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515 P.3d 572
Wyo.
2022
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Background

  • 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)
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Case Details

Case Name: Gerald L. Spence John Zelbst Rex Parris Joseph H. Low and Kent Spence, directly on their own behalf and derivatively on behalf of the Trial Lawyers College, a Wyoming Nonprofit Corporation v. John Sloan Milton Grimes Maren Chaloupka J.R. Clary, Jr. Dana Cole and Anne Valentine and the Trial Lawyers College, a Wyoming Nonprofit Corporation
Court Name: Wyoming Supreme Court
Date Published: Aug 16, 2022
Citations: 515 P.3d 572; 2022 WY 96; S-21-0243
Docket Number: S-21-0243
Court Abbreviation: Wyo.
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    Gerald L. Spence John Zelbst Rex Parris Joseph H. Low and Kent Spence, directly on their own behalf and derivatively on behalf of the Trial Lawyers College, a Wyoming Nonprofit Corporation v. John Sloan Milton Grimes Maren Chaloupka J.R. Clary, Jr. Dana Cole and Anne Valentine and the Trial Lawyers College, a Wyoming Nonprofit Corporation, 515 P.3d 572