Decorah Genealogy Association v. Roger L. Bergan

• Court: Court of Appeals of Iowa
• Decided: July 22, 2020
• Docket: 19-0828
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 19-0828 Filed July 22, 2020

DECORAH GENEALOGY ASSOCIATION, Plaintiff-Appellant,

vs.

ROGER L. BERGAN, Defendant-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Winneshiek County, Richard D.

Stochl (summary judgment) and Alan T. Heavens (final disposition), Judges.

A nonprofit association appeals the dismissal of its conversion claim against

a board member of a rival association. AFFIRMED.

Karl G. Knudson, Decorah, for appellant.

Andrew P. Nelson of Meyer, Lorentzen & Nelson, Decorah, for appellee.

Heard by Vaitheswaran, P.J., and Doyle and May, JJ. 2

MAY, Judge.

Decorah Genealogy Association (DGA) appeals the dismissal of its

conversion claim against Roger Bergan. We affirm.

I. Facts and Prior Proceedings

This case stems from hostilities between two once-cooperative nonprofit

organizations, DGA and the Winneshiek County Historical Society (WCHS), both

of which are committed to preserving local history. For several years, WCHS

operated out of the Luther College library. Eventually, the college library could no

longer accommodate WCHS. So, in 1998, WCHS moved into the basement of the

Decorah Public Library. DGA already operated out of the library’s lower level. The

two organizations occupied adjoining rooms. This allowed them to share

resources. And some people belonged to both DGA and WCHS. At times, DGA

and WCHS held joint meetings. The groups sent out joint newsletters.

But in 2016 the public library informed both groups they would need to

relocate by 2017. Around this time, the relationship between the two groups began

to deteriorate. DGA secured a new location at the local senior center. DGA began

moving its property out of the library location a little bit at a time. WCHS received

a historical house to restore; eventually, the house would serve as WCHS’s new

operating location. In the interim, WCHS planned to store its property in a room in

the old local jail.

This case arises from events of November 10, 2016. WCHS vice president

Roger Bergan checked out a key from the library circulation desk after hours. Then

Bergan and other members of WCHS—including WCHS’s president and its 3

secretary—entered DGA offices and removed microfilms1 from a filing cabinet.

Bergan contends the microfilms were “believed to be either owned entirely by

WCHS or jointly by WCHS and DGA since many items had been com[m]ingled by

each entity over the years.” Bergan and the others moved the microfilm to WCHS’s

storage space at the jail.

DGA asked WCHS to return the microfilm. WCHS resisted. Eventually,

DGA filed a replevin action against WCHS. The two groups reached a settlement

agreement, and WCHS returned the microfilm. But the settlement agreement

preserved DGA’s right to pursue this conversion action, through which DGA seeks

damages against Bergan for his part in taking the microfilm.

Bergan filed a motion for summary judgment.2 The district court concluded

Iowa Code section 613.19 (2017) provided Bergan with statutory immunity.

Accordingly, the court granted Bergan’s motion and dismissed DGA’s conversion

claim. DGA appeals.

II. Scope and Standard of Review

“We review summary judgment rulings for correction of errors at law.” Roll

v. Newhall, 888 N.W.2d 422, 425 (Iowa 2016). Summary judgment is appropriate

when the file shows “there is no genuine issue as to any material fact and that the

moving party is entitled to judgment as a matter of law.” Iowa R. Civ. P. 1.981(3).

“An issue of fact is ‘material’ only when the dispute involves facts which might

affect the outcome of the suit, given the applicable governing law.” Nelson v.

1 Bergan and others also removed index books from the office. For readability purposes, all subsequent references will be limited to the microfilms. 2 DGA also sought summary judgment as to Bergan’s abuse-of-process

counterclaim. It is not before us. 4

Lindaman, 867 N.W.2d 1, 6 (Iowa 2015) (quoting Wallace v. Des Moines Indep.

