Court Opinion

ID: 6341658
Source: CourtListenerOpinion
Date Created: 2022-05-17 21:02:58.20142+00
Date Added: 2024-06-11T09:15:04.262082
License: Public Domain

Filed 5/17/22 Picasso v. Merida CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION SEVEN

GUILLERMO GOMEZ PICASSO,                                    B306385

       Plaintiff and Appellant,                             (Los Angeles County
                                                            Super. Ct. No. BC665813)
         v.

HUGO MERIDA, et al.,

      Defendants and Respondents.

     APPEAL from a judgment of the Superior Court of Los
Angeles County. Steven J. Kleifield, Judge. Reversed and
remanded with directions.
     Rowena J. Dizon for Plaintiff and Appellant.
     Dilip Vithlani for Defendants and Respondents.

                                 _______________________
                         INTRODUCTION
       This appeal arises from a dispute between board members
of a nonprofit housing organization, Central American Relief
Foundation, Inc. (CARF).
       Appellant and long-time CARF board member Guillermo
Gomez Picasso contends board president Hugo Merida held a
secret “special meeting” on January 4, 2016 and installed a new
slate of directors without notice to the existing board, in violation
of quorum and notice requirements in CARF’s bylaws. The
putative new board liquidated CARF’s real estate holdings and
dissolved the organization. Picasso sued alleging the new board
members misappropriated funds and he sought, among other
relief, a declaration that he was a continuing director of CARF
and the removal of the new board members installed at the
January 4, 2016 special meeting.
       Following a bench trial, the court did not address the
legality of the January 4, 2016 special meeting but instead
concluded Picasso’s term of office ended in June 2017 when the
new board held an annual meeting and formally voted to remove
any directors not in attendance. The trial court found Picasso
was not a director and had no standing to sue for removal of
board members or misappropriation of assets.
       We conclude that the January 4, 2016 special meeting was
held in violation of CARF’s bylaws and Picasso remains a director
who has standing to bring an action. We remand to the trial
court for further proceedings to determine the merits of Picasso’s
claims.

                                 2
      FACTUAL AND PROCEDURAL BACKGROUND

   A. CARF’s Formation and Leadership Prior to 2016
       CARF owned three apartment buildings in Los Angeles
that provided low-rent housing to low-income individuals. Prior
to 2016 CARF was led by four individuals: Maria Luisa Vela
(appellant Guillermo Gomez Picasso’s wife, who is now deceased),
Charles Jeannel, respondent Hugo Merida and Picasso. Vela and
Jeannel founded CARF in 1996. Vela and Merida were CARF’s
initial directors, and in March 1996 they voted to adopt CARF’s
bylaws. In late 1996 or early 1997 Jeannel also became a CARF
director. Picasso was elected to the board of directors in 2009.
Among their other duties, Jeannel helped find and finance
CARF’s property purchases, Merida handled CARF’s tax returns
and Vela oversaw day-to-day operations and property
management of the organization with the assistance of Picasso
and their son, William Vela.1
       It is undisputed that as of the beginning of 2016 Vela,
Jeannel, Merida and Picasso were CARF’s only board members.
Merida served as President, Jeannel as Vice President, Vela as
Secretary and Picasso as Treasurer. By that time relations
among the four directors were strained. Jeannel testified that
under Vela’s management CARF fell into significant arrears with
a property lender causing CARF to file two bankruptcy petitions
to save one of its properties from foreclosure. According to

1     Because Maria Luisa Vela and William Vela share the
same surname, to avoid confusion, we use Vela to refer to Maria
Luisa and refer to William by his first name.

                               3
Jeannel, Vela believed Merida had been stealing from CARF
accounts.2
       On approximately January 1, 2016, Vela suffered a heart
attack and was hospitalized in the intensive care unit. Picasso
testified that while Vela was unconscious in an induced coma he
discovered Merida and Merida’s wife in the ICU trying to make
Vela sign a paper. When Picasso intervened and stopped them,
Merida yelled at Picasso and threatened to kill him. Picasso then
obtained a restraining order against Merida.
       Vela died on January 3, 2016.

