Worldmark, the Club v. Wyndham Resort Development Corp.

187 Cal. App. 4th 1017, 114 Cal. Rptr. 3d 546
CourtCalifornia Court of Appeal
DecidedAugust 25, 2010
DocketC061019
StatusPublished
Cited by21 cases

This text of 187 Cal. App. 4th 1017 (Worldmark, the Club v. Wyndham Resort Development Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Worldmark, the Club v. Wyndham Resort Development Corp., 187 Cal. App. 4th 1017, 114 Cal. Rptr. 3d 546 (Cal. Ct. App. 2010).

Opinion

Opinion

"BLEASE, Acting P. J.

California's Corporations Code grants members of a nonprofit mutual benefit corporation the right to inspect and copy, or obtain for a reasonable charge, the record of the names, addresses, and voting rights of the members of the corporation upon 10 business days’ written notice, provided it is for a purpose reasonably related to the person’s interest as a member. (Corp. Code, § 8330, subd. (a)(1), (2).) 1 Such a record may be kept in electronic form. (§ 8320.) A record that is “written” includes an “electronic communicationQ” (§§ 5079, 8310) and an electronic communication includes an e-mail. (§§ 5079, 20.)

Appellant WorldMark, The Club (WorldMark), is a California nonprofit mutual benefit corporation owned by its more than 260,000 members. It owns vacation time-share resorts throughout North America, including California, and the Pacific. Appellant Wyndham Resort Development Corporation (Wyndham) is an Oregon corporation that manages the operations of WorldMark’s resorts pursuant to a management agreement.

A WorldMark member, respondent Robin Miller, invoked section 8330 to demand that WorldMark “make available” to its members a petition proposing amendments to the corporation’s bylaws. When WorldMark refused to do *1022 so, Miller demanded a right to inspect and copy WorldMark’s membership records, including the e-mail addresses of its members, for the purpose of distributing his petition to amend the bylaws. E-mail is one of the methods that WorldMark uses to communicate with its members. When WorldMark denied the demand, it proposed the use of a third party mail house to send the petition by conventional mail as a “reasonable alternative” that achieved the purpose identified in Miller’s demand. (§§ 8330, subds. (b) & (c), 8331, subd. (a).)

When Miller refused, WorldMark petitioned the superior court to set aside Miller’s demand (§ 8331, subd. (a)) on the ground it had satisfied its statutory obligations in proposing an alternative (§ 8330, subd. (b)(1)). The trial court denied the petition because the alternative was not reasonable, as it was too costly, and ordered WorldMark to allow Miller to inspect and copy WorldMark’s membership register, including the names, addresses, e-mail addresses, telephone numbers, and voting rights of its members. (§ 8331.) This appeal followed.

WorldMark’s primary contention is that there is no statutory authority for the trial court’s order requiring it to produce its members’ e-mail addresses. We shall conclude that the term “members’ . . . addresses,” in section 8330, subdivision (a)(1), which a corporation is required to disclose, is sufficiently broad to encompass e-mail addresses in light of the section’s purpose and in light of allied sections that allow a corporation to communicate with its members for the purpose of the corporation’s business.

We shall modify the trial court’s order to provide that the information Miller seeks may be made available to him electronically at his option, that no further written demand is necessary, and affirm the order as modified.

FACTUAL AND PROCEDURAL BACKGROUND

WorldMark is a California nonprofit mutual benefit corporation. It is owned by its more than 260,000 members. WorldMark owns vacation time-share resorts in California and throughout North America and the Pacific. WorldMark members own credits, rather than a fractional ownership interest in a particular resort.

Wyndham is an Oregon corporation that manages the operations of WorldMark’s resorts pursuant to a management agreement. All of WorldMark’s properties were purchased and developed by Wyndham. Wyndham transferred ownership of the resorts to WorldMark, and retained *1023 the exclusive right to market and sell the original credits created by the development of each resort. WorldMark members may also advertise, sell, and transfer their credits to others. 2 Other companies also compete with Wyndham for the resale of existing time-share credits.

Miller’s first attempt to contact other WorldMark members is evidenced by a letter dated August 8, 2008, addressed to the WorldMark board of directors. Enclosed with the letter was a membership petition with proposed resolutions attached. Miller requested that the board make the petition available to the membership via WorldMark’s e-mail list in order to have the measures voted on at WorldMark’s annual meeting, which was scheduled to be held on October 23, 2008. Miller did not request a list of WorldMark member e-mail addresses, but merely requested that the board distribute his petition via e-mail. Miller indicated that by including the measures at the board’s annual meeting, the significant expense of calling a special meeting would be avoided.

Miller’s proposed petition expressed a concern over the domination of WorldMark’s board of directors by current or former Wyndham executives, the failure to conduct meetings at which member motions could be raised and voted upon, the absence of any independent owners on the board, and the lack of meaningful member representation in the governance of WorldMark. The proposed resolutions would, if passed, revise WorldMark’s bylaws to address these concerns.

The response to Miller’s letter came from Stephanie Aardal, WorldMark’s director of board and owner relations. Aardal’s letter stated that Miller’s request did not comply with section 3.3(c) of WorldMark’s bylaws requiring a written request signed by members holding 5 percent of the voting power. 3 Miller’s request was declined.

*1024 Miller sent a second letter on August 25, 2008. He urged the board to reconsider, and noted that the board could call a meeting without obtaining any signatures, and he was requesting that the board do so. He also noted that no signatures were required to distribute his petition to the membership.

Aardal answered Miller’s letter, and again informed him that it was his responsibility to gather the minimum 5 percent owner support to bring the petition to the membership. Aardal stated that the board would take appropriate action when he submitted the names of those signing the petitions and copies of the original signed petitions, provided he had received a valid number of signatures.

Miller responded by letter (his third) on September 9, 2008. Since the board refused the request to distribute his petition, he gave notice that he wanted an opportunity within five days to personally inspect WorldMark’s membership records, including its e-mail list. He acknowledged that he would use the information only to distribute his petition.

Instead of scheduling an opportunity for Miller to inspect the membership register as provided in the WorldMark bylaws, Aardal wrote back to Miller informing him that the membership register did not include e-mail addresses, and enclosing a copy of WorldMark’s “Policies and Procedures” regarding the inspection of WorldMark’s membership roster. The Policies and Procedures were approved by WorldMark’s board of directors, but were not part of the bylaws.

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Cite This Page — Counsel Stack

Bluebook (online)
187 Cal. App. 4th 1017, 114 Cal. Rptr. 3d 546, Counsel Stack Legal Research, https://law.counselstack.com/opinion/worldmark-the-club-v-wyndham-resort-development-corp-calctapp-2010.