Cmty. Sch. Dist. Bd. of Dirs., 754 N.W.2d 854, 857 (Iowa 2008)). “An issue is

‘genuine’ if the evidence in the record ‘is such that a reasonable jury could return

a verdict for the non-moving party.’” Id. (citation omitted). “We view the evidence

in the light most favorable to the nonmoving party, who is entitled to every

legitimate inference we may draw from the record.” Id. at 6–7. But “[s]peculation

is not sufficient to generate a genuine issue of fact.” Id. at 7 (quoting Hlubeck v.

Pelecky, 701 N.W.2d 93, 93 (Iowa 2005)).

As will be further discussed, this appeal turns on whether Bergan was

entitled to statutory immunity. Summary judgment plays a special role in immunity

cases. As Justice Waterman explained in Lindaman:

Summary judgment is an important procedure in statutory immunity cases because a key purpose of the immunity is to avoid costly litigation, and that legislative goal is thwarted when claims subject to immunity proceed to trial. See Plumhoff v. Rickard, ___ U.S. ___,___, 134 S.Ct. 2012, 2019, 188 L.Ed.2d 1056, 1064 (2014) (“[T]his [immunity] question could not be effectively reviewed on appeal from a final judgment because by that time the immunity from standing trial will have been irretrievably lost.”); Hlubek, 701 N.W.2d at 98 (noting statutory immunity removes the “‘fear of being sued’” and affirming summary judgment (quoting Harlow v. Fitzgerald, 457 U.S. 800, 814, 102 S.Ct. 2727, 2736, 73 L.Ed.2d 396, 408 (1982))). Indeed, in Hlubek, we recognized the defendants’ observation that “statutory immunity, like common-law immunity, provides more than protection from liability; it provides protection from even having to go to trial in some circumstances.” 701 N.W.2d at 96. Qualified immunity is “an entitlement not to stand trial or face the other burdens of litigation.” Mitchell v. Forsyth, 472 U.S. 511, 526, 105 S.Ct. 2806, 2815, 86 L.Ed.2d 411, 425 (1985).

Id. at 7 (alterations in original). 5

III. Discussion

The district court concluded Iowa Code section 613.193 provided Bergan

immunity against DGA’s suit. On appeal, DGA contends section 613.19 does not

apply. Bergan disagrees. In addition, Bergan contends he also is entitled to

immunity under section 504.901.4

Although the district court’s ruling focused on section 613.19, “we may

affirm summary judgment on an alternative ground supported by the record and

urged by the movant in district court and on appeal.” Deeds v. City of Marion, 914

N.W.2d 330, 350 n.9 (Iowa 2018). We choose to focus on Bergan’s argument

concerning section 504.901, which was both raised below and briefed on appeal.

Iowa Code chapter 504 is the Revised Iowa Nonprofit Corporation Act. Iowa

Code § 504.101. Section 504.901 is entitled “Personal Liability.” It states as

follows:

1. Except as otherwise provided in this chapter, a director, officer, employee, or member of a corporation is not liable for the

3 Section 613.19 provides: A director, officer, employee, member, trustee, or volunteer, of a nonprofit organization is not liable on the debts or obligations of the nonprofit organization and a director, officer, employee, member, trustee, or volunteer is not personally liable for a claim based upon an act or omission of the person performed in the discharge of the person’s duties, except for acts or omissions which involve intentional misconduct or knowing violation of the law, or for a transaction from which the person derives an improper personal benefit. For purposes of this section, “nonprofit organization” includes an unincorporated club, association, or other similar entity, however named, if no part of its income or profit is distributed to its members, directors, or officers. 4 Bergan also makes other arguments, such as his claim that res judicata bars

DGA from pursuing “its second suit against Mr. Bergan when DGA has already had the opportunity to fully and fairly litigate its claim against WCHS.” Because we conclude Bergan enjoys statutory immunity, we do not reach Bergan’s other arguments. 6

corporation’s debts or obligations and a director, officer, member, or other volunteer is not personally liable in that capacity to any person for any action taken or failure to take any action in the discharge of the person’s duties except liability for any of the following: a. The amount of any financial benefit to which the person is not entitled. b. An intentional infliction of harm on the corporation or the members. c. A violation of section 504.835. d. An intentional violation of criminal law. 2. A provision set forth in the articles of incorporation eliminating or limiting the liability of a director to the corporation or its members for money damages for any action taken, or any failure to take any action, pursuant to section 504.202, subsection 2, paragraph “d”, shall not affect the applicability of this section.

Id. § 504.901 (emphasis added).

As with all statutes, we find the meaning of section 504.901 in the “words

chosen by the legislature.” See Fishel v. Redenbaugh, 939 N.W.2d 660, 663 (Iowa

Ct. App. 2019) (citation omitted).

Bergan claims “[t]here is no genuine fact dispute that [he] was a director,

officer, member, and volunteer of WCHS” on the night of the microfilm removal.

Moreover, Bergan contends, his actions were taken in his discharge of his duties

to WCHS. And, as Bergan points out, “DGA makes no claim” that any of the

exceptions listed in subparagraphs (a) through (d) apply here. So, Bergan

reasons, section 504.901 precludes a finding that he is “personally liable.”

DGA disagrees. It doubts that Bergan’s efforts to retrieve the microfilm

constituted “any action taken . . . in the discharge of [Bergan’s] duties.” DGA notes

that the word “duty” means a legal obligation, that is, an act required by the law.

See Duty, Black’s Law Dictionary (11th ed. 2019) (defining “duty” as “[a] legal

obligation that is owed or due to another and that needs to be satisfied; that which

one is bound to do, and for which somebody else has a corresponding right”). And 7

Bergan was not legally obligated to retrieve the microfilm. So the statute cannot

apply.

We disagree. To understand a statute’s words, we must consider their

context. Doe v. State, 943 N.W.2d 608, 610 (Iowa 2020). In section 504.901, the

phrase “discharge of the person’s duties” applies not only to the actions of directors

and officers but also to the actions of any “other volunteer.” (Emphasis added.)

And many of the “duties” performed by “volunteers” do not involve any legal

obligation. Indeed, in everyday usage, a “volunteer” is someone who acts without

compulsion. See Volunteer, Merriam-Webster, https://www.merriam-webster.co

m/dictionary/volunteer (defining “volunteer” as “a person who voluntarily

undertakes or expresses a willingness to undertake a service: such as . . . one who

renders a service or takes part in a transaction while having no legal concern or

interest”). So, in the context of section 504.901—a statute expressly aimed at

protecting “volunteers”—we cannot conclude “duties” means only those actions

that are involuntary, that is, required by law.

DGA also argues that, although Bergan was Vice-President of WCHS,

neither WCHS’s Articles of Incorporation nor its By-laws permitted Bergan to help

retrieve the microfilm “without prior approval of the WCHS Board of Directions.”

And, DGA notes, prior to the microfilm’s removal, “WCHS, as a corporation, had

never held a meeting and approved a motion or resolution directing Bergan or

anyone else” to remove the microfilm. DGA acknowledges that, just prior to the

removal, Bergan “and five WCH[S] members”—including its president and

secretary—“met informally” and “decided to remove the microfilm.” But the six-

member group was shy of the “10-member quorum” anticipated by WCHS’s By- 8

laws. And they “kept no minutes, held no vote and clearly did not follow Robert’s

Rules of Order” as anticipated by the By-laws. So, DGA contends, “[t]he irregular

meeting held by Bergan and five others immediately prior” to the microfilm removal

“was clearly not a corporate action of WCHS capable of conferring a ‘duty’ and

hence [statutory] immunity on Bergan’s group.” And so the actions of Bergan’s

group were merely “the individual and separate acts of persons who happened to

be WCHS members,” not actions taken in discharge of their duties to WCHS.

We disagree. We again note that, by its plain terms, section 504.901

immunizes all “volunteers,” whether they serve as officers or not. And we do not

believe section 504.901 only applies to a volunteer’s actions if those actions have

been expressly pre-approved by the entire board of directors through a formal vote

at a formal meeting. For example, if a volunteer wants to scrape snow off of the

sidewalk or change a burned-out lightbulb in the office, do they have to obtain pre-

approval from the board as a whole—or else forego immunity? If the legislature

had intended to impose such an onerous prerequisite—one that, as a practical

matter, would pretty much swallow the statute’s grant of immunity—we think the

legislature would have said so expressly. It did not.