   B. Merida Holds a Special Meeting Without Notice and
      Elects New Directors
      On January 4, 2016, the day after Vela died, Merida held a
“special meeting” at Merida’s personal office; the meeting was not
held at CARF’s principal office in Los Angeles. The meeting was
attended by Merida, Edwin Jacinto, Carlos Roberto Calderon and
Dahlia Martinez (Merida’s sister). Neither Picasso nor Jeannel
received notice of this special meeting, and neither Picasso nor
Jeannel was present. Picasso only learned of the meeting after
the fact.
      The special meeting minutes, as documented by Merida,
stated “All are [sic] Directors of this Corporation according to the
Bylaws of the Incorporation were present” and the board
“resolved to elect” Jacinto, Calderon and Martinez to the Board.
The special meeting minutes did not mention or purport to
remove Picasso or Jeannel as directors.

2    In 2014 Vela filed an unrelated personal lawsuit against
Jeannel that ultimately settled.

                                 4
    C. The Purported New Board Sells CARF Property,
       Sues Jeannel and Votes To Remove Picasso and
       Jeannel from the Board of Directors
       Hostilities between the new board and Picasso and Jeannel
quickly escalated in January 2016. Within a few days after the
January 4, 2016 special meeting, Merida sent a cease-and-desist
letter on behalf of CARF to Picasso and William demanding they
no longer collect rents or communicate with tenants and
threatening them with a lawsuit. Soon after Merida orally
demanded Picasso and William release all rental money they
and/or Vela had collected. On February 6, 2016, the new board
voted to remove Jeannel from CARF bank accounts.
       Picasso hired a lawyer to address these issues. He did not
attend any meetings conducted by Merida after Vela’s death
because he considered the meetings and the new board
illegitimate.
       In February and May 2016, the new board voted to sell all
CARF’s property. In the interim, in March 2016, the Board voted
to sue Jeannel “for misrepresentation, disseminating false
information about the officers and the administration of this
organization.”3 Jeannel counter-sued for conversion, constructive
fraud, “removal of a dishonest director,” declaratory relief and
other claims, stating that “the gravamen of this cross-complaint”
is that Merida “hijacked” CARF “for his own personal benefit and
looted corporate assets and opportunities.” Jeannel’s cross-
complaint did not include or mention Picasso. Jeannel recorded a
lis pendens on each of CARF’s properties, all of which were
expunged on May 17, 2017, when the trial court in Jeannel’s case

3     CARF’s complaint against Jeannel is not included in the
record on appeal.

                                5
granted each side’s cross-motions for judgment and denied relief
to all parties on the complaint and cross-complaint.
       On June 6, 2017, the new board held an “annual meeting.”
At the meeting the board voted to remove all directors not in
attendance⎯namely, Picasso and Jeannel.
       On June 12, 2017, Picasso and Jeannel convened their own
“special meeting” as the alleged legitimate directors of CARF.
Picasso and Jeannel voted to remove Merida (who received notice
but did not attend the meeting).
       From January 2016 until June 2018, the new CARF board,
led by Merida, met regularly without providing notice to Picasso
or Jeannel. The new board also elected several new members. In
June 2018 the board voted to dissolve CARF.

