Pullins v. HarmerPullins v. Harmer
{¶1} Appellee, Apple Valley Property Owners Association, is a non-profit corporation which oversees a planned unit develоpment. Appellants, Kathryn Elliott Pullins, Stephen Elliott, and Judy Fagert, are property owners within the planned unit development and are members of the association. Appellant Pullins is also a member of the board of directors.
{¶2} On August 30, 2006, appellant Fagert requested from appellee Apple Valley a copy of the employment contract for its general manager. The request was denied based upon the fact that the employment information was confidential. On November 13, 2006, appellants sent a letter to appellee Apple Valley demanding certain actions, including salary amounts for all of appellee‘s employees. On December 6, 2006, appellee Apple Valley passed a resolution to keep such information confidential. Several more requests and denials were exchanged between the parties.
{¶3} On December 20, 2007, appellants filed a complaint against appellee Apple Valley and all current and some former members of appellee‘s board of directors, as well аs some non-board members. The complaint was filed under
{¶4} Appellants filed an appeal and this matter is now before this court for consideration. Assignment of error is as follows:
{¶5} “DID THE TRIAL COURT ERR WHEN IT DISMISSED THE LAWSUIT ON THE GROUNDS THAT PLAINTIFFS-APPELLANTS DID NOT COMPLY WITH THE PROVISIONS OF OHIO CIVIL RULE 23.1 AND OHIO CIVIL RULE 12(B)6?”
I
{¶6} Appellants claim the trial court erred in granting a
{¶7} Our standard of review on a
{¶8} Because of the specificity required by
{¶9} “In a derivative action brought by one or more legal or equitable owners of shares to enforce a right of a corporation, the cоrporation having failed to enforce a right which may properly be asserted by it, the complaint shall be verified and shall allege that the plaintiff was a shareholder at the time of the transaction of which he complains or that his share thereafter devolved on him by operation of law. The complaint shall
{¶10} In its judgment entries filed March 5, 2008, the trial court dismissed the complaint, finding the following:
{¶11} “1. Plaintiffs hаve not satisfied the pre-suit demand requirements pursuant to
{¶12} “2. Plaintiffs have failed to stаte satisfactory reasons for not complying with the pre-suit demands mandated by
{¶13} “3. Plaintiffs have not satisfied the representation requirements of
{¶14} Therefore, the following issues are raised sub judice: 1) Did the November 13, 2006 letter meet the requirements of a pre-suit demand letter?; 2) If not, have appellants established reasons for not complying with a pre-suit demand?; and 3) Hаve appellants satisfied the representative requirements? In light of
{¶16} “Vote to bring a lawsuit to collect the amounts paid by the AVPOA to the law firms of Kegler, Brоwn et al, and T. Garrett Ressing for their work on the matters concerning Kathryn Elliott Pullins, Stephen M. Elliott, and Scott A. Pullins.
{¶17} “Vote to discharge the law firms of Kegler, Brown et al, and T. Garrett Ressing for cause frоm any further work on behalf of the AVPOA or its Board of Directors.
{¶18} “Vote to discharge Jeff Harmer for cause as AVPOA Manager and any further employment with the AVPOA.
{¶19} “Vote to provide a list of аll AVPOA Employees, along with salaries and position descriptions, to any AVPOA member upon request.”
{¶20} The demand letter relates only to Count 2 of the complaint: denial of corpоrate records relative to a list of all employees and their respective job descriptions and salaries. As noted by Plaintiff‘s Exhibit IV attached to the complaint, the request was denied pursuant to a confidentiality resolution passed by appellee Apple Valley. The remaining counts, 1 and 3-9, are unrelated to the November 13, 2006 letter. In fact, the complaint establishes the requests in the demand letter were answered relative to Count 2. We therefore conclude the demand letter requirement was met as to Count 2 only.
{¶21} We therefore must address the remaining counts in light of the futility of requesting them in writing. In considering the standard set forth in
{¶22} “8. Every current director, except for director Kathryn Elliott Pullins, is named as a defendant in this lawsuit.
{¶23} “9. Director Kathryn Elliott Pullins is a plaintiff in this lawsuit.
{¶24} “10. There are no other directors that could bring this action.
{¶25} “11. Alternatively, the Plaintiffs allege that director Kathryn Elliott Pullins has the authority under the express terms of Article 9.1 and 9.7 of thе corporate bylaws and
{¶26} “9.1 Powers. The Board of Directors shall have the power to carry on the affairs of the Association.
{¶27} “9.7 Action Without Meeting. Unless prohibitеd by law, where director action is required before a meeting can be conveniently called, any action which may be taken at a meeting of the Board may be taken without a meeting if the action is consented to by a majority of the Directors entitled to vote on such action at a meeting of the Directors. Such actions shall be reported as the next Board meeting.
{¶28} “13. Plaintiffs allege that they have exhausted all efforts to work within the framework of the nonprofit corporation in order to bring about the requested aсtions.
{¶29} “14. Plaintiffs allege that they have attempted to persuade the directors on multiple occasions to bring about the requested actions but have been totally unsuccеssful.
{¶31} None of these averments establish that the issues raised by thе remaining counts in the complaint have been requested or unreasonably withheld. We fail to find as to all the counts, save for Count 2, that futility has been established. We therefore conclude as to these counts, the complaint fails to meet the requirements of
{¶32} Lastly, we find from the four corners of the complaint, appellants met the representativе requirement. See, ¶1, 2, and 4.
{¶33} Upon review, we find the trial court erred in granting the motion to dismiss as to Count 2, but was correct in granting the motion as to the remaining counts.
{¶34} The sole assignment of errоr is granted in part and denied in part.
{¶35} The judgment of the Court of Common Pleas of Knox County, Ohio is hereby affirmed in part, reversed in part, and remanded.
By Farmer, J.
Gwin, P.J. and
Delaney, J. concur.
s/Sheila G. Farmer
s/W. Scott Gwin
s/Patricia A. Delaney
JUDGES
SGF/sg 0811
s/ Sheila G. Farmer
s/ W. Scott Gwin
s/ atricia A. Delaney
JUDGES