ST. MICHAEL BAPTIST CHURCH, INC. NO. 21-CA-573
VERSUS FIFTH CIRCUIT
JAMES E. TUCKER, KEVIN SINCENO, COURT OF APPEAL LILLIAN BREAUX, CLEASTER PAUL, ROYAL BUTLER, FRIENDS OF ST. STATE OF LOUISIANA MICHAEL, JOHN DOE(S) AND JANE DOE(S)
ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 809-950, DIVISION "I" HONORABLE NANCY A. MILLER, JUDGE PRESIDING
April 28, 2022
ROBERT A. CHAISSON JUDGE
Panel composed of Judges Fredericka Homberg Wicker, Robert A. Chaisson, and John J. Molaison, Jr.
REVERSED IN PART; AFFIRMED IN PART, AS AMENDED RAC FHW JJM COUNSEL FOR PLAINTIFF/APPELLANT, ST. MICHAEL BAPTIST CHURCH, INC. John D. Miranda Courtney P. Newton
COUNSEL FOR DEFENDANT/APPELLEE, JAMES E. TUCKER, KEVIN SINCENO, LILLIAN BREAUX, CLEASTER PAUL, ROYAL BUTLER, & FRIENDS OF ST. MICHAEL Justin E. Alsterberg Graham H. Williams CHAISSON, J.
In this suit arising from a corporate governance dispute, plaintiff St. Michael
Baptist Church, Inc. appeals a judgment of the trial court sustaining defendants’
exceptions of lack of procedural capacity and no right of action and dismissing the
petition with prejudice. For the following reasons, we reverse in part and affirm in
part, as amended, the judgment of the trial court.
FACTS AND PROCEDURAL HISTORY
St. Michael Baptist Church, Inc. (“SMBCI”) is a registered Louisiana
nonprofit corporation originally incorporated on December 13, 1963. It has
historically occupied a campus at 315 James Street, Kenner, Louisiana. In the late
1990’s, the church expanded to another location at 701 Colony Park Drive,
LaPlace, Louisiana. SMBCI is the registered owner of the immovable properties at
both locations. In 2011, some members of the congregation filed suit in the 24th
Judicial District Court challenging the corporate governance of the church.1
In that suit, the trial court found that the church had failed to follow
corporate formalities for nearly forty years by neglecting to hold board of trustee
elections in accordance with SMBCI’s articles of incorporation. This litigation
resulted in a court appointed Special Master overseeing elections for the governing
board of trustees on March 24, 2012, at which time seven members were elected to
the board of trustees by a majority vote. This election was challenged on the basis
that some church members had been excluded from participation, but was
eventually upheld by the court.2 The corporation subsequently adopted Amended
and Restated Articles of Incorporation in 2014. Since that time, members from the
LaPlace location have made up a majority of the Board of Trustees.
1 24th JDC Case Nos. 697-650, 698-973, 700-770, and 703-158. 2 24th JDC Case No. 715-230.
21-CA-573 1 In 2018, disputes arose between members at the Kenner congregation and
members at the LaPlace congregation over the process for legal and financial
separation of SMBCI into separate legal corporations for their respective
campuses. On September 4, 2020, SMBCI filed a Petition for Temporary
Restraining Order, Preliminary Injunction, Permanent Prohibitory and Mandatory
Injunction, Declaratory Judgment, and Damages against Kenner congregation
members James E. Tucker, Kevin Sinceno, Lillian Breaux, Cleaster Paul, and
Royal Butler, and the Friends of St. Michael Baptist Church, a nonprofit
organization that the Kenner members set up to fulfill the financial obligations of
the Kenner campus.
In its petition, SMBCI alleged that, according to bylaws adopted at a
February 28, 2020 meeting of the board of trustees, the worshipers at the Kenner
location (including the named defendants) were removed from the membership
rolls maintained by the corporation. SMBCI sought access to the Kenner
properties as well as fruits and revenues derived from the properties and to forbid
defendants from occupying or worshiping there.
In response to this petition, defendants filed a dilatory exception of lack of
procedural capacity and/or peremptory exception of no right of action wherein they
alleged that the board of trustees filed the petition without proper authority or
capacity. Defendants alleged that the board of trustees regularly failed to follow
the procedures set forth in SMBCI’s governing documents, failed to provide
required notices to members worshiping in SMBCI’s Kenner church, attempted to
conduct business without the required number of trustees, improperly removed a
trustee, and ignored mandatory term limits for board members.
