136 So. 3d 83
La. Ct. App.2014Background
- John B. Wells was a long-time member of the Alliance for Good Government and was elected by the St. Tammany chapter to a one-year board seat in November 2011; the Alliance’s board voted (in executive session) in January 2012 not to seat him and expelled him in March 2012.
- Wells sued (June 2012) seeking declaratory relief, quo warranto, injunctive relief, damages (including defamation), and appointment of a corporate receiver, challenging the board’s authority and compliance with the articles, bylaws, and Robert’s Rules of Order.
- The Alliance’s articles of incorporation state a five-member board; the bylaws (ratified 2005) provide for a nine-member board after adding St. Tammany chapter — Wells argued the bylaws conflict with the articles and thus the nine-member board’s actions were void.
- Defendants raised multiple exceptions: no right of action/mootness, lack of procedural capacity, no cause of action, vagueness, improper cumulation, and improper use of summary procedure; the trial court sustained many exceptions and dismissed most claims (with limited leave to amend defamation), and Wells appealed.
- On de novo review the appellate court (1) held Wells had standing generally but his claim to be restored to the expired one-year board term was moot, (2) validated the nine-member board under the bylaws and Louisiana nonprofit law, (3) held the board (and unnamed secretary/treasurer) lacked procedural capacity to be sued as separate juridical persons and dismissed them, (4) found no individual liability alleged against chairman Fandal, and (5) affirmed denial of discovery relief and dismissal of other procedural exceptions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right of action / standing to seek restoration and other relief | Wells asserted he remained a member/elected director and thus had a real interest to challenge the board and obtain restoration, receivership, quo warranto, injunction | Defendants argued Wells’ expulsion eliminated his interest and his one-year term expired, mooting restoration and related remedies | Court: Wells had standing generally, but restoration to the expired one-year term is moot; exception of no right of action sustained as to restoration claim |
| Validity of nine-member board (articles v. bylaws) | Wells argued articles control and set a five-member board, making nine-member board acts void | Alliance argued Article V authorized adoption of bylaws and La. law permits bylaws to set director number; bylaws were ratified | Court: Bylaws valid under Article V and La. R.S. principles; nine-member board’s votes validated |
| Procedural capacity — suing the board, secretary, treasurer | Wells named/formally referred to the board, secretary, treasurer as defendants (or actors) | Defendants: board/individual officer titles are not separate juridical persons capable of being sued; corporate entity is the proper defendant | Court: Board, secretary, treasurer are not juridical persons — exception sustained and those defendants dismissed; Alliance corporate entity remained defendant |
| Individual liability of chairman Fandal | Wells alleged Fandal acted (or failed to act) in connection with the votes and defamation | Defendants: allegations concern official actions only; no facts pled for individual liability | Court: No cause of action against Fandal individually; dismissal affirmed |
Key Cases Cited
- Morton v. Washington Nat’l Ins. Co., 420 So.2d 1019 (La. App. 5 Cir.) (standard for exception of no right of action)
- Gaudet v. Jefferson Parish, 116 So.3d 691 (La. App. 5 Cir.) (de novo review of exception of no cause of action)
- Mary v. Lupin Foundation, 609 So.2d 184 (La.) (business-corporation law may guide nonprofit corporation issues)
- Industrial Companies, Inc. v. Durbin, 837 So.2d 1207 (La.) (quo warranto/restoration claims can be moot when term expired)
- Parish of Jefferson v. Lafreniere Park Foundation, 716 So.2d 472 (La. App. 5 Cir.) (standing/right of action based on real and actual interest)
- Dejoie v. Medley, 945 So.2d 968 (La. App. 2 Cir.) (discussion on when decision-makers/boards are not separate juridical persons)
- Roccaforte v. Nintendo of America, Inc., 917 So.2d 1143 (La. App. 5 Cir.) (trial courts’ broad discretion in discovery rulings)
- Jenkins v. Hartford Accident & Indem. Co., 356 So.2d 490 (La. App. 1 Cir.) (dismissal for failure to amend defective pleading)