Court Opinion

ID: 4275584
Source: CourtListenerOpinion
Date Created: 2018-05-16 15:06:17.264154+00
Date Added: 2024-06-11T14:06:46.423204
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                              FOURTH DISTRICT

   FLORIDA RESEARCH INSTITUTE FOR EQUINE NURTURING,
DEVELOPMENT AND SAFETY, INC., a Florida not for profit corporation,
                       Appellant,

                                      v.

           DANA DILLON and ROBERT DILLON, individually,
                            Appellees.

                               No. 4D17-605

                               [May 16, 2018]

   Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Carlos A. Rodriguez, Judge; L.T. Case No. CACE13-
024657.

   Thomas H. Loffredo and Rebecca A. Rodriguez of Gray|Robinson, P.A.,
Fort Lauderdale, and Kristie L. Hatcher-Bolin of Gray|Robinson,
Lakeland, for appellant.

   Bruce H. Little of Bruce H. Little, P.A., Fort Lauderdale, for appellees.

GERBER, C.J.

   A corporation, organized to provide horse rescue services, appeals from
the circuit court’s final judgment, after a non-jury trial, in favor of a wife
and husband arising from their alleged membership rights in the
corporation. The corporation primarily argues that the trial court erred in
two respects: (1) by concluding that the corporation illegally terminated
the wife’s membership in the corporation without affording her notice and
a hearing; and (2) by finding that the husband was a member of the
corporation at the time he demanded to inspect the corporation’s corporate
records. On the first argument, we agree with the corporation and reverse
as to the wife’s action. On the second argument, we disagree with the
corporation and affirm without discussion as to the husband’s action.

    We present the circuit court’s findings of fact in the final judgment as
to the wife’s action to the extent such findings are supported by competent,
substantial evidence. See Acoustic Innovations, Inc. v. Schafer, 976 So. 2d
1139, 1143 (Fla. 4th DCA 2008) (“When a decision in a non-jury trial is
based on findings of fact from disputed evidence, it is reviewed on appeal
for competent, substantial evidence.”). Other record facts are included
below where necessary to provide a complete picture of the material facts.

                           Procedural History

   The corporation was formed as a not for profit charitable organization
under chapter 617, Florida Statutes (governing not for profit corporations).
Persons can become member sponsors of the corporation essentially by
completing a membership application, paying a membership fee, being
approved for membership, and paying recurring contributions towards the
care of a horse or horses which the member is sponsoring.

   The corporation was governed by a board of directors, sometimes
referred to as the board of trustees. The corporation was operated
according to a set of bylaws and a set of rules. The corporation’s original
bylaws provided that the board could remove a member by providing
written notice to the member of a hearing, at which the board could remove
the member for cause. The corporation later amended its bylaws to delete
the requirements of notice and a hearing before the board could remove a
member for cause. The amended bylaws provide, in pertinent part:

      The Board of Trustees may suspend or expel a member . . . for
      “just cause” after a vote is held at any regular, special or
      emergency meeting if deemed in the best interest of the
      organization, the horses or the general membership.
      Management may enforce the termination of membership if
      the member has received a prior verbal and written warning
      as stated in the Rules and Regulations. Should there be a
      vote of the Board of Trustees to terminate a member, and that
      vote is unanimous, when they terminate this member, then
      that member becomes ineligible for reinstatement.

   The corporation’s rules provide, in pertinent part:

      Membership termination is at the discretion of management
      and the Board of Directors.

      ...

      Any member/sponsor, who we determine has intentionally
      tried to undermine the organization, the Board of Directors or
      Management will terminate their membership immediately and
      without warning.

                                     2
  The bylaws amendment and rules existed before the wife became a
member of the corporation.

    After the wife became a member of the corporation, she received
multiple verbal and written warnings for various rules violations. Despite
these warnings, the wife ultimately sent an e-mail to someone outside of
the corporation, accusing the corporation of a variety of misdeeds, and
alleging, among other things, “[The corporation] is as corrupt as you can
imagine.”

    After the corporation’s board became aware of the wife’s accusatory e-
mail, the board set an emergency meeting without providing notice to the
wife. At the meeting, the board unanimously voted to terminate the wife’s
membership for cause. The corporation sent the wife a letter notifying her
of the termination.

   The wife brought a declaratory judgment action against the
corporation. The wife alleged, among other things, that the board did not
legally terminate her membership because the board did not provide her
with notice and a hearing before terminating her membership.

   In its answer, the corporation alleged that it terminated the wife’s
membership “pursuant to a fair and reasonable procedure carried out in
good faith.” The corporation alleged that the wife had violated the
corporation’s rules and ignored the corporation’s directions to comply with
the rules before the corporation terminated her after multiple violations.

