[WSBAPT] Harmful nonprofit governance opinion

[Josh Grant]

I would love some info on the suggestion that the 
Our state supreme court appears close to adopting a rule that will permit citation to "unpublished" opinions such as this one.


This silly rule needs to be scrapped.

I didn’t think the suggestion was even a pending rule change open for comment.??

Josh
From: Doug Schafer 
Sent: Monday, May 23, 2016 8:11 AM
To: Solo & Small Firm WSBA Listserv ; WSBA RPPT Probate & Trust Discussion Forum 
Subject: [WSBAPT] Harmful nonprofit governance opinion

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 Though "unpublished," it provides a template for hostile dissidents to takeover a membership-based nonprofit corporation by secretly collecting member applications and dues, then,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 Our state supreme court appears close to adopting a rule that will permit citation to "unpublished" opinions such as this one.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.



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