   D. Picasso’s Complaint
      Picasso filed his complaint on June 21, 2017. Picasso’s
operative Second Amended Complaint contained three causes of
action for (1) declaratory relief declaring him a director; (2)
removal of the alleged new directors; and (3) misappropriation of
assets by Merida. Picasso named Merida and CARF as parties to
the action, along with Doe defendants and several additional
individual defendants who were purported new board members:
Jacinto, Calderon, Sandra Pelaez, Aroldo Ramirez and Edwin
Arango. Picasso alleged defendants were never properly elected
directors of CARF because their “election” was in violation of
numerous CARF bylaws including Merida’s failure to give
Picasso notice of the meetings during which the new directors
were elected. Picasso also asserted he was never properly
removed and remains a director of CARF. Picasso declared
“there is now an impasse and deadlock between and among
Plaintiff and the individually named Defendants as to who has

                                6
the authority to act on behalf of Central American Relief
Foundation, Inc. in the capacity of a Director of the corporation”
and asked the trial court to declare that Picasso remains a CARF
director, remove the individual defendants as directors and
appoint provisional directors. Picasso also alleged Merida
misappropriated CARF assets.
      In conjunction with his action Picasso recorded a lis
pendens on the CARF real properties to prevent their sale. To
further prevent Merida from selling the CARF real properties, in
July 2017 Picasso and Jeannel created a new corporation called
Calhousing Foundation. Without notice to Merida they
transferred one of the CARF properties to Calhousing in October
2017 and then transferred it back to CARF a week later. The
parties’ lawyers later negotiated an agreement to sell the CARF
properties before trial with the proceeds deposited in escrow, to
be released after “the end of this case.”4 Picasso alleged Merida
and his attorney breached the settlement agreement and
pocketed the money from the escrow accounts.

    E. Trial and Statement of Decision
       The court held a two-day bench trial on Picasso’s action in
November 2019. No court reporter was present. Merida did not
attend and did not testify. Four witnesses testified: Picasso,
Jeannel, William and Edwin Jacinto. Their testimony is
summarized in the Settled Statement on appeal. After the close
of evidence the trial court granted defendants’ oral motion for
nonsuit as to CARF on the misappropriation cause of action.

4     This information is included in the parties’ Settled
Statement. However, the negotiated agreement referenced in the
Settled Statement was not included in the record on appeal.

                                 7
       On March 4, 2020, the trial court issued a tentative
statement of decision concluding Picasso’s term of office as a
director ended on June 6, 2017, which was before Picasso filed his
complaint, and he therefore lacked standing to sue. Picasso
objected to the tentative statement on a variety of grounds,
including the court’s failure to address the legality of the
January 4, 2016 unnoticed special meeting at which the
purported new board was elected. Picasso argued there were
three CARF directors when the meeting occurred but only one
(Merida) was present and under those circumstances the board
created on January 4, 2016 was not properly authorized to act for
CARF in any capacity, including removing a director.
       In its final statement of decision, the trial court did not
discuss the January 2016 special meeting. Instead the court
noted CARF’s bylaws allowed a director to be removed without
cause and stated “even if [Picasso] was a director as of June 6th,
2017, his term of office had ended, and he was not present to
express his desire to be re-elected to the board” when the new
board held an annual meeting (on June 6, 2017) and voted to
remove any directors who were not present. The court also
rejected Picasso’s lack of notice arguments finding Picasso, as a
board member, “knew, or should have known, when and where
board meetings were to take place” but played “no role” in CARF
from February 2016 through June 2017.
       On May 5, 2020, the trial court entered judgment on its
final Statement of Decision. Picasso timely appealed.