   After a non-jury trial, the trial court entered a final judgment in the
wife’s favor. The trial court reasoned, in pertinent part:

          The termination of any member of [the corporation] is
      governed by Florida Statute § 617.0607, which dictates that a
      member may not be expelled or suspended and that a
      membership of a corporation may not be terminated or
      suspended except pursuant to a procedure that is fair and
      reasonable and carried out in good faith. The statute was
      obviously designed to comply with constitutional due process
      of law and notice requirements.

         ...

         The changes in the By-Laws affected the requirement of a
      hearing, but both the [original] and [amended] By-Laws

                                    3
required “just cause” for removal of any member.
Procedurally, the determination of whether there is just cause
must be “fair and reasonable” by statute which legislates that
some measure of due process must occur. The [amended] By-
Laws do not establish a procedure for removal that is “fair and
reasonable.”

   No emergency existed for the termination of [the wife’s]
membership without notice, a hearing and the opportunity to
be heard as required by a reasonable interpretation of the By-
Laws, and strict interpretation of Florida law and due process.

   ...

   Pursuant to Florida law, and [the corporation’s] By-Laws,
and constitutional due process of law, [the corporation] was
required to provide a fair and reasonable procedure for the
termination of [the wife’s] membership after they decided to
terminate or initiated the process.

    [The wife’s] membership was never effectively terminated;
and therefore, the Court determines her to still be a member
of [the corporation].

   ...

   In reaching a decision in this case . . . , the Court
considered and applied . . . sec. 617.0607[,] Florida Statute[s].
A similar case considered and applied by the Court was La
Gorce Country Club v. Cerami, 74 So. 2d 95 (Fla. 1954). In
Cerami, a member of a private club was terminated under a
similar By-Law provision without a hearing and at the sole
discretion of the Board. The Supreme Court affirmed the trial
court in compelling his reinstatement based on the due
process requirement that he be afforded a hearing.

   ...

   The Court finds in favor of [the wife] as to her declaratory
action and determines that her membership was not
reasonably, fairly or legally terminated and therefore, she
continues to be a member of [the corporation].

                               4
         The [corporation], . . . the Board or individual members are
      hereby ordered to provide all the benefits and obligations of
      membership in [the corporation] to [the wife] and to refrain
      from involuntarily terminating the membership of [the wife]
      without first according her notice and a hearing which
      comports with Fla. Stat. § 617.0607 and the minimum
      standards of due process of law . . . .

                                Our Review

   This appeal followed. The corporation argues that the trial court
misapplied the applicable law and relied upon an inapplicable legal
standard in ruling that the wife’s membership was unreasonably and
unlawfully terminated. More specifically, the corporation argues the trial
court erred by ruling that the corporation’s membership termination
procedures were invalid based upon a purported due process violation.

    To the extent the trial court’s final judgment was based upon its legal
conclusion that the corporation’s application of the bylaws violate due
process, our review is de novo. See Acoustic Innovations, 976 So. 2d at
1143 (“[W]here a trial court’s conclusions following a non-jury trial are
based upon legal error, the standard of review is de novo.”); Natiello v.
Winn-Dixie Stores, Inc., 203 So. 3d 209, 210 (Fla. 4th DCA 2016) (“[T]he
issue of whether a party has been denied procedural due process is
reviewed de novo.”); Retreat at Port of Islands, LLC v. Port of Islands Resort
Hotel Condo. Ass’n, Inc., 181 So. 3d 531, 532 (Fla. 2d DCA 2015)
(“[O]rganizational bylaws are treated as contracts, and we review
construction of those bylaws de novo.”).

   We agree with the corporation’s arguments regarding its termination of
the wife’s membership for three reasons:

   1. the plain language of section 617.0607(1), Florida Statutes (2013),
      does not require notice and a hearing before a not for profit
      corporation terminates a member;

   2. the corporation’s bylaws and rules set forth an expulsion and
      termination procedure “that is fair and reasonable and [was] carried
      out in good faith” under section 617.0607(1); and

   3. the case upon which the trial court primarily relied, La Gorce
      Country Club v. Cerami, 74 So. 2d 95 (Fla. 1954), is inapplicable.

We address each reason in turn.

                                      5
   1. Plain Language

    First, the plain language of section 617.0607(1), Florida Statutes
(2013), does not require notice and a hearing before a not for profit
corporation terminates a member. Section 617.0607(1) states: “A member
of a [not for profit] corporation may not be expelled or suspended, and a
membership in the corporation may not be terminated or suspended,
except pursuant to a procedure that is fair and reasonable and is carried
out in good faith.” (emphasis added). If the legislature had intended that a
member of a not for profit corporation may not be expelled or suspended,
or that a membership in a corporation may not be terminated or
suspended, except pursuant to “notice and a hearing,” then the legislature
could have said so. Because the legislature has not said so, both we and
the trial court are without power to modify the statute to include the
requirement of notice and a hearing before a not for profit corporation
terminates a member. See Hill v. Davis, 70 So. 3d 572, 575-76 (Fla. 2011)
(“Courts are without power to construe an unambiguous statute in a way
which would extend, modify, or limit, its express terms or its reasonable
and obvious implications. To do so would be an abrogation of legislative
power. Thus, if the meaning of the statute is clear then this Court’s task
goes no further than applying the plain language of the statute.”) (internal
citations and quotation marks omitted).