The trial court conducted a hearing on the exceptions on September 24,
2020, at which time it considered the following evidence: that there were only four
members of the board of trustees, one short of the five required by the articles of
21-CA-573 2 incorporation; that two members of the board of trustees, Rita Scott and Mervin
Williams, were never properly elected to the board because notice of their elections
was not sent to Kenner congregants; that two members of the board needed to be
re-elected because their terms had expired; and that the Kenner congregants were
never given notice of the February 28, 2020 meeting during which they were
expelled from membership in SMBCI. Following the hearing the trial court
sustained defendants’ exceptions and dismissed SMBCI’s petition without
prejudice. A written judgment to that effect was rendered on December 22, 2020.
SMBCI did not seek review or reconsideration of that judgment.
On January 12, 2021, SMBCI filed a First Supplemental and Amending
Petition for Temporary Restraining Order, Preliminary Injunction, Permanent
Prohibitory and Mandatory Injunction, Declaratory Judgment, Judgment of
Eviction, and Damages. In its amended petition, SMBCI avers and reasserts its
original claims and makes more detailed factual allegations concerning 2017 and
2018 negotiations to legally separate the Kenner and LaPlace congregations and
the financial operations of the church. The amended petition also alleges that on
October 28, 2020, following the trial court’s hearing on the original petition, senior
members in good standing with SMBCI were “provided information and given the
opportunity to elect members to the Board of Trustees, approve an amendment to
the Articles of Incorporation changing domicile, ratify the Board of Trustees’ past
actions related to James Tucker, reaffirm the definition of [church] sponsored
events, disavow affiliation or connection with ‘Friends of St. Michael’, ratify the
February 28, 2020 Resolution of the Board of Trustees removing the disloyal
Kenner members not in good standing and authorizing the filing of [the] lawsuit,
and to recognize the [SMBCI] debt owed to Mr. and Mrs. Henry Hardy for loans
made to [SMBCI]” in the amount of $83,000 at the time of filing the amended
petition. The petition further alleges that on or about November 27, 2020, the
21-CA-573 3 senior members in good standing elected Brian Carter, Henry Hardy, Rita Scott,
and Mervin Williams to serve on the board of trustees. SMBCI attached to this
amended petition numerous documents including meeting minutes, letters, and
financial statements purportedly substantiating its claims.
In response to the amended petition, defendants again filed a dilatory
exception of lack of procedural capacity and peremptory exception of no right of
action wherein they reincorporated and restated the arguments and exhibits
attached to their original exceptions and opposition. Defendants argued that the
fundamental errors outlined in their original opposition remained, and that by
holding an improper vote to ratify its prior improper votes, SMBCI had performed
the functional equivalent of cleaning the floor with a dirty mop. In separate
proceedings, representatives of the Kenner congregation filed a Petition for Writ of
Mandamus asking that the court order elections for the board of trustees.3
On May 17, 2021, the trial court heard arguments on the exceptions, at
which time it again found that the board of trustees acted without legitimate
authority and sustained the exceptions of lack of procedural capacity and no right
of action and dismissed the suit with prejudice. The court did not consider
additional evidence at that time. Following this ruling, SMBCI proffered
additional documents and the testimony of witnesses Pastor Randy Scott Vincent;
Rita Scott, secretary of the board of trustees; Mattie Hardy, clerk of the board of
trustees; and Mervin Williams, a member of the board of trustees.
On appeal, SMBCI argues that the trial court legally erred in sustaining
defendants’ dilatory exception of lack of procedural capacity, legally erred in
sustaining defendants’ peremptory exception of no right of action and dismissing
3 24th JDC Case No. 815-307.
21-CA-573 4 SMBCI’s petition with prejudice, and legally and manifestly erred in denying
SMBCI’s preliminary injunction.
DISCUSSION
On appeal, this Court reviews the judgments sustaining exceptions of no
right of action and lack of procedural capacity under the de novo standard of
review to determine whether the trial court’s ruling was correct or incorrect as a
matter of law. English Turn Prop. Owners Ass’n v. Taranto, 16-0319 (La. App. 4
Cir. 4/19/17), 219 So.3d 381, 387, writ denied, 17-1100 (La. 10/16/17), 318 So.3d
702. While both exceptions raise questions of law, they are not interchangeable.
Mt. Zion Baptist Ass’n v. Mt. Zion Baptist Church #1 of Revilletown Park, 16-0151
(La. App. 1 Cir. 10/31/16), 207 So.3d 414, 417, writ denied, 16-2109 (La. 2/3/17),
