[WSBAPT] Harmful nonprofit governance opinion

[Edward Clabaugh]

I strongly disagree. 

If you read the facts the non-profit was a sham that did not operate Mukai Gardens on Vashon Island as it was supposed. It was a vehicle to enrich the Nelsons. Other non-profits that contributed to the worthwhile cause of restoring the lovely Japanese garden and home found their funds diverted. The Nelsons would not account for them. They did not open the garden and home to the public. This situation has been on-going for years. So people who wanted to see the non-profit fulfill its mission finally had to take action. It has been a long battle but finally after many years the Nelsons are out and the non-profit is fulfilling its mission of restoring the property and opening it to the public. 

Sent from my iPhone

> On May 23, 2016, at 8:11 AM, Doug Schafer <schafer at pobox.com> wrote:
> 
> Please carefully read the attached WA Court of Appeals, Div. I, opinion. Though "unpublished," it provides a template for hostile dissidents to takeover a membership-based nonprofit corporation by secretly collecting member applications and dues, then, on the day that the dissidents deposit the dues (without authority) in the corporate bank account, sending a 10-day notice for a membership meeting . At that meeting, the "new members" remove the incumbent directors.  The corporate directors and officers were unaware of the "new members" until the meeting occurred. Our state supreme court appears close to adopting a rule that will permit citation to "unpublished" opinions such as this one.
> 
> My fear is that this case will be used disrupt the governance of too many nonprofit corporations.
> 
> The Court of Appeals declined to apply the well-established doctrine that courts refrain from interfering in the internal affairs of such associations and defer to the association's own interpretation of its rules unless that interpretation is arbitrary or unreasonable, by asserting that such doctrine applied only to local chapters of national organizations.  Case law is otherwise, however.
> 
> When I read this opinion, I emailed one of the lawyers for the losing parties and urged them to petition for state supreme court review.  I hear nothing back until last Thurday, when Ms. Matthews phoned me.  I spoke Friday with her and her NYC lawyer husband, Mr. Nelson, who reported that the COA denied their motion for reconsideration on May 2, so the deadline for a petition for review is June 2.  They are, however, "tapped out" and I sense some despair.
> 
> I'm within minutes of departing on a family trip this week, so I'm not available to assist.
> 
> I write in the hope that other lawyers interested in maintaining       strong nonprofit corporations will consider helping Ms. Matthews and Mr. Happy to petition for review.  That will allow time for them to negotiate with the prevailing group, and possible reach a settlement whereby they might ask Division I to withdraw its opinion.  I've seen that is another case.
> 
> Nelson Happy:  jnelsonhappy at gmail.com
> Mary Matthews:  matthewshistpres at gmail.com
> 
> Doug Schafer, lawyer in Tacoma.
> <2016_IslandLandmarks_2.pdf>
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