Instead, we think section 504.901’s broad language (“any person,” “any

action”) creates broad protection for Iowans who donate their time and talents to

community organizations. Cf. Vails v. United Cmty. Health Ctr., Inc., No. C11-

4048-LTS, 2012 WL 6045941, at *17 (N.D. Iowa Dec. 5, 2012) (“Section 504.901

reflects an underlying policy of encouraging community members to serve as

directors or officers of nonprofit organizations by granting them immunity and

limiting their personal liability. The history of the statute also reflects the 9

legislature’s intent to reduce risk and uncertainty by narrowing the immunity

exceptions.”). And given the particular facts of this case, we believe Bergan’s

actions—moving the microfilm WCHS believed it owned to WCHS’s new location—

fell within its protection.

Several considerations support this view. First, in general, we “presume

words used in a statute have their ordinary and commonly understood meaning.”

In re A.M., 856 N.W.2d 365, 371 (Iowa 2014) (quoting McGill v. Fish, 790 N.W.2d

113, 119 (Iowa 2010)); accord In re Estate of Franken, ___ N.W.2d ___, ___, 2020

WL 3107692, at *4 (Iowa 2020) (noting “we seek to determine the ordinary and fair

meaning of the statutory language at issue”). And we struggle to conclude that

efforts by an officer or director to preserve a nonprofit corporation’s property would

fall outside “the discharge of” that “person’s duties,” as those terms are commonly

understood.

Second, and similarly, we note that Bergan did not act alone. Instead, he

worked with a group of several WCHS members. One of them was WCHS’s

president. And when a “volunteer,” like Bergan, assists a nonprofit’s president to

preserve the nonprofit’s property, we believe the volunteer is acting “in the

discharge of [their] duties.” We think this view fits well with Iowans’ common

understanding about the “duties” that “volunteer[s]” “discharge” in their service to

nonprofit organizations. See A.M., 856 N.W.2d at 371; cf. Nix v. Hedden, 149 U.S.

304, 307 (1893) (noting that, although “[b]otanically speaking, tomatoes are the

fruit of a vine,” they are “vegetables” in “the common language of the people”).

Third, it is undisputed that Bergan’s purpose was to benefit WCHS. He did

not seek or obtain personal gain. 10

Finally, as Bergan notes, the WCHS board ratified the removal of the

microfilms at later meetings. Moreover, when DGA demanded return of the

microfilms, WCHS refused. Through these actions, WCHS erased any doubt as

to whether removal of the microfilms advanced WCHS’s perceived interests. It

did.

Given these circumstances, we conclude Bergan’s actions were taken in

the “discharge of [Bergan’s] duties” as a “volunteer” for WCHS, if not also in his

role as “officer,” “director,” and “member” of WCHS. So we conclude Iowa Code

section 504.901 provides Bergan immunity against DGA’s claim for conversion.5

IV. Conclusion

We affirm the grant of summary judgment in Bergan’s favor.

AFFIRMED.

5 DGA argues that if section 504.901 provides Bergan personal immunity, DGA would be left “without a full or adequate remedy” and the result would be a taking of DGA’s “property without just compensation in violation of the Fifth Amendment to the United States Constitution and article I, section 18 of the Iowa Constitution.” Gacke v. Pork Xtra, LLC, 684 N.W.2d 168, 171 (Iowa 2004) (summarizing a district court’s holding in a takings case wherein a statute provided immunity for a hog confinement). This argument misses the mark. DGA reached a settlement agreement with WCHS and recovered the microfilms. DGA now seeks monetary damages from Bergan for its inability to access the microfilms for a period of time. This does not constitute a takings case under the state or federal constitution. See Brakke v. Iowa Dep’t of Nat. Res., 897 N.W.2d 522, 546–47 (Iowa 2017) (discussing the various forms of takings cases). Moreover, to the extent DGA argues section 504.901 is unconstitutional, the claim is not sufficiently developed for our review. See Midwest Auto. III, LLC v. Iowa Dep’t of Transp., 646 N.W.2d 417, 431 n.2 (Iowa 2002) (finding passing argument without further development waived).