215 So.3d 697. Accordingly, each exception must be considered separately.
No Right of Action
The peremptory exception of no right of action functions as a test of whether
the plaintiff has a real and actual interest in the action. La. C.C.P. art. 927. In
examining the exception of no right of action, a court focuses on whether a
plaintiff belongs to a particular class of persons to whom the law grants the cause
of action asserted in the suit. Aucoin-Hart Jewelers, Inc. v. Metairie Shopping
Ctr., L.L.C., 18-36 (La. App. 5 Cir. 5/30/18), 249 So.3d 1011, 1015. Evidence
supporting or controverting an exception of no right of action is admissible. La.
C.C.P. art. 931.
On appeal, SMBCI argues that the trial court erred in sustaining defendants’
exception of no right of action because SMBCI is the sole title record owner of the
disputed properties and no other entity or individual other than SMBCI has the
right to petition for recognition of its property rights, return of its property, and
recovery for damages. We agree. Upon de novo review of the record, which
includes copies of the conveyance records showing SMBCI is the sole owner of the
21-CA-573 5 properties in question, we find that the trial court erred in sustaining defendants’
exception of no right of action. Accordingly, we reverse that part of the trial
court’s judgment sustaining the peremptory exception of no right of action.
Lack of Procedural Capacity
The dilatory exception of lack of procedural capacity raises the issue of want
of capacity of the plaintiff to institute and prosecute the action and stand in
judgment, and/or challenges the authority of a plaintiff who appears in a purely
representative capacity. La. C.C.P. art. 926; English Turn Prop. Owners Ass’n,
219 So.3d at 387. Under Louisiana law, procedural capacity is presumed unless
challenged by the dilatory exception. La. C.C.P. art. 855. The lack of authority on
the part of an agent of a corporation to file a suit on its behalf is properly
considered under the dilatory exception. Cent. Sur. & Ins. Corp. v. Canulette
Shipbuilding Co., 195 So. 114, 115 (La. 1st Ct. App. 1940). Evidence supporting
or controverting the exception of lack of procedural capacity is admissible. La.
C.C.P. art. 930.
Corporations are juridical persons with the power to sue and be sued,
complain and defend in its corporate name. La. C.C. art. 24; La. R.S. 12:207.
Under Louisiana’s nonprofit corporation law, all corporations must have a board of
directors, and corporate powers may only be exercised by the authority of the
board of directors, subject to any limitations set forth in the articles of
incorporation. La. R.S. 12:224. The board of directors may adopt bylaws for the
corporation that contain provisions for managing the business and regulating the
affairs of the corporation that are not inconsistent with the law or the articles of
incorporation. La. R.S. 12:222. Under traditional practice, a board of directors
acts by the adoption of resolutions at regular or special meetings. La. R.S. 12:224.
Where written notice of meetings is required and such notice is deficient, the
actions taken at such a meeting are invalid. First Union Baptist Church of
21-CA-573 6 Alexandria v. Banks, 533 So.2d 1305, 1309 (La. 3rd Ct. App. 1988); Bethlehem
Missionary Baptist Church v. Henderson, 522 So.2d 1339, 1341 (La. 2nd Ct. App.
1988); Blum v. Latter, 163 So.2d 189, 194 (La. 4th Ct. App. 1964); Jones v.
Shreveport Lodge No. 122, B. P. O. E., 221 La. 968, 974, 60 So.2d 889, 891
(1952).
SMBCI maintains that its board of trustees has, at all times, acted in
accordance with the law, the 2014 Articles of Incorporation, and their bylaws.
With regard to this suit in particular, SMBCI points to a resolution adopted by the
board of trustees on February 28, 2020, authorizing legal action, and a subsequent
ratification of that resolution on November 27, 2020. In contrast, defendants
maintain that SMBCI’s actions are unauthorized because the board of trustees was
improperly constituted and failed to follow the notice requirements set forth in the
organization’s articles of incorporation and the bylaws.
Quorum
According to evidence of the meeting minutes provided by SMBCI, as well
as the proffered testimony of board members, at the time of the February 28, 2020
meeting, the board of trustees was comprised of four members: Brian Carter,
Henry Hardy, Rita Scott, and Mervin Williams. SMBCI argues that, under La.
R.S. 12:224, the unanimous vote of these four board members was sufficient to
authorize the resolution for legal action against the Kenner members.
