515 P.3d 572
Wyo.2022Background
- Gerry Spence founded the Trial Lawyers College (a Wyoming nonprofit). Tensions arose among board members between a "Spence Group" and a "Sloan Group."
- April 13, 2020: at a board meeting Spence asked Dana Cole and Mel Orchard to resign; Cole verbally said he would; Spence's foundation terminated the College's lease and prohibited use of Spence's name.
- May 6, 2020: President Sloan called a special meeting to amend the bylaws (reduce board size) and elect directors; a 6–4 vote (Sloan Group majority) passed the bylaw amendment and reelected the Sloan Group.
- June 22, 2020: the Spence Group filed a derivative action challenging certain directors (arguing Cole had resigned and Chaloupka’s prior election was invalid) and seeking removal of Sloan Group directors; district court consolidated that case with a pending dissolution action for discovery and later for all purposes.
- District court: held Cole’s verbal resignation ineffective, barred Spence’s challenge to Chaloupka by laches/ratification, found the bylaw change/election valid, concluded no Spence Group member remained a director at filing of the derivative suit, and dismissed the derivative claim for lack of statutory standing; denied equitable relief as alternative.
- Wyoming Supreme Court converted the appeal to a writ of review (no W.R.C.P. 54(b) certification) and affirmed dismissal and denial of equitable relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Appealability of dismissal of derivative claim (consolidated cases) | Spence: appeal should proceed | Sloan: Rule 54(b) required; no appealable final order | Court: no 54(b); converted appeal to writ of review and exercised discretion to hear it |
| 2. Was Dana Cole’s oral April 13 resignation effective? | Spence: oral statement was sufficient | Sloan: statute requires written notice; oral ineffective | Court: oral resignation may be effective in rare circumstances, but Cole’s statements + conduct were ambiguous; resignation ineffective |
| 3. Was Maren Chaloupka’s 2015 election invalid? | Spence: election by email without full compliance left her at most de facto director | Sloan: board ratified and accepted her service; challenges are barred | Court: her election was effectively ratified and Spence Group’s delay barred challenge (ratification/laches) |
| 4. Did Spence Group remain as "holdover" directors so they had standing to bring derivative suit? | Spence: holdover status continues until successor elected; no successor so they remained directors | Sloan: amendment + election reduced board and replaced directors; Spence Group lost holdover status | Court: election decreased board to lawful size; holdover status ended; no Spence director at filing, so statutory derivative standing lacking; equitable derivative relief denied |
Key Cases Cited
- Miller v. Sweetwater Cnty. Sch. Dist. #1, 500 P.3d 242 (Wyo. 2021) (standard of review for summary judgment)
- Thornock v. PacifiCorp, 379 P.3d 175 (Wyo. 2016) (no deference on legal rulings; summary judgment review)
- Kemmer v. Newman, 387 P.3d 131 (Idaho 2016) (interpretation of director resignation provision under similar statute)
- Nevins v. Bryan, 885 A.2d 233 (Del. Ch. 2005) (ratification, laches, and estoppel bar to challenging board composition)
- Hockessin Cmty. Ctr., Inc. v. Swift, 59 A.3d 437 (Del. Ch. 2012) (oral resignation requires clear, unambiguous intent and consistent subsequent conduct)
- Hall v. Hall, 138 S. Ct. 1118 (U.S. 2018) (effect of consolidation on appealability)
