114 So. 3d 817
Ala.2012Background
- Club operated youth facilities in Mobile County, including Fairhope and Daphne; these facilities had no separate legal existence from the Club.
- Gift of approximately 17 acres to the Club by B.R. Wilson, Jr. in 1996; the accompanying letter stated the gift was unrestricted and not conditioned on using funds in a particular way.
- In 2000, the Club sold the property and placed proceeds into three accounts, earmarked for Daphne and Fairhope facilities; operations in Daphne and Fairhope ended in 2009 due to deficits.
- On June 1, 2009, Daphne and Fairhope facilities were reopened by volunteers under independent management; Rotary Inc. and Wilson Inc. were later formed to operate those facilities.
- Rotary Inc. and Wilson Inc. sued the Club seeking declarations and injunctions related to the disposition of sale proceeds, arguing the funds were to benefit their facilities; trial court held funds held in trust for exclusive benefit of those facilities.
- The Club appealed, challenging Rotary Inc. and Wilson Inc.’s standing under the Alabama Nonprofit Corporation Act; court held Rotary Inc. and Wilson Inc. lacked standing and thus lacked subject-matter jurisdiction; judgment vacated and case dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue over proceeds disposition | Rotary/Wilson rely on Jones special-standing rule | Act governs standing; Rotary/Wilson lack authorized status | Rotary/Wilson lack standing; standing deficient |
| Effect of the Alabama Act on standing (trust enforcement) | Act preserves traditional standing for trusts | Act supersedes Jones; only certain parties may sue | Act supersedes Jones; no standing for Rotary/Wilson |
| Consequence of lack of standing on judgment | Judgment void for lack of subject-matter jurisdiction; case dismissed |
Key Cases Cited
- Jones v. Grant, 344 So.2d 1210 (Ala. 1977) (special-standing rule for charitable trusts limited to beneficiaries with a direct interest)
- Cook v. Lloyd Noland Foundation, Inc., 825 So.2d 83 (Ala.2001) (Act supersedes Jones for nonprofit corporations)
- Rhone v. Adams, 986 So.2d 374 (Ala.2007) (trust standing limits under revised authorities)
- Cook v. Lloyd Noland Foundation, Inc., 825 So.2d 83 (Ala.2001) (supersedes Jones; standing under Act)
- Ex parte Fort James Operating Co., 871 So.2d 51 (Ala.2003) (standing as jurisdictional requirement; subject-matter jurisdiction analysis)
- Pharmacia Corp. v. Suggs, 932 So.2d 95 (Ala.2005) (standing burden on plaintiffs; jurisdictional focus)
- Cadle Co. v. Shabani, 4 So.3d 460 (Ala.2008) (standing defined as requisite personal interest at litigation start)
- Blevins v. Hillwood Office Ctr. Owners’ Ass’n, 51 So.3d 317 (Ala.2010) (standing required for association disputes)
- Vann v. Cook, 989 So.2d 556 (Ala.Civ.App.2008) (void judgments rendered by court lacking jurisdiction)