La. R.S. 12:224 states in part:
(E)(7) A majority of the board of directors shall be necessary to constitute a quorum for the transactions of business, and the acts of a majority of the directors present at a meeting at which a quorum is present shall be the acts of the board of directors…
The article further provides:
B. … The number of directors shall be fixed by or in the manner provided in the articles of incorporation or if not so fixed shall be the number fixed by, or in the manner provided in the bylaws. … No director shall be elected for a longer single term than five years.
21-CA-573 7 … E. The number, classification, qualifications, compensation, terms of office, manner of election, time and place of meeting, and powers and duties of directors, may, subject to the provisions of this Chapter, be prescribed by the articles or the bylaws.
(Emphasis added)
Pursuant to this language, a corporate board may act in an unauthorized
manner if it fails to follow the provisions of its articles of incorporation and/or
bylaws, or if it fails to follow the law of corporations in those instances where the
articles of incorporation and/or bylaws make no provision. See Canedo v. Vicari,
11-1116 (La. App. 5 Cir. 5/8/12), 99 So.3d 64.
With regard to its board of directors, the 2014 Articles of Incorporation
provide the following:
ARTICLE VIII
All the Corporate powers of this Corporation shall be vested in and exorcised by a Board of Trustees. … (b) There shall be a Board of Trustees, consisting of not less than five (5) and not more than seven (7) members, elected by members of this Corporation, who shall be subject to the supervision and authority of the Church, and who shall have jurisdiction over all the business, financial and other temporal affairs and powers of this Corporation …
ARTICLE IX
No person except a Senior member of this Corporation shall hold office as an officer, Deacon and/or Trustee. Unless he or she is removed from office, or is elected for a shorter period, or ceases to be a member, a person elected as Pastor, Deacon and/or Trustee shall hold such office for a period of five (5) years, except as otherwise provided in the bylaws to allow for staggered terms.
Pastors, Deacons and/or Trustees shall be elected by members of this Corporation, who are entitled to vote, at any meeting duly called, at the direction of the Board of Trustees for that purpose, held not sooner than seven (7) days after notice thereof publicly given to the assembled congregations at both the Kenner and LaPlace locations, and written notice mailed to all communing members.
The uncontroverted evidence in the record indicates: that were no elections
for the Board of Trustees held in 2017, 2018, or 2019; that at the time of the
21-CA-573 8 February 28, 2020 meeting, the terms of board members Henry Hardy and Brian
Carter, who were first elected in 2012, had been expired for nearly three years; and
that there were no temporary appointments or elections to fill the vacancy in the
board caused by the removal of Mr. Tucker from the Board in 2019.
From these facts, it is clear that at the time of the February 28, 2020
meeting, the board of trustees was not acting in accordance with its articles of
incorporation or the requirements of La. R.S. 12:224 because it acted with an
insufficient number of members (four instead of the five required) and two of the
board members were serving terms of greater than five years without re-election.
We therefore find that the resolutions adopted by the board of trustees on February
28, 2020, were invalid and did not authorize the exercise of SMBCI’s corporate
powers to take legal action against defendants.
Notice
The resolutions adopted on February 28, 2020, further purport to remove
dozens of members of the Kenner congregation from the membership roll for
failures to attend “authorized” worship services, failing to make identifiable
financial support, and a demonstrated “disinterest and disloyalty” to SMBCI. This
removal from the membership rolls is inconsistent with the procedure set forth in
the 2015 bylaws, which require that members who do not have registered
attendance, identified financial support, definite service contribution, and
demonstrated interest and loyalty be removed from the list of members in good
standing and placed on a list of inactive members following a mandatory notice, in
writing, of removal to such status from the church Administrative Body.
Following the receipt of such written notice, the inactive members then have two
months to attend, provide identifiable financial support, and demonstrate interest or
loyalty before being dropped from the membership roll. The 2015 bylaws also
grant these members the right to appeal such a determination. Except for the letter
21-CA-573 9 sent by the board of trustees to Mr. Tucker concerning his unauthorized attempt to
open a bank account, there is no evidence in the record of any member of the
Kenner congregation being sent a letter from the church Administrative Body
informing them of their failure to attend authorized services, failure to make
financial support, or failure to demonstrate interest or loyalty to SMBCI as
required by the 2015 bylaws.
On February 28, 2020, the board of trustees unanimously voted on a
resolution amending the bylaws to remove this notice requirement and allow for
immediate revocation of membership by a simple majority vote of the board of
trustees. For the same reasons that we found the board was unauthorized to adopt
a resolution exercising its corporate powers (e.g. that the board was insufficient in
number and two of its members were serving well-expired terms), we find that the
board’s resolution adopting amendments to the 2015 bylaws was also
unauthorized.
