Church Business Meetings

A Utah court ruled that an action taken by members of a nonprofit association by mail-in ballot was invalid since it was not authorized by nonprofit corporation law.

Church Law and Tax2000-11-01

Church Business Meetings

Key point 6-12.1. Church membership meetings must be conducted in accordance with the procedural requirements ordinarily specified in the church’s governing documents. The most common requirements pertain to notice, quorum, and voting. Church Business Meetings

A Utah court ruled that an action taken by members of a nonprofit association by mail-in ballot was invalid since it was not authorized by nonprofit corporation law or the association’s own bylaws. The trustees of a nonprofit association decided to update some of the association’s policies. Recommended policies were sent to each member along with a ballot. A majority of the membership returned their mail-in ballots expressing their approval of the new policies. Some of the members who opposed the revised policies filed a lawsuit challenging the legality of the voting procedure. In particular, they claimed that the mail-in balloting procedure was invalid because it is not recognized by either state nonprofit corporation law or the association’s own bylaws. A state appeals court concluded that the association’s policies could be amended only by a majority vote at a duly called meeting of the members. The court quoted the following provision in the state nonprofit corporation law addressing action by members of a corporation:

Any action required by this act to be taken at a meeting of the members … of a nonprofit corporation, or any action which may be taken at a meeting of the members … may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the members entitled to vote with respect to the subject matter thereof.

The court noted that the trustees received only 175 total ballots and only 149 ballots in favor of the revised policies, and therefore they lacked “unanimous written consent” to amend the policies in the absence of a shareholders meeting. As a result, the trustees “did not strictly comply with the act’s requirement of unanimous written consent.”

Further, the court concluded that the trustees failed to comply with the voting procedures specified in the association’s own bylaws which “contemplate action taken only at a duly constituted meeting.” For example, a bylaw section titled “Voting Requirements” provides: “When a quorum is present in person or represented by proxy at any meeting, the vote of a majority of the membership present in person or by proxy shall decide any question brought before such meeting …. All votes may be cast by the members either in person or by proxy.” The court concluded that “it is clear that the trustees did not comply with the voting procedures required by the act and by their own bylaws,” and that “only votes taken in compliance with a corporation’s constitution and bylaws are binding.”

The trustees argued that even if mail-in balloting did not comply with required procedures, the dissident members waived their objections to the procedural irregularities by failing to object to the procedure until after the amendments were adopted. The trustees relied on the following provision in the association’s bylaws: “All inaccuracies or irregularities in calls, notices of meeting and in the manner of voting, form of proxies, credentials and method of ascertaining those present, shall be deemed waived if no objection is made at the meeting.” The court pointed out that this language “plainly applies to waiver of procedural irregularities at a duly convened meeting. This provision thus does not apply where no meeting is convened and the lack of a meeting forms the basis of plaintiffs’ complaint.”

Application. This case illustrates the importance of compliance with nonprofit corporation law and bylaw provisions governing voting. Generally, whether or not proxy, absentee, or mail-in balloting are legally permissible will depend on the exact wording of a church’s bylaws. If the bylaws do not address the issue, and the church is incorporated, then the state nonprofit corporation law should be consulted. This case illustrates that noncompliance with such provisions can nullify a vote. It is a good practice for church leaders to be familiar with these provisions in advance of annual or special business meetings so that consistent and accurate responses can be given to those who ask about the permissibility of proxy, absentee, or mail-in voting. If in doubt, check with a local attorney who can review your governing documents and state nonprofit corporation law and provide you with an opinion. Levanger v. Vincent, 3 P.3d 187 (Utah App. 2000).

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