Court Opinion

ID: 9742055
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:05:55.11066+00
Date Added: 2024-06-11T07:24:28.239024
License: Public Domain

MILLER, Chief Justice
(concurring specially).
I write specially to point out that in amending the bylaws by implication, the Board of Directors was required to follow both statutory law and procedures set forth in its own articles of incorporation and bylaws. St. John’s Hosp. Medical Staff v. St. John Regional Medical Ctr., Inc., 90 S.D. 674, 681, 245 N.W.2d 472, 475 (1976) (holding that failure to follow specific amendment procedures rendered attempted amendment of bylaws null and void). There has been no claim that amendment of the bylaw by implication violated any statute. Article of incorporation X required at least a 66% favorable vote for the WEB Board to amend the bylaws. As only one of at least five directors necessary for a quorum voted against Nelson’s employment contract, the necessary 66% favorable vote amended the bylaw by implication.*
I question the majority’s assertion that article of incorporation X, giving the Board power to amend the bylaws, and bylaw article XVI, giving similar power to WEB members, conflict. The same principles which govern the construction of contracts govern the construction and interpretation of corporate bylaws. St. John’s, 90 S.D. at 679, 245 N.W.2d at 475. One such principle is that, whenever possible, contractual provisions will be construed harmoniously and effect given to all provisions. GMS, Inc. v. Deadwood Social Club, Inc., 333 N.W.2d 442, 444 (S.D.1983). Therefore, the two provisions should be read as providing separate means by which either the membership or the Board may amend the WEB bylaws. See Phillips v. National Trappers Ass’n, 407 N.W.2d 609, 612 (Iowa App.1987) (holding valid an amendment to articles of incorporation which created two methods by which members could amend bylaws).

 It appears from the record that a previous WEB Board also signed an employment contract for a specified term with a former manager.