ISLAND LANDMARKS, a Washington nonprofit corporation, Appellant,
MARY MATTHEWS; ELLE and KEN DE FRANG; NELSON HAPPY; and OWEN RYAN, Respondents.
Island Landmarks appeals the trial court's order granting the motion for summary judgment of Mary Matthews and the other named respondents ("the Matthews Group"). Also at issue is the order denying Island Landmarks' motion for partial summary judgment and the judgment dismissing the case with prejudice. Because there are genuine issues of material fact for trial, we affirm in part, reverse in part, and remand.
Island Landmarks is a Washington nonprofit corporation. One of its stated purposes is "[t]o promote historic preservation of architecture, landscape, and heritage of Vashon and Maury Islands . . . ." Membership is "open and unlimited" to all persons who have the same specified interest.
The corporation owns the Mukai Farm and Garden on Vashon Island. This property is a King County Historic Landmark. It is subject to a recorded historic preservation easement dated July 20, 1999 in favor of the Washington State Department of Archeology and Historic Preservation.
This action for declaratory and other relief arises from competing claims to control the corporation. The "Kritzman Group, " led by Ellen Kritzman—a former board member of the nonprofit—commenced this action in the name of Island Landmarks. This followed a special meeting on June 4, 2012 that the Kritzman Group convened after sending its own notice. The actions at that meeting included voting out the board, composed of the Matthews Group, and electing a new board. The Matthews Group is the other group competing for control of this nonprofit.
The Matthews Group moved for summary judgment. It claimed, among other things, that the Kritzman Group's attempt to remove the directors was invalid because it failed to give proper notice of the special meeting where those attending voted out the then existing board. The Matthews Group sought dismissal, with prejudice, of the action.
Island Landmarks moved for partial summary judgment, first arguing that the Kritzman Group was the lawful governing board of the corporation. It also argued, in the alternative, that the Matthews Group must be judicially removed due to alleged acts of malfeasance pursuant to RCW 24.03.1031. This latter alternative appears to have been based on the assumption that Island Landmarks' then pending motion to amend the complaint would be granted. But it never was.
At a hearing on these motions, the trial court declined to address Island Landmarks' motion to amend the complaint. Instead, it granted the Matthews Group's motion for summary judgment. That same day, the court entered two orders: an order granting the Matthews Group's motion for summary judgment, and an order denying Island Landmarks' motion for partial summary judgment.
The court later entered a judgment dismissing this action with prejudice.
Island Landmarks appeals.
BYLAWS OF ISLAND LANDMARKS
Island Landmarks argues that the trial court erred when it granted the Matthews Group's motion for summary judgment. Specifically, it argues that the court's reading of the corporation's bylaws was incorrect. We agree and also hold that there are genuine issues of material fact for trial.
Summary judgment is appropriate only if there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law.The court must consider all facts submitted and all reasonable inferences from the facts in the light most favorable to the nonmoving party. We review de novo the grant or denial of a summary judgment motion.
The Washington Nonprofit Corporation Act, chapter 24.03 RCW, states that "bylaws may contain any provisions for the regulation and management of the affairs of a corporation not inconsistent with law or the articles of incorporation." Bylaws are the internal laws of a corporation, and they have the effect of a statute.
"The governing documents of a corporation are interpreted in accordance with accepted rules of contract interpretation." The "'touchstone of contract interpretation is the parties' intent.'" "Washington courts follow the objective manifestation theory of contracts, imputing an intention corresponding to the reasonable meaning of the words used." "An interpretation which gives effect to all of the words in a contract provision is favored over one which renders some of the language meaningless or ineffective." The court will not read ambiguity into a contract "'where it can reasonably be avoided.'"
Summary judgment as to a contract interpretation "is not proper if the parties' written contract, viewed in light of the parties' other objective manifestations, has two or more reasonable but competing meanings." If two or more meanings of the contract are reasonable, a question of fact exists."Interpretation of a contract provision is a question of law only when (1) the interpretation does not depend on the use of extrinsic evidence, or (2) only one reasonable inference can be drawn from the extrinsic evidence."
CR 56 (e)
In passing, the Matthews Group argues that we should disregard a number of declarations attached to Island Landmarks' motion for partial summary judgment that it moved to strike below. It contends that the declarations "were not before the trial court and are also irrelevant to the issues raised in this appeal." Nevertheless, the trial court implicitly denied this motion by expressly stating in its order that the declarations were among the items considered when it ruled on the motion. Because the Matthews Group did not cross-appeal this adverse ruling, we do not further address this argument. These declarations are before us in our de novo review.
Notice of Meetings
Island Landmarks argues that the trial court misinterpreted § 2.7 of the bylaws. The trial court concluded that the Kritzman Group was first required to give its written request for notice of a special meeting to the secretary, so that the secretary could give notice to the members. Island Landmarks further argues that the ...