Whalen, et al. v. Pleasant Hill Water Ass'n, Inc.
| Docket Number: | 2003-CA-00338-COA Linked Case(s): 2003-CT-00338-SCT ; 2003-CA-00338-COA |
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| Court of Appeals: |
Opinion Link Opinion Date: 08-10-2004 Opinion Author: King, C.J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Dissolution of non-profit corporation - Standing - Demand - Due process Judge(s) Concurring: Bridges, P.J., Lee, Irving, Myers, Chandler and Griffis, JJ. Procedural History: Dismissal Nature of the Case: Civil - Other |
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| Trial Court: |
Date of Trial Judgment: 01-24-2003 Appealed from: DeSoto County Chancery Court Judge: Melvin McClure, Jr. Disposition: THE PLAINTIFFS FAILED TO MEET STATUTORY REQUIREMENTS AND DID NOT HAVE STANDING TO SUE. THE DEFENDANTS WERE GRANTED A DISMISSAL. Case Number: 02-4-646(M) |
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| Party Name: | Attorney Name: | |||
| Appellant: | David C. Whalen, et al. |
CHRISTIAN T. GOELDNER |
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| Appellee: | Pleasant Hill Water Association, Inc., a Mississippi Non-Profit Corporation, City of Olive Branch, Mississippi, a Mississippi Municipal Corporation and City of Southaven Mississippi, a Mississippi Municipal Corporation | MELISSA CAROLINE WALKER WILLIAM P. MYERS GARY P. SNYDER RONALD LOUIS TAYLOR |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Dissolution of non-profit corporation - Standing - Demand - Due process |
| Summary of the Facts: | David Whalen brought suit against Pleasant Hill Water Association, Inc., a non-profit corporation, the City of Olive Branch, and the City of Southaven, claiming that the agreement to dissolve PHWA and transfer its assets to the respective cities was void because members were allowed to vote by proxy. Whalen filed an amended complaint in which sixty-one members of the water association joined as plaintiffs. The chancellor ruled that the evidence failed to prove an individual cause of action by any of the plaintiffs and that the plaintiffs had failed to make a demand on the corporation prior to filing suit and lacked standing to sue derivatively. Whalen appeals. |
| Summary of Opinion Analysis: | Issue 1: Standing Whalen argues that he and the other named plaintiffs have standing to sue because they were adversely impacted by the actions of PHWA. A demand is required to allow the corporation to take action to prevent divisive legal proceedings. Given this purpose of making demand, some meaningful opportunity for the directors to act after learning of a threat of suit on the issue is necessary. The Mississippi Nonprofit Corporation Act, sections 79-11-101- 403, does not require any procedural formalities which must be followed when making a demand other than alleging with particularity the demand made or why the demand could not be made. While Whalen may have attempted to make an oral demand by contacting some of the board members by phone, such informal discussions as mentioned in this matter are inadequate. The trial court correctly found that there was no breach of contract nor adverse action committed by PHWA against Whalen and the other named plaintiffs. Issue 2: Due process Whalen argues that the named plaintiffs were denied due process, because provisions of the written bylaws of PHWA were ignored during the special meeting and proxy voting was allowed to take place. Due process requires notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and to afford them an opportunity to present their objections. Whalen and the other named plaintiffs were given notice of the purpose of the special meeting and given an opportunity to be heard. |
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