                                8
                          DISCUSSION

      A. Standard of Review
      To the extent the facts are undisputed a trial court’s
interpretation of organizational bylaws is “a question of law
subject to independent review on appeal,” applying usual rules of
contract and statutory interpretation. (Smith v. Adventist Health
System/West (2010) 182 Cal.App.4th 729, 754-755 [medical staff
bylaws]; accord Concord Christian Center v. Open Bible Standard
Churches (2005) 132 Cal.App.4th 1396, 1408 (Concord Christian
Center) [church bylaws]; Singh v. Singh (2004) 114 Cal.App.4th
1264, 1294 [corporate bylaws]; Sanchez v. Grain Growers Assn.
(1981) 126 Cal.App.3d 665, 672 (Sanchez) [nonprofit agricultural
cooperative association bylaws].) “By-laws should be so
construed as to sustain their validity if possible.” (Olincy v. Merle
Norman Cosmetics, Inc. (1962) 200 Cal.App.2d 260, 272 (Olincy).)
      A party’s standing to sue is likewise a question of law “‘“to
which we typically apply a de novo standard of review.”’” (A.J.
Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th
677, 687, quoting California DUI Lawyers Assn. v. Department of
Motor Vehicles (2018) 20 Cal.App.5th 1247, 1258.)
      Because the facts relevant to standing and interpretation of
the bylaws here are undisputed, we review de novo the trial
court’s determination that Picasso was not a director and lacked
standing to sue. “To the extent our determination of this
question depends on the judicial interpretation of the articles of
incorporation, bylaws, and other governing documents . . ., we
must apply neutral principles of law de novo. [Citations.]”
(Concord Christian Center, supra, 132 Cal.App.4th at p. 1408.)

                                 9
       B. Relevant Bylaw Provisions
       CARF’s bylaws contain the following provisions relevant to
this appeal:
       Corporate office location. Article 1 Section 1 designates
CARF’s “principal location for the transaction of its business” as
2975 Wilshire Boulevard, Suite One, Los Angeles, California
90010.
       Board terms and elections. Article 4 Section 4 (“Terms
of Office”) states: “Each Director shall hold office until the next
annual meeting for election of the Board of Directors as specified
in these Bylaws, and until his or her successor is elected and
qualifies.”
       Meeting location. Article 4 Section 7 (“Place of
Meetings”) states: “Meetings shall be held at the principal office
of the corporation unless otherwise provided by the Board or at
such place within or without the State of California which has
been designated form [sic] time to time by resolution of the board
of Directors. In the absence of such designation, any meeting not
held at the principal office of the corporation shall be valid only if
held on the written consent of all Directors given either before or
after the meeting and filed with the Secretary of the corporation
or after all Board members have been given written notice of the
meeting as hereinafter provided for special meeting of the Board.
Any meeting, regular or special, may be held by conference
telephone or similar communicating equipment, so long as all
Directors participating in such meeting can heard [sic] one
another.”
       Time and date of meetings. Article 4 Section 8 (“Date
and Time of Regular and Annual Meeting”) states: “Regular
meetings of Directors shall be held on the first of each month at

                                  10
pending time unless such day falls on a legal holiday, in which
event the regular meeting shall be held at the same hour and
place on the next business day.” “The annual Directors meeting
will be held on the First Tuesday in June of every year at 10:00
a.m. If this day is a legal holiday, the meeting will be held on the
next day. This meeting is for the purpose of electing directors
and for transacting any other necessary business. Director [sic]
shall be elected by the Board of Directors. . . .”
       Special meetings. Article 4 Section 9 (“Special Meetings”)
states: “Special Meetings of the Board of Directors may be called
at any time and for any purpose. These meetings may be called
by either the president or the board of directors or upon request
of 25% percent [sic] of the Directors of the corporation. The
request for a special meeting must be made in writing which
states the time, place and purpose of the meeting. The request
should be given to the secretary, with copy to the registered agent
of the corporation, who will prepare and send written notice to all
Directors of record who are entitled to vote at the meeting.”
       Notice of meetings. Article 4 Section 10 (“Notice of
Meetings”) states: “Regular meetings of the Board may be held
without notice. Special meetings of the Boards [sic] shall be held
upon four (4) days’ notice by first-class mail or forty-eight
(48) hours’ notice delivered personally or by telephone or
telegraph. . . .” Article 4 Section 11 (“Contents of Notice”) states:
“Notice of meeting not herein dispensed with shall specify that
place, day and hour of the meeting. . . .”
       Article 4 Section 12 (“Waiver of Notice and Consent to
Holding Meetings”) states: “The transactions of any meeting of
the Board, however called and notice or wherever held, are as
valid as though the meeting had been duly held after proper call

