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Kemmer v. Newman

Supreme Court of Idaho

December 30, 2016

DUANE KEMMER, KAREN KEMMER, and TIM DOLPH, Plaintiffs-Appellants,
v.
BOB NEWMAN, PHYLLIS MILLER, and RUTH SMITH, Defendants-Respondents, and BOB QUINN, Defendant.

         2016 Opinion No. 157

         Appeal from the District Court of the First Judicial District, State of Idaho, Bonner County. Hon. Barbara A. Buchanan, District Judge.

         District court decision, reversed.

          James, Vernon & Weeks, Coeur d'Alene, for appellants. Daniel M. Keyes argued.

          Featherston Law Firm, Sandpoint, for respondents. Brent C. Featherston argued.

          BURDICK, Justice

         Duane Kemmer, Karen Kemmer, and Tim Dolph (Appellants) appeal the Bonner County district court's decision that Bob Newman, Phyllis Miller, and Ruth Smith (Respondents) were properly elected as directors of New Life Missions, Inc. church (NLM) at a special membership meeting. On appeal, Appellants argue the district court erred in reaching its decision because the special meeting was improperly called in violation of the Idaho Nonprofit Corporation Act. We reverse.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         NLM was incorporated as a non-profit corporation in 2001 by Jack Kirk, Ray Breeden, Kenneth Ewing, and Alan Kirk, all of whom served on the initial NLM Board of Directors(Board). NLM's Bylaws were also adopted in 2001 by the same men. The NLM Bylaws require that a membership roll of the "voting membership" be kept. Testimony at trial was clear that no such roll was ever kept. The NLM Bylaws also called for monthly meetings of the Board and an annual membership meeting to elect directors and conduct other church business. In practice, however, those meetings did not occur.

         In August 2009, NLM was administratively dissolved for failure to timely file an annual report with the Idaho Secretary of State. That same month, Karen Kemmer, acting as secretary/treasurer of NLM, filed an application for reinstatement, which was accepted and approved by the Idaho Secretary of State. The reinstatement report for NLM shows that at the time of reinstatement, James Tapani was president/senior pastor, [1] Karen Kemmer was secretary/treasurer, and Ruth Smith, Duane Kemmer, and Tim Dolph were directors. In February 2010, Tapani resigned as senior pastor.

         In March 2010, the Board met and discussion was held on who should be the new senior pastor. Bob Newman was asked if he would be interested in serving as the senior pastor, to which he replied that he would. Newman began serving in the senior pastor role from that time forward; however, no formal vote on Newman's appointment as senior pastor was taken by the Board or the voting membership. In May 2010, the Board scheduled a meeting with Ken Ewing to discuss the possibility of merging NLM with Ewing's church, the Church on the Solid Rock.

         Following the meeting with Ewing, Kemmer[2] made statements to Newman, Smith, and others that he no longer wanted to be a Board member. However, Kemmer attended meetings on July 17 and 21, 2010. Sometime in July 2010, although not approved by the Board, Dolph made a statement to members of NLM that the Board had decided to merge NLM with Ewing's church. Evidence showed that the members in attendance at the meeting did not respond favorably to Dolph's announcement, and Dolph left the meeting upset. Thereafter, Smith, acting on her own, called for a member's special meeting to be held on August 1, 2010. The special meeting was announced from the church pulpit for three consecutive Sundays-July 18, 25, and August 1, 2010. Kemