808, Sec. 27

               The Honorable Trudy M. White, Judge Presiding

Marcus J. Plaisance                             Counsel for Defendant/ Appellant
Mark D. Plaisance                               Louisiana Association of the Deaf
Prairieville, Louisiana

Jacob Longman                                   Counsel for Plaintiff/Appellee
Kathryn Jaku back Burke                         Mary Smith, individually and on
F. Richard Sprinkle                             behalf of Concerned Members of
Jennifer Cameron                                The Louisiana Association of the
Baton Rouge, Louisiana                          Deaf

           BEFORE; THERIOT, PENZATO, AND GREENE, JJ.

                      ef--P-     e--zo-r --, .
THERIOT, J.

         This appeal arises from a suit filed against a nonprofit corporation by a

member of the corporation seeking to enforce the results of a vote taken at a

special meeting of the members. For the reasons set forth herein, we reverse.

                            FACTS AND PROCEDURAL HISTORY

         The Louisiana Association of the Deaf (" LAD") is a Louisiana non- profit

corporation.         In June 2019,           Jimmy Gore and Jason " Jay"                   Isch were elected

President and Secretary, respectively, of LAD for two-year terms.                                       Shortly

thereafter, on August 7, 2019, a petition was submitted to Secretary Isch entitled

 Petition to Call for a Special Meeting." This petition was signed by a number of

LAD members and, pursuant to the authority bestowed upon LAD members by the

LAD Bylaws,' requested that Secretary Isch issue a call for a special meeting to be

held on August 24, 2019 at 10: 00 a.m. The petition stated that the purpose of the

special meeting would be to remove Gore from the office of President for the

following reasons:

           I) incompetent leadership, management, and governance on behalf of
              the LAD after being elected, which included bullying and

               harassment,

           2) demonstrated negligence according to our Bylaws, and

           3) demonstrated power-hungry access to all of our funds, including
               investments.

The petition also requested that a certified parliamentarian and an interpreter be

hired for the special meeting and set forth how the meeting would be conducted,

what matters would be voted upon, and what the additional effects of a vote to

remove Gore from the office of President would be.'                                      Finally, the   petition

I The LAD Bylaws provide that the secretary shall issue a call for a special meeting of the membership when
ordered to do so in writing by one- fifth of LAD' s Full Members in a good standing. LAD Bylaws Art. IV, § 2( C) &
Art. V, § 2.

2 The petition sets forth the following effects of a vote to remove Gore as President:

          Gore] shall turn over all of the LAD properties ( Google documents, keys, usernames and
         passwords for computers and modems, and etc. to our VP Crosby in front of the members).

                                                           2
requested    that   the    LAD       Board      cease      all   board -related    activities,   including

meetings, retreats, and activities, until after the special meeting.

      Secretary Isch acknowledged receipt of the petition in an August 13, 2019

letter addressed to " Members of LAD," but stated that " the demands of the petition

are not in keeping with our Bylaws and Louisiana state laws."                             Secretary Isch

explained that LAD' s Bylaws only authorize LAD' s President or Board to initiate

the removal process and ultimately remove an officer.                           Secretary Isch further

explained that the reasons given in the petition for Gore' s removal were not

 clearly specified" and the petition would have to be revised to include clear and

specific charges for each point listed, including dates and times of incidents and

the identity of individuals involved. Finally, Secretary Isch noted that although the

petition requested that the special meeting be called for a specific date and time,

LAD' s Bylaws only authorize the President or Board to set the date of a special

meeting.    Therefore, Secretary Isch explained that a revised petition containing the

information requested along with original signatures would be required before a

special meeting could be called at a date and time to be chosen by the Board.

      The original petition of the LAD members was subsequently resubmitted,

unrevised, to Secretary Isch on September 21, 2019, along with a cover letter from

LAD member Cindy RobilIard, stating that the original petition of the LAD

members was in compliance with the LAD Bylaws and requesting that Isch contact

her to arrange a date and time to verify the signatures on the petition with the LAD

membership roster and thereafter to set a date for the special meeting within the

next ten days.

      In a letter to LAD members dated October                             1,     2019,   Secretary Isch

acknowledged receipt of the resubmitted " unrevised" petition and what he referred

      President Gore' s membership in LAD shall be terminated for two years and he shall be banned to
      serve on LAD Board, any LAD committees, attend LAD events and/ or meetings and Bingo Zone
      or represent the LAD in any way for two years. [ sic]

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to as Robillard' s " demand letter."     Secretary Isch stated that while the " general

purpose for the call of the special meeting" was included in the petition, the

petition "
             still [ does] not meet our requests and [ is] not in keeping with our Bylaws

and Louisiana state law."     Citing advice of counsel, Secretary Isch went on to state

that nothing in the Bylaws prohibits the Board from requiring additional details

before calling a special meeting, and accordingly, a revised petition with additional

details would be required before the special meeting would be called.

       Following Secretary Isch' s refusal to call a special meeting, a notice was

sent out by " concerned members of LAD" on October 30, 2019, calling a special

meeting on November 10, 2019 for the purpose of " rescind[ ing] the election of

LAD President Gore and LAD Secretary Isch followed by an election of a new

LAD president and secretary."

       In response to the notice issued by the " concerned members of LAD,"

LAD' s attorney, John G. Veazey, issued a statement on behalf of LAD' s Board,

disavowing the notice as unauthorized and violative of both the Bylaws and state

law and concluding that "[ t]he notice for the special meeting on November 10th is

illegitimate and shall not be recognized by LAD." Although Veazey reiterated the

Board' s requirements for submission of a new petition with additional information

in order to call a special meeting, he further advised the members that the LAD

Bylaws do not permit the members to remove officers or directors, and therefore,

any vote by the members at a special meeting could only be advisory in nature.

       The special meeting called by " concerned members of LAD" was held on

November 10, 2019.         President Gore and Secretary Isch did not attend.      At the

meeting, a majority of members present voted to remove Gore and Isch from their

elected positions.    The members also voted to have the LAD Vice President fill the

newly -vacant office of President and to have the Board fill the vacancy in the

office of Secretary. President Gore and Secretary Isch were informed of the results

                                             M,
of the special meeting by letters dated November 12, 2019, but refused to step

down from their positions.

       On November 18,       2019, LAD member Mary Smith filed a " Petition for

Temporary Injunction, Permanent Injunction[,] and/ or Writ of Mandamus" against

President Gore and Secretary Isch in the Nineteenth Judicial District Court, in

which she asked the court to order President Gore and Secretary Isch to recognize

the validity of the special meeting and the actions taken at the special meeting, step

down from office, and turn over all property belonging to LAD.            Smith further

requested that the court order that all actions taken by Gore and Isch since the

special meeting are without effect as not properly authorized, that all actions,

letters, firings, and discipline that were       improperly instituted by Gore and Isch

since their election into office be revoked and rendered moot, that they be enjoined

both individually and through their attorney, Veazey) from harassing LAD

members and other individuals present at the special meeting, that they be enjoined

from posting on social media about the matters set forth in this suit, and that all

costs and attorney fees incurred in filing the action be borne by LAD.         Smith' s

petition states that it is filed by Smith " individually and on behalf of concerned

members of [LAD];" however, Smith is the only plaintiff named in the petition and

the only plaintiff who signed a verification of the petition.

      Following a hearing on December 5,               2019 on Smith' s request for a

preliminary injunction, the trial court concluded that it " lacks jurisdiction over the

person of the named defendants and does not have the legal power and authority to

render a personal judgment against Jimmy Gore or Jason Isch as a party to this

action."   Accordingly, the trial court signed a judgment on January 2, 2020,

granting Smith " leave to amend her petition to establish the Court' s Jurisdiction

over the person of the named defendants, Jimmy Gore or Jason Isch, within 30

days from [January 2, 20201, otherwise her claims will be dismissed."

                                             5
      Thereafter,   on January 24, 2020, Smith filed a " First Supplemental         and

Amended Petition for Temporary Injunction, Permanent Injunction[,] and/ or Relief

or Writ of Mandamus," in which she added LAD as a defendant and alleged that

she is a member of LAD in good standing, that she and others have tried, to no

avail, to secure the willingness of Gore and Isch to step down and refrain from

harmful behavior to LAD and its members, and that she wishes to assert her rights

as a member of LAD for herself individually and on behalf of " all concerned

members"    in a derivative action pursuant to La. C. C. P. art. 611.   Smith prayed for

judgment " granting Mary Smith individually and on behalf of the [ LAD] a finding

that the Special Meeting was lawfully called, noticed, and held; and that the results

of the meeting be given legal effect by Judgment, ordering Jimmy Gore and Jason

Isch to step down from office and return all property of the [ LAD] to its Office in

Baton Rouge."     Following the filing of the supplemental and amended petition,

Gore and Isch were dismissed without prejudice from the suit in their individual

capacities on Smith' s motion.

      LAD filed peremptory exceptions to Smith' s supplemental and amended

petition, raising objections of no right of action, no cause of action, and improper

use of a class action.   These exceptions were denied by judgment dated December

9, 2020, and the matter proceeded to trial on the merits.