                                 11
and notice, provided a quorum, as hereinafter defined, is present
and provided that either before or after the meeting each Director
not present signs a waiver of notice, a consent to holding the
meeting, or an approval of the minutes thereof. All such waivers,
consents, or approvals, shall be filed with the corporate records or
made part of the minutes of the meeting.”
       Quorum. Article 4 Section 13 (“Quorum for the Meetings”)
states: “A quorum consist [sic] of two Directors.”
       The same section provides: “Except as otherwise provided
in these Bylaws or in the Articles of Incorporation of this
corporation, or by law, no business shall be considered by the
Board at any meeting at which a quorum, as hereinafter defined,
is not present, and the only motion which the Chair shall
entertain at such meeting is a motion to adjourn from time to
time until the time fixed for the next regular meeting of the
Board.”
       Article 4 Section 14 (“Majority Action as board Action”)
specifies that “Every act or decision done or made by a majority of
the Directors present at a meeting duly held at which a quorum
is present is the act of the Board of Directors.”
       The bylaws also provide meetings “shall be governed by
Robert’s’ [sic] Rules of Order, as such rules may be revised from
time to time,” to the extent not in conflict with CARF’s bylaws
and articles of incorporation or other provisions of law. Robert’s
Rules of Order provides that “In the absence of a quorum, any
business transacted . . . is null and void.” (Robert’s Rules of
Order (2020) § 40:6, p. 330.)
       Removal of directors. Article 4, Section 17 states: “If
this corporation has no members, Directors may be removed
without cause by a majority of the Directors of the office. [¶]

                                12
Vacancies on the Board may be filled by approval of the Board or,
if the number of Directors, then in office is less than a quorum, by
(1) the unanimous written consent of the Directors then in office,
(2) the affirmative vote of a majority of the meeting held
pursuant to notice or waivers of notice complying with this
Article of these Bylaws, or (3) a sole remaining Director.”

       C. The January 4, 2016 Special Meeting and Election
          of New Board Members Occurred in Violation of
          the Bylaws
       Our inquiry begins with this threshold question: Was the
January 4, 2016 special meeting and election of new board
members valid under CARF’s bylaws?
       Picasso asserts the January 2016 special meeting was
invalid because it violated the quorum and notice provisions of
CARF’s bylaws and contends all subsequent corporate activity
conducted by the new board was unauthorized. Specifically he
argues the trial court improperly ignored the legal significance of
Merida’s failure to give the only other board members (Picasso
and Jeannel) notice or obtain a quorum for the January 4, 2016
special meeting during which the new board members were
purportedly elected. According to Picasso, because the special
meeting failed to comply with CARF’s bylaws the meeting was a
nullity and nothing that occurred at that meeting had any legal
significance, including the election of the new board members.
The domino effect is that all the subsequent acts of the purported
new board members, including the removal of the directors who
were not present at the June 2017 annual meeting, were
similarly invalid. We agree.
       In interpreting bylaws, as with any statutory or contract
interpretation, we begin with the words themselves, giving them

                                13
‘“their usual and ordinary meaning.”’ (Spielman v. Ex’pression
Center for New Media (2010) 191 Cal.App.4th 420, 428; see
Sanchez, supra, 126 Cal.App.3d at p. 672 [“‘It is generally
accepted that corporate bylaws are to be construed according to
the general rules governing the construction of statutes and
contracts”’].) Where the language of a provision is “‘‘“clear and
unambiguous there is no need for construction, and courts should
not indulge in it.”’’ [Citations.]” (Spielman, at p. 248; see People
ex rel. Lockyer v. R.J. Reynolds Tobacco Co. (2003) 107
Cal.App.4th 516, 524 [“‘In interpreting an unambiguous
contractual provision we are bound to give effect to the plain and
ordinary meaning of the language used by the parties.’
[Citation.] Thus, where “‘contract language is clear and explicit
and does not lead to absurd results, we ascertain intent from the
written terms and go no further.’” [Citation.]”].)