In addition to the board of trustees being unauthorized to adopt the
resolution amending the bylaws at the February meeting, this purported
amendment to the 2015 bylaws was inconsistent with the requirements for
amendment as set forth in the bylaws. The 2015 bylaws state:
ARTICLE X - Adoption and Amendments … B. Amendments - These bylaws may be amended or repealed at any duly convened Congregational Meeting. Proposed amendments or repeals shall be submitted in writing to the Administrative Body no later than thirty (30) days prior to the Congregational Meeting the proposal is to be considered. Adoption of the amendment or repeal shall require approval by a simple majority affirmative vote and is subject to the approval by SMBC Board of Trustees. Amendments that are necessitated by amendments made to the SMBC Board of Trustee Bylaws shall require approval by the congregation.
With regard to the Congregation Meeting, the bylaws provide:
21-CA-573 10 ARTICLE V - Congregational Meetings
A. Time and Place - An annual Congregational Meeting shall be held each year in the month of January. The time and place of the annual Congregational Meeting shall be determined by the Administrative Body.
B. Notification - The Administrative Body shall notify members in writing at least two weeks in advance, and announced at Sunday services. …
G. Special Congregational Meetings - In addition to the annual Congregation Meeting, Special Congregational Meetings may also be held. Special Congregational Meetings are governed by the same rules as those pertaining to the annual Congregational Meeting.
Affidavits from the Kenner members indicate that they never received notice of
the December 17, 2019 annual Congregation Meeting at which the motion to
amend the bylaws was offered as required under these bylaws. SMBCI has
provided no evidence of any such notices sent.
Defendants also attest in their affidavits that they never received notice of
the Special Congregation Meeting organized for November 27, 2020, at which
members of the board of trustees were to be re-elected, the amendments to the
bylaws approved, and the resolution authorizing legal action against defendants
adopted. Written notice of such a meeting is required by both the bylaws and the
articles of incorporation. Again, SMBCI has provided no evidence that such
notices were sent to the members of the Kenner congregation.
Upon de novo review, we find that the November 27, 2020 ratifications of
the February 28, 2020 resolutions fail to comport with the requirements for notice
set forth in the articles of incorporation and the bylaws, and are therefore without
effect. Accordingly, we find no error in the trial court’s sustaining of the dilatory
exception of lack of procedural capacity.
21-CA-573 11 La. C.C.P. art. 932 states that when the grounds of the objection sustaining
the dilatory exception cannot be removed by amendment of the petition or other
action of the plaintiff, the action subject to the exception shall be dismissed.
Although we find that the evidence of record shows that the individuals
purporting to act as representatives on behalf of SMBCI in this litigation lack the
procedural capacity to do so, we have also recognized that SMBCI has a right of
action to pursue this litigation, should the appropriately authorized representatives
of SMBCI choose to do so. Consequently, we find that it was error to dismiss
SMBCI’s First Supplemental and Amending Petition with prejudice.
Furthermore, having found that the individuals purporting to act as
representatives on behalf of SMBCI in this litigation lack the procedural capacity
to do so, resulting in the dismissal of their petition, we pretermit any discussion
concerning the denial of the preliminary injunction.
CONCLUSION
The portion of the judgment of the trial court that sustained the exception of
no right of action is reversed. The portion of the judgment of the trial court that
sustained the exception of lack of procedural capacity is affirmed. However, we
amend that portion of the judgment to dismiss SMBCI’s First Supplemental and
Amending Petition without prejudice, rather than with prejudice.
REVERSED IN PART; AFFIRMED IN PART, AS AMENDED
21-CA-573 12 SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
NANCY F. VEGA FREDERICKA H. WICKER CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON ROBERT A. CHAISSON SUSAN S. BUCHHOLZ STEPHEN J. WINDHORST FIRST DEPUTY CLERK HANS J. LILJEBERG JOHN J. MOLAISON, JR. FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400
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21-CA-573 E-NOTIFIED 24TH JUDICIAL DISTRICT COURT (CLERK) HONORABLE NANCY A. MILLER (DISTRICT JUDGE) COURTNEY P. NEWTON (APPELLANT) JOHN D. MIRANDA (APPELLANT) GRAHAM H. WILLIAMS (APPELLEE) JUSTIN E. ALSTERBERG (APPELLEE)
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