Ellen Taft And Arthur Champernowne, Apps. v. Central Co-op/george Arnett, Res.
73917-4
| Wash. Ct. App. | Dec 27, 2016Background
- Central Co-op, a nonprofit grocery cooperative in Seattle, has bylaws (bylaw 2.9) allowing the Board to involuntarily terminate a membership for cause after providing written notice of the reasons and an opportunity to respond.
- In 2013 Taft confronted staff/customers about dogs she suspected were not service animals; staff told her they could not question customers about service animals. A customer submitted a complaint alleging Taft angrily confronted him on November 14, 2013.
- Manager Peterson spoke with Taft July 3, 2013 (warning her not to approach staff/customers about service animals), and called December 6, 2013 to say she was no longer welcome and that a letter would follow; Taft says she never received that letter.
- The Board sent an April 28, 2014 letter offering Taft until May 18 to provide a written explanation before voting; the Board later voted to terminate and notified Taft by a June 25, 2014 letter describing incidents including June 27 and November 14, 2013.
- Taft sued, alleging the Board violated the bylaws by terminating her membership without providing written notice of the reasons (specifically the alleged "repeated" violations) and an opportunity to respond; the trial court granted summary judgment for Central Co-op.
- The Court of Appeals reversed and remanded, holding genuine issues of material fact exist about whether the cooperative provided written notice of the "repeated" violations in compliance with the bylaws.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the co-op complied with bylaw 2.9's requirement of "written notice of the reasons for the proposed termination" and opportunity to respond before terminating membership | Taft: she never received written notice identifying the "repeated" violations; the April 28 letter did not specify the repeated violations and she never received the December undated letter Peterson claimed to have sent | Central Co-op: April 28 letter (and Peterson's undated letter) provided adequate written notice and opportunity to respond; termination followed bylaws | Reversed summary judgment — there are genuine material factual disputes about whether notice complied with the bylaws, so case must be remanded for trial |
| Whether Taft waived reliance on factual disputes by filing a cross-motion for summary judgment | Co-op: cross-motion precludes arguing material-fact issues on notice | Taft: she moved in the alternative and preserved factual-dispute argument | Court: rejected Co-op's Pleasant-based argument and treated Taft's alternative arguments as preserved |
| Standard of review for membership termination (business judgment deference) | Taft: bylaws create contractual notice rights; compliance is a factual inquiry not shielded by deference | Co-op: Board's decision should be respected under business judgment rule | Court: business judgment rule does not bar inquiry into whether bylaws' notice requirement was met; applied ordinary summary judgment review |
| Whether notice sufficiency is a question of fact or law | Taft: reasonableness and adequacy of notice depends on circumstances — question of fact | Co-op: notice was adequate as a matter of law | Court: adequacy of notice is ordinarily a question of fact; summary judgment inappropriate where disputes exist |
Key Cases Cited
- Pleasant v. Regence BlueShield, 181 Wn. App. 252 (discussed cross-motion effect on arguing factual disputes)
- Citizens Alliance for Property Rights Legal Fund v. San Juan County, 184 Wn.2d 428 (standard of review for summary judgment)
- Keck v. Collins, 184 Wn.2d 358 (view evidence and inferences in light most favorable to nonmoving party)
- Scrivener v. Clark College, 181 Wn.2d 439 (summary judgment standard)
- Associated Petroleum Products, Inc. v. Northwest Cascade, Inc., 149 Wn. App. 429 (reasonableness of notice is ordinarily a question of fact)
- Langan v. Valicopters, Inc., 88 Wn.2d 855 (bylaws as contract between organization and members)
- Roats v. Blakely Island Maintenance Commission, 169 Wn. App. 263 (apply contract principles to bylaws)
- Scott v. Trans-Sys., Inc., 148 Wn.2d 701 (business judgment rule does not preclude judicial review of bylaw compliance)