             1. No notice of the special meeting time and location
                was provided to Picasso, and the meeting location
                was not held at CARF’s principal location as
                required under the bylaws
      It is undisputed Picasso received no notice of the
January 4, 2016 special meeting and only learned about the
meeting after the fact. Although the bylaws permit special
meetings to be called for any purpose by “the president or the
board of directors or upon request of 25% percent [sic] of the
Directors of the corporation,” the bylaws also plainly require
“written notice to all Directors of record who are entitled to vote
at the meeting” stating “the time, place and purpose of the
meeting.” Notice of special meetings must be provided four days
in advance by first-class mail or 48 hours in advance if “delivered
personally or by telephone or telegraph.” Merida provided no

                                 14
notice whatsoever regarding the special meeting he attempted to
convene, which was a clear violation of the bylaws.
       Merida also held the January 4, 2016 special meeting at his
own office, not at CARF’s principal location, in violation of the
requirement that board meetings be held “at the principal office
of the corporation unless otherwise provided by the Board” or
designated “from time to time” by board resolution.
       The only exception to the notice requirements under the
bylaws is that meeting transactions “are as valid as though the
meeting had been duly held after proper call and notice” if (1) a
quorum, as defined under the bylaws, is present at the meeting
and (2) “each Director not present signs a waiver of notice, a
consent to holding the meeting, or an approval of the minutes
thereof.” Similarly, the only exception to the location
requirements is that “any meeting not held at the principal office
of the corporation shall be valid only if held on the written
consent of all Directors” (or, for special meetings, “after all Board
members have been given written notice” of the special meeting
as set forth above).
       A two-director quorum was not present at the special
meeting, as discussed further below. Picasso received no notice of
the time, location or purpose of the special meeting and those
directors not present (i.e. Picasso and Jeannel) did not sign a
waiver of notice, give written consent to the meeting or approve
the minutes. Thus, the notice and location violations were not
waived or ratified.

           2. No quorum was present for the January 4 , 2016
              special meeting, as required under the bylaws
     CARF’s bylaws plainly state that a quorum for a board
meeting consists of “two Directors” and that “no business shall be

                                 15
considered” absent a quorum. If the board of directors convenes
without a quorum, the votes of any directors present are
“insufficient to hold a legal meeting or pass any resolution.”
(Olincy, supra, 200 Cal.App.2d at p. 273 [where four directors
were required for quorum, group of three could not amend
bylaws; purported amendment was “void and hence cannot afford
a foundation for anything done” at later meeting]; see 62
Ops.Cal.Atty.Gen. 698, 699 (1979) [“A quorum is the minimum
number of members who must be present at a meeting for
business to be legally transacted”].) “[T]he purpose of quorum
requirements is to insure a right of consultation to minority
interests and not to give to those minorities a veto power which
can be used to paralyze the management of a corporation and
frustrate the will of the majority of shareholders or directors.”
(American Center for Education, Inc. v. Cavnar (1978) 80
Cal.App.3d 476, 496, fn. 10 (American Center for Education);
accord Grimm v. City of San Diego (1979) 94 Cal.App.3d 33, 39
[“‘The requirement of a quorum is a protection against totally
unrepresentative action in the name of the body by an unduly
small number of persons’”], quoting Robert’s Rules of Order (rev.
ed. 1970) p. 16.)
      It is undisputed that, after Vela’s death on January 3,
2016, Picasso, Jeannel and Merida were the only existing CARF
directors of record. It is also undisputed that the only director in
attendance at the January 4, 2016 special meeting was Merida.
One out of three directors is not a valid quorum under the CARF
bylaws and is insufficient to conduct business. Under the
unambiguous and plain language of the CARF bylaws, the
January 4, 2016 special meeting and purported election of new

                                 16
board members violated the quorum, notice and location
requirements of the bylaws.