      A bench trial was held over the course of four days in April, May, and July

of 2022,   following which the trial court rendered judgment on August 9, 2022,

ordering or decreeing that the special meeting was properly called and conducted

under La. R.S. 12: 224 and Article V, Section 2 of the LAD Bylaws, and the vote of

the members at that meeting has full force and effect in removing Gore and Isch as

LAD officers. The trial court judgment also included a number of other orders and

decrees, including the following: Gore shall be removed from the office of LAD

President; Isch shall be removed from the position of Executive Director of Deaf

                                            no
Focus; the removal, suspension, reprimand, or ban of certain officers or members

is reversed and those officers or members are reinstated; certain LAD officers or

directors shall step down from appointed positions and turn over any LAD

property; certain individuals are appointed as interim LAD officers or directors;

Gore and Isch are enjoined from any further actions as LAD officers in any

capacity for a period of ten years; Gore and Isch shall immediately turn over all

LAD property; Gore and Isch are enjoined from withdrawing any sums or

participating in any way with any payments being made from any of the accounts

of money or investments owned by LAD and Deaf Focus; Gore and Isch shall

vacate the building within twenty- four hours of notice of judgment, taking with

them only their personal belongings; all confidentiality agreements are invalid; the

interim Board shall schedule a conference and elections and fill the position of

Executive       Director of Deaf Focus                  with     a   qualified      individual       as    soon     as

practicable; an accounting shall take place as soon as practicable and any acts of

fraud or misappropriation shall be reported to the members;                                   and    all   costs    of

litigation, court costs, and reasonable attorney fees shall be borne by LAD.

           LAD appealed,         arguing that the judgment was in error for the following

reasons:      Smith had no cause of action to bring a derivative action;' Smith had no

right of action to bring a claim against LAD;' the results of the special meeting

  LAD urges that the trial court erred in denying its peremptory exception because Smith' s petition fails to state a
cause of action for a derivative suit. However, as previously noted, Smith sought injunctive and/ or mandamus relief
in addition to the relief sought by derivative action. This Court does not recognize this sort of partial exception of
no cause of action.    See Benoist v. Jackson National Life Insurance Company, 2022- 0878, n. 5 ( La -App. I Cir.
4114123), 364 So. 3d 1162, 1166 n 5 ("   This Court has held that an exception of no cause of action should not be
maintained in part, so as to prevent a multiplicity of appeals. Therefore, if there are two or more items of damages
or theories of recovery that arise out of the operative facts of a single transaction or occurrence, a partial judgment
on an exception of no cause of action should not be rendered to dismiss an item of damages or theory of recovery."
 citations omitted)). For this reason, the trial court did not err in denying LAD' s partial exception of no cause of
action -

4 LAD' s peremptory exception urged that Smith does not have a right of action to proceed as an individual in a
derivative claim to recover for losses sustained by a corporation due to mismanagement or breach of fiduciary
duties. LAD' s exception concerned only Smith' s right of action to bring a derivative suit, but did not mention her
requests for injunctive and/ or mandamus relief. This Court has held that the Louisiana Code of Civil Procedure does
not provide for a partial exception of no right of action.    See State, by & through Caldwell v. Astra Zeneca AB,
2016- 1073, p. 6 ( La.App. I Cir, 4111118), 249 So. 3d 38, 43, writ denied, 2018- 00766 ( La. 9121118), 252 So. 3d 899,
and writ denied sub nom. State by & through Caldwell v. AstraZeneca AB, 2018- 0758 ( La. 9121118), 252 So. 3d 904
  Where the plaintiff pleads multiple theories of recovery based on a single occurrence or set of operative facts, the
partial grant of an exception of no right of action, which attacks only one theory of recovery and which does not

                                                          7
could not be given effect because the meeting was invalid; the ancillary orders

issued by the trial court were improper because they involved discretionary acts;

and costs and attorney fees should not have been awarded to Smith.

        Smith counters that her suit is not a derivative suit, since she did not bring

the suit on behalf of LAD, but rather on behalf of herself as a member and on

behalf of other concerned members against LAD pursuant to La. R. S. 12: 224( H).

She further asserts that the trial court' s judgment is proper under La. R.S.

12: 224( H).

                                              DISCUSSION

        Despite Smith' s assertions in her appellate brief that her suit " is not a

derivative suit," and that she " did not                bring this suit on behalf of LAD[,] she

brought it on behalf of herself as a member and on behalf of other concerned

members,"      her supplemental and amended petition clearly states that she is filing

the suit as plaintiff "on behalf of the Louisiana Association of the Deaf, Inc.," to

assert rights for herself and other concerned members pursuant to La. C. C. P. art.