   2. Fair, Reasonable, and Good Faith

   Second, the corporation’s bylaws and rules set forth an expulsion and
termination procedure “that is fair and reasonable and [was] carried out
in good faith” under section 617.0607(1). The bylaws provided, in
pertinent part:

      The Board of Trustees may suspend or expel a member . . . for
      “just cause” after a vote is held at any regular, special or
      emergency meeting if deemed in the best interest of the
      organization, the horses or the general membership.
      Management may enforce the termination of membership if
      the member has received a prior verbal and written warning
      as stated in the Rules and Regulations. Should there be a
      vote of the Board of Trustees to terminate a member, and that
      vote is unanimous, when they terminate this member, then
      that member becomes ineligible for reinstatement.

Further, the corporation’s rules provided, in pertinent part:

                                     6
      Membership termination is at the discretion of management
      and the Board of Directors.

      ...

      Any member/sponsor, who we determine has intentionally
      tried to undermine the organization, the Board of Directors or
      Management will terminate their membership immediately and
      without warning.

    The record evidence indicates that the corporation complied with this
fair and reasonable procedure and did so in good faith. The wife received
multiple verbal and written warnings for various rules violations. Despite
these warnings, the wife ultimately sent an e-mail to someone outside of
the corporation, accusing the corporation of a variety of misdeeds, and
alleging, among other things, “[The corporation] is as corrupt as you can
imagine.” This ultimate action, along with the wife’s prior conduct,
provided the board with “just cause” to find that the wife was intentionally
trying to undermine the organization, and justified the board’s unanimous
vote to terminate the wife’s membership.

   3. La Gorce’s Inapplicability

   Third, the case upon which the trial court primarily relied, La Gorce
Country Club v. Cerami, 74 So. 2d 95 (Fla. 1954), is inapplicable. In La
Gorce, our supreme court indeed concluded that a social club member was
entitled to notice and a hearing before being expelled from the club.
However, our supreme court reached that conclusion after finding that
“the present case is controlled by statute under which the club was
incorporated, namely F.S. § 617.10.” Id. at 97. Section 617.10 was
repealed in 1990 (effective in 1991), and was very different than the
current section 617.0607. Section 617.10 provided, in pertinent part:

         Social clubs or societies not for profit may be incorporated
      under this chapter; provided, however, that any such club or
      society may, in its by-laws:

         ...

         (2) Prescribe that an incorporator or member shall not
      have any vested right, interest or privilege of, in or to the
      assets, functions, affairs, or franchises of the corporation, or
      any right, interest or privilege which may be transferable or
      inheritable, or which shall continue after his membership

                                     7
      ceases, or while he is not in good standing; provided, that
      before his membership shall cease against his consent he shall
      be given an opportunity to be heard . . . .

(emphasis added).

   The current section 617.0607, which the trial court cited in its final
judgment, contains no such requirement that before a person’s
membership shall cease against that person’s consent, the person shall be
given notice and an opportunity to be heard. Instead, the current section
617.0607(1) states: “A member of a [not for profit] corporation may not be
expelled or suspended, and a membership in the corporation may not be
terminated or suspended, except pursuant to a procedure that is fair and
reasonable and is carried out in good faith.” (emphasis added). The trial
court’s conclusion, that this procedure requires notice and an opportunity
to be heard, finds no support in section 617.0607’s plain language or case
law.

                                Conclusion

    Based on the foregoing, we reverse the trial court’s final judgment to
the extent the trial court concluded that the corporation illegally
terminated the wife’s membership in the corporation without affording her
notice and a hearing. We remand for the trial court to enter a new final
judgment finding in the corporation’s favor on the wife’s declaratory action,
determining that the wife’s membership was reasonably, fairly, and legally
terminated, and that the wife ceased being a member of the corporation
when the corporation terminated her membership.                The new final
judgment shall not disturb the trial court’s findings of fact and conclusions
of law as to the husband’s action, which, in sum, were that although the
husband was a member of the corporation whose membership was never
terminated, the husband’s request to inspect the corporation’s records was
impermissibly vague and overbroad and, therefore, the corporation did not
improperly fail to respond to the request.

   Affirmed in part, reversed in part, and remanded for entry of new final
judgment consistent with this opinion.

DAMOORGIAN and KLINGENSMITH, JJ., concur.

                            *        *         *

   Not final until disposition of timely filed motion for rehearing.

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