Background

• Skyline Manor, Inc. is a Nebraska nonprofit that operates Skyline Retirement Community (SRC) in Omaha with a board of directors; bylaws provide a resident director elected annually by SRC residents; Link was elected resident director on December 19, 2011 and served in that role; Link filed a derivative action on February 7, 2013 alleging financial mismanagement by five Skyline directors; the district court dismissed for lack of standing, ruling Link’s residency-director status was void because Skyline was not operating SRC as a retirement community under §76-1313 at the time of his election; Skyline appealed seeking reversal and remand.
• Link’s standing as a derivative plaintiff turns on whether he was a Skyline director when the suit was filed; the court reviews standing de novo after factual findings; the case concerns whether the bylaws’ reference to §76-1313 governs Link’s status.
• The district court relied on the claim that Skyline no longer operated SRC as a retirement community and that Link’s resident-director election was therefore void; the Nebraska Nonprofit Corporation Act authorizes bylaws and articles to set director qualifications and governance rules, and bylaws may prescribe other director qualifications.
• Skyline’s bylaws still refer to §76-1313 for the resident director election, but the bylaws and articles were not amended to reflect any current dependency on §76-1313; the court held that bylaws are the continuing rule unless waived or repealed, and that the articles/bylaws govern the company’s governance notwithstanding changes in operation.
• Link was duly elected as resident director in 2011 and was serving in that capacity when he filed the derivative action; the court held Skyline could still provide for a resident director under its bylaws despite not operating as a retirement community at that time; Link therefore had standing to sue on behalf of Skyline.
• The court remanded for further proceedings consistent with its holding on standing.

Issues

Key Cases Cited

• In re Invol. Dissolution of Wiles Bros., 285 Neb. 920 (Neb. 2013) (standing and subject-matter jurisdiction; de novo review of §6-1112(b)(1) motions)
• State ex rel. Reed v. State, 278 Neb. 564 (Neb. 2009) (context on subject-matter jurisdiction and related standards)