611, which provides for a member of a corporation to bring a derivative action on

behalf of the corporation to enforce a right of the corporation when the corporation

refuses to do so. La. C. C. P. art. 611( A). Nevertheless, since Smith now concedes

that her suit is not proper as a derivative action, we will consider whether the trial

court properly rendered the judgment in her favor under La. R.S. 12: 224( H).

        Louisiana Revised Statutes 12: 224( H) provides a mechanism by which the

trial court may remove a member of the board of directors of a corporation from

office under certain circumstances:

        Unless the articles or by-laws provide otherwise, the court may, at the
        suit of five or more voting members, remove from office any director
        in case of fraudulent or dishonest acts, or gross abuse of authority or

dismiss a party, would be invalid as an impermissible partial judgment.").   As such, the trial court did not err in
denying LAD' s partial exception of no right of action.

                                                        1
        discretion, with reference to the corporation, The court may bar from
        reelection any director so removed, for a period prescribed by the
        court.
                The corporation shall be made a party to such action.

        Smith alleges that the trial court correctly removed Gore and Isch from their

positions pursuant to La. R. S. 12: 224( H) after finding that they committed gross

abuse of authority and discretion in their capacity as LAD board members.

However, Smith' s petition was not a " suit of five or more voting members,"          as

required by La. R.S. 12: 224( H). As previously noted, the only named plaintiff in

this suit is Smith.    Although the petition references " concerned members of the

Louisiana Association of the Deaf," none of those members are named as

plaintiffs, nor does the petition include allegations that the concerned members are

 voting members."      Accordingly, Smith' s petition could not form the basis for the

removal of board members by the trial court under La. R.S. 12: 224(H).

        Although the trial court could not remove the officers pursuant to La. R.S.

12: 224( H), Smith' s petition also sought a writ of mandamus, and the judgment

issued by the trial court included orders in the form of a mandamus, ordering LAD

and its officers to recognize the validity of the special meeting and give effect to its

results.   LAD argues that the trial court' s issuance of such orders was in error.

        Louisiana Code of Civil Procedure article 3864 provides that a writ of

mandamus may be directed to a corporation or an officer thereof to compel either:

 1)   the holding of an election or the performance of other duties required by the

articles of incorporation or bylaws, or as prescribed by law, or ( 2) the recognition

of the rights of the corporation' s members or shareholders.

        A writ of mandamus may be issued when the law provides no relief by

ordinary means or where the delay involved in obtaining ordinary relief may cause

injustice. La. C. C. P. art. 3862.   Mandamus is an extraordinary remedy, to be used

only when there is a clear and specific legal right to be enforced or a duty which

ought to be performed; it never issues in doubtful cases.      Texas Brine Co., LLC v.

                                            E
Naquin, 2019- 1503, p. 7 ( La. 1/ 31/ 20), 340 So. 3d 720, 725. Mandamus may be

used to compel the performance of corporate duties which are purely ministerial in

nature,    i. e., those duties which require no exercise of judgment or discretion,

however slight, in their performance.                         Thornton ex rel. Laneco Construction

Systems, Inc. v Lanehart, 97- 1995, p. 6 ( La.App. 1 Cir. 12/ 28/ 98), 723 So.2d

1118, 1123.

         In issuing judgment ordering LAD and other individuals to recognize and

give effect to the results of the special meeting and issuing other ancillary orders,

the trial court first concluded that the special meeting was properly called under

La. R.S. 12: 224 and LAD' s Bylaws.

        As previously noted, LAD' s Bylaws contain a provision for members to

demand a special meeting. Article V, Section 2 states that a special meeting " shall

be called upon the written request of one- fifth ( 1/ 5) of the Full Members of the

LAD in good standing."'                 Section 2 further provides that the call issued for a

special meeting shall state the purpose of the meeting and give ten days prior

written notice of the date of the meeting.                    Article IV, Section 2( C) of the Bylaws

requires the LAD Secretary to issue a call for a special meeting when requested by

one- fifth of the full members in good standing.

        Louisiana' s Nonprofit Corporation Law, La. R.S.                              12: 201,     et seq.,     also

contains a provision for calling a special meeting of the members.                                      Louisiana

Revised Statutes          12: 229( 0) provides that upon written request of any person

S Article Ill, Section 1 of the LAD Bylaws defines " Full Member":

        All Full Members shall be deaf, hard of hearing and deaf -blind people, 18 or above of age,
        residing in Louisiana having paid their required dues. Full members shall have all rights and
        privileges of membership including, but not limited to, to [ sic] the right to vote and the right to
        hold any LAD office or position.

