Dreyer v. Board of Trustees of Mid-Rivers Telephone, Inc.

598 P.2d 205, 183 Mont. 43, 1979 Mont. LEXIS 840
CourtMontana Supreme Court
DecidedAugust 1, 1979
DocketNo. 14705
StatusPublished
Cited by2 cases

This text of 598 P.2d 205 (Dreyer v. Board of Trustees of Mid-Rivers Telephone, Inc.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dreyer v. Board of Trustees of Mid-Rivers Telephone, Inc., 598 P.2d 205, 183 Mont. 43, 1979 Mont. LEXIS 840 (Mo. 1979).

Opinion

MR. JUSTICE SHEEHY

This is an appeal by Elmo Dreyer and Judson Townley, the applicants above named (Dreyer and Townley) and a cross-appeal by the Board of Trustees of Mid-Rivers Telephone Cooperative, Inc., and thé remaining respondents above named (collectively “Mid-Rivers”) from certain of the orders contained in the judgment and decree of the District Court, Seventh Judicial District, McCone County, Montana, dated October 23, 1978.

Mid-Rivers is a rural telephone cooperative incorporated under the “Rural Electric and Telephone Cooperative Act” (Ch. 18, Title 35 MCA). The cooperative consists of approximately 5,000 member-patrons residing in some eighteen counties of eastern Mon[45]*45tana. It is claimed that the cooperative serves an area of more than 22,000 square miles and is geographically the largest telephone cooperative in the world.

Respondents are the trustees of Mid-Rivers, the cooperative itself, and its individual officers and trustees.

Dreyer and Townley brought an action for themselves individually, as representatives of and on behalf of themselves and all other members of Mid-Rivers. In a six-count application for relief in the District Court of McCone County, they sought from the District Court:

COUNT I. To redistrict the existing residence districts of the cooperative used for establishing the residency qualifications of trustees of the cooperative’s board.

COUNT II. To require that notice be given of a special meeting of the members of the cooperative in response to a petition asking for such a meeting signed by certain members of the cooperative.

COUNT III. To require the cooperative to hold an annual meeting of the membership in Circle, Montana rather than Win-nett, Montana.

COUNT IV. To restrict payment of fees and expenses paid to the respondent board members for their attendance at meetings of the board within or without the state of Montana.

COUNT V. To require the cooperative to conduct the election of trustees of the cooperative on a voting district basis.

COUNT VI. To declare the compensation and expenses previously paid to the respondent board members to be illegal and to require an accounting in repayment and the same to the cooperative and to hold that the 1976 and 1977 elections of the trustees were illegal and that the trustees were illegally elected.

Dreyer and Townley sought a writ of mandamus from the District Court as to the first five counts. The issues with respect to count six were reserved by the District Court until the issues under the first five counts are finally decided. The October 23, 1978 judgment and decree of the District Court confirmed the court’s earlier [46]*46dismissal of the application with respect to counts one and two; kept in force an alternative writ of mandate with respect to count three; requires the cooperative to hold its annual meetings at Circle, Montana, until such time as its bylaws are amended; and dismissed the application with respect to counts four and five.

Dreyer and Townley appeal from the adverse rulings on counts four and five. Mid-Rivers appeals from the adverse ruling on count three. Under Rule 23(h), Mont.R.App.Civ.P., Dreyer and Townley are regarded as appellants before this Court and Mid-Rivers collectively as respondents.

After the start of the lawsuit by Dreyer and Townley, Mid-Rivers did on the 91st day before the planned 1978 annual meeting, redistrict the five areas in an attempt to correct the inequities as to the number of members represented in each district. The redistricting was done through the use of telephone exchanges (telephone prefix numbers). The District Court ruled that Mid-Rivers had complied with the applicable provision of the bylaws and dismissed count one. Dreyer and Townley do not appeal from that decision.

As to the second count, on the contention of Dreyer and Townley that Mid-Rivers had failed to call a special meeting when petitioned by more than 200 of its members, it was found that a bylaw provision of Mid-Rivers, which allowed for the calling of a special meeting on a petition of more than 200 members, conflicted with a state statute which required that such a meeting could only be called by 10% of the members on petition. Ten percent of Mid-Rivers’ members exceeds 200. Mid-Rivers took the position that they were therefore not required to call a special meeting as requested by the petition. Dreyer and Townley agreed with this position. The District Court dismissed count two, and an appeal was taken therefrom.

COUNT FOUR

Dreyer and Townley appeal from the order of the District court dismissing their application and refusing mandamus relief as to count four. The contention of Dreyer and Townley on this count is [47]*47that, contra to section 35-18-311 MCA, the trustees of Mid-Rivers, under Art. V, Section 7 of its bylaws, have authorized for themselves a $75 fee each plus expenses for attendance at all board meetings held within and outside of the State of Montana.

The applicable bylaw provides as follows:

“Section 7. Compensation. Directors [trustees] shall not receive any salary for their services as directors, except that by resolution of the Board a reasonable fixed sum per diem and expenses of attendance, if any, may be allowed for attendance at each meeting of the Board and for attendance at state, area, regional, national and other meetings on behalf of the Cooperative where attendance is authorized by the Board. No director shall receive compensation for serving the Cooperative in any other capacity, nor shall any close relative of a director receive compensation for serving the Cooperative, unless the payment and amount of compensation shall be specifically authorized by a vote of the members or the service of such director or close relative shall have been certified by the Board as an emergency measure. Close relatives shall be deemed to include, but not necessarily limited to spouse, parent, children, brothers and sisters.”

The pertinent statutory provision is section 35-18-311(2) MCA which provides:

“(2) Without approval of the membership, trustees shall not receive any salaries for their services as trustees and, except in emergencies, shall not be employed by the Cooperative in any capacity involving compensation. The bylaws may, however, provide that a fixed fee and expenses of attendance, if any, may be allowed for attendance at each meeting of the board of trustees.”

The District Court found on this point that at the annual meeting of September 21, 1977, an auditor’s report was presented to the members which included the per diem and expenses paid to the trustees during the years 1976 and 1977 and that these financial reports were approved by a motion duly seconded and carried. The court found as a fact that the $75 per diem rate had been established under Art. V, Section 7 of the bylaws of the cooperative and [48]*48approved by the members of the 1977 annual meeting as a proper payment.

Dreyer and Townley, in their appeal, do not quarrel with the idea that the past expenses or per diem paid to the trustees may have been ratified by the membership. They content that prospective payments do not have the prior approval of the membership and that accordingly they are entitled to a mandate forbidding such possible prospective payments.

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Bluebook (online)
598 P.2d 205, 183 Mont. 43, 1979 Mont. LEXIS 840, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dreyer-v-board-of-trustees-of-mid-rivers-telephone-inc-mont-1979.