             3. Because the January 4, 2016 special meeting
                violated CARF’s bylaws, the purported election of
                new board members at the meeting was void
      Because there was not a quorum and notice to all board
members, or a subsequent ratification, there was no “duly held”
“special meeting” on January 4, 2016. Under the bylaws,
“Vacancies on the Board may be filled by approval of the Board”
but only an “act or decision done or made by a majority of the
Directors present at a meeting duly held at which a quorum is
present is the act of the Board of Directors.” (Accord, Corp. Code,
§ 307, subd. (a)(8); cf. American Center for Education, supra, 80
Cal.App.3d at p. 488, fn. 5 [noting other “courts have held that
the words ‘duly assembled’ require that each director either have
received or waived notice”].) Without a valid meeting, there was
no legitimate “act of the Board of Directors” to approve new board
members.
      Respondents’ argument that CARF was historically
accustomed to informally conducting its board meetings and
organizational governance does not alter this court’s conclusion.
Merida asserts that Vela, as Secretary of CARF, called informal
board meetings by phone as needed rather than hold monthly
meetings. However, even nonprofits that dispense with certain
corporate formalities and function like a closely held corporation
must still meet quorum requirements for board action to be valid.
(See American Center for Education, supra, 80 Cal.App.3d at pp.
488, 490-491 [“Meetings of boards of directors are valid where it
has become customary for the board to convene such meetings
without notice but with a quorum present”], italics added.)

                                17
       Respondents argue, as they did in the trial court, that
Article 4, Section 17 of the bylaws has a provision permitting “a
sole remaining Director” to fill vacancies on the board without a
quorum. When read in context, the “sole remaining Director”
provision is an exception that is plainly not applicable here. In
full, the subsection reads: “Vacancies on the Board may be filled
by approval of the Board or, if the number of Directors then in
office is less than a quorum, by (1) the unanimous written consent
of the Directors then in office, (2) the affirmative vote of a
majority of the meeting held pursuant to notice or waivers of
notice complying with this Article of these Bylaws, or (3) a sole
remaining Director.” (Italics added.)
       It is unambiguous under the CARF bylaws that two
members of the board constitute a quorum for the purpose of
conducting board business. It is also undisputed that three
individuals—Picasso, Merida and Jeannel—were the directors of
record at the time of the January 4, 2016 special meeting, one
more than needed for a quorum. Therefore, the enumerated
alternative options for filling board vacancies when “the number
of Directors then in office is less than a quorum” do not apply.
Merida may have been the sole director in attendance at the
special meeting, but he was not the “sole remaining Director” in
office and had no authority to unilaterally elect new board
members.
       We agree with Picasso that Merida’s individual action at
the special meeting, without a quorum or notice to the other
directors of record, was a nullity. Without a quorum the
purported election of new board members at the January 4, 2016
special meeting “was void and hence cannot afford a foundation

                               18
for anything done” thereafter. (Olincy, supra, 200 Cal.App.2d at
p. 273.)
             4. Picasso’s role as a CARF board member did not
                end on June 6, 2017, and he has standing to sue
       Despite Picasso’s specific objections to the tentative
statement of decision, the trial court did not directly address the
question of the validity of the January 4, 2016 special meeting
and election.5 Rather, it concluded that “even if he was a director
as of June 6th, 2017, his term of office had ended, and he was not
present to express his desire to be re-elected to the board” when
the new board held an annual meeting and voted to remove any
directors who were not in attendance. The trial court also
emphasized Picasso “ceased any participation in board matters”
and “‘played no role’ in CARF from February 2016 through June
2017.”
       Standing to pursue claims against directors of a nonprofit
corporation is circumscribed by statute. (See, e.g., Corp. Code,
§§ 5142, 5223, 5233.) “Corporations Code section 5233,
subdivision (c), . . . provides that a director of a nonprofit
corporation may ‘bring an action’ to address self-dealing by