        Each graduating senior of the Louisiana School for the Deaf and all graduating seniors of regular
        public, private, or special schools who are deaf, hard of hearing, or deaf -blind may be given by the
        Executive Board a free one- time two-year Full Membership in this Association for the first two (2)
        years following their graduation.

The definition of "Member in Good Standing" is also provided in Article III of the LAD Bylaws:

         Only members whose dues are paid and current pursuant to Article Ill, Section 7 shall be members
         in good standing of LAD.

                                                         10
authorized in the articles or bylaws of a nonprofit corporation to call a special

meeting, the Secretary shall call a special meeting of the members to be held at the

time which the Secretary fixes, not less than ten or more than sixty days after the

receipt of the request.     If the Secretary neglects or refuses to issue the call, the

person making the request may do so.          La. R.S. 12: 229( 0).   Louisiana Revised

Statutes 12: 230( A) requires the authorized person or persons calling a meeting to

give written notice of the time, place, and purpose of the meeting to all members

entitled to vote at the meeting.

       Thus,     reading the LAD Bylaws in conjunction with La. R.S. 12: 229( C),

upon written request of "one- fifth ( 115) of the Full Members of the LAD in good

standing,"     Secretary Isch was required to issue a call for a special meeting, giving

at least ten days prior notice and stating the purpose of the meeting, i.e., a vote of

members to remove President Gore.             Although the members requesting the

meeting do not have the authority under either the LAD Bylaws or La. R.S.

12: 229( C)    to demand that the special meeting be held on a particular date, upon

Secretary Isch' s failure to issue the call within the time allowed for him to do so,

the person making the request for the special meeting, in this case, one- fifth of the

Full Members of LAD in good standing, may issue the call.                 See La. R.S.

12: 229( C).

       The October 30, 2019 notice entitled " Call For A Special        Meeting of the

LAD Members,"        which purported to call a special meeting on November 10, 2019,

does not state that it is issued by those Full Members of LAD in good standing

who signed the petition requesting a special meeting.            It simply states that

 concerned members of LAD are calling a Special Meeting of the LAD members."

Further, the purpose listed on the October 30, 2019 notice is not the same as the

purpose stated on the petition submitted to Secretary Isch requesting a special

meeting.       While the petition signed by the full members in good standing stated

                                             11
that the purpose of the special meeting would be to remove President Gore from

office, the call issued by the " concerned members of LAD" stated that the purpose

of the special meeting would be to " rescind the election of LAD President Gore

and LAD Secretary Isch followed by an election of a new LAD president and

secretary."   Although the full members in good standing who petitioned Secretary

Isch to call a special meeting may issue the call themselves pursuant to La. R.S.

12: 229( C) upon Secretary Isch' s failure to do so timely, there is no provision that

allows for the call to be issued by any other person besides the person or persons

who made the request for a special meeting, nor is there any provision allowing the

special meeting to be called for a different purpose than that stated in the written

request previously submitted to the Secretary. As the October 30, 2019 notice was

essentially issued anonymously and called the special meeting for a different

purpose than was stated in the petition twice submitted to the Secretary, the notice

was defective, the November 10, 2019 special meeting was not properly called,

and the actions taken are null and void.   See Mount Gideon Baptist Church, Inc. v.

Robinson, 2001- 0749, pp. 7- 8 ( La.App. 1 Cir. 2115102), 812 So. 2d 758, 763, writ

denied, 2002- 1229 ( La. 6121102),   819 So. 2d 1024 ( actions taken at a "    legally

flawed" special meeting where notice was not sent, a quorum was not present, and

the applicable statutory requirements for the actions taken at the meeting were not

followed, were invalid); Bethlehem Missionary Baptist Church v. Henderson, 522

So. 2d 1339, 1341 ( La.App. 2 Cir. 1988) ( failure to give notice that a particular

issue is to be considered at a special meeting will void that meeting); Jones v.

Shreveport Lodge No. 122, B. P. O. E., 221 La. 968, 975, 60 So. 2d 889, 892 ( La.

1952) (   where the law requires notice of the purpose of a meeting before the

meeting may be convened, these statutory requirements are sacramental,            and

failure to comply therewith renders the action void and of no effect).

                                           12
      Because the November 10, 2019 meeting was invalid, the trial court erred in

rendering judgment decreeing that the meeting was lawfully called and ordering

other ancillary relief carrying out the actions taken at the meeting.

                                      DECREE

      For the reasons set forth herein, the judgment of the trial court is reversed.

Costs of this appeal are assessed to plaintiff/appellee, Mary Smith.

      REVERSED.

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