5      Although “[a] judgment or order of a lower court is
presumed to be correct on appeal, and all intendments and
presumptions are indulged in favor of its correctness” (In re
Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133 (Arceneaux)),
when a party has filed timely objections to a trial court’s
tentative decision, the doctrine of implied findings will not apply,
and the reviewing court will not infer that the trial court decided
facts or issues not addressed in the statement in favor of the
prevailing party. (Code Civ. Proc. § 634; Fladeboe v. American
Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58-59; Arceneaux, at
p. 1133.)

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another director; section 5142, subdivision (a), . . . provides that a
director of a nonprofit corporation may ‘bring an action to . . .
remedy a breach of a charitable trust’; and section 5223,
subdivision (a), . . . authorizes the superior court, ‘at the suit of a
director’ of a nonprofit corporation, to remove another director
for, among other things, fraud, dishonesty, or gross abuse of
authority.” (Summers v. Colette (2019) 34 Cal.App.5th 361, 365-
366 (Summers).)
       Picasso’s standing to sue depends on whether he was a
director on June 17, 2017, when he filed his complaint. (See
Summers, supra, 34 Cal.App.5th at p. 374 [nonprofit director
indisputably had standing under Corporations Code sections
5233, 5142, and 5223 at the time she instituted the action, and
could continue the action even though she was subsequently
removed]; cf. Turner v. Victoria (2021) 67 Cal.App.5th 1099,
review granted Nov. 10, 2021, ___ Cal.___ (S271054) [nonprofit
director had standing to sue under statutes for breach of a
charitable trust, self-dealing transactions, and removal from
office for misconduct but lost standing to continue the action once
her term expired and she was not reelected], declining to follow
Summers, supra, 34 Cal.App.5th 361, on question of removal
after initiating an action.)
       The CARF bylaws provide, in the conjunctive, that “Each
Director shall hold office until the next annual meeting for
election of the Board of Directors as specified in these Bylaws,
and until his or her successor is elected and qualifies.” (Italics
added.) Article 4, Section 17 also provides that “Directors may be
removed without cause by a majority of the Directors of the
office.” CARF’s bylaws do not state that board member terms
automatically expire on an annual basis unless renewed, and we

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decline to read such an interpretation into the bylaws where none
exists. The plain and commonsense construction of the CARF
bylaws is that board members serve on an ongoing year-to-year
basis until a successor is validly elected or they are removed by a
valid majority vote of the board, neither of which occurred here.
      The trial court’s judgment was based on its view that the
June 17, 2017 board meeting, and the board action to remove
directors who were not in attendance at that meeting, were valid
under the CARF bylaws. We disagree. Whether the new board
was authorized to conduct any business after the January 4, 2016
special meeting, including the removal of absent board members,
depends on the legal validity of the special meeting and whether
the election of new board members at that meeting was
authorized. (See American Center for Education, Inc. v. Cavnar
(1972) 26 Cal.App.3d 26, 34, fn. 7 [whether a new board member
counts toward quorum depends on the validity of that new board
member’s disputed election at a previous meeting].) Where, as
here, the election of directors is unauthorized, “[i]t follows, then,
that all acts of the purported [] board of directors were
unauthorized and consequently a nullity.” (Guardian Angel
Polish Nat. Catholic Church of L.A., Inc. v. Grotnik (2004) 118
Cal.App.4th 919, 927 [parish board of directors’ failure to obtain
diocesan approval of board election made purported board’s
subsequent acts unauthorized and invalid].) “The parties thus
are restored to the status quo ante.” (Ibid.)

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                        DISPOSITION

     The trial court’s judgment is reversed and remanded for a
new trial. Picasso is to recover his costs on appeal.

                                   WISE, J.*

We concur:

     SEGAL, Acting P. J.

     FEUER, J.

*     Judge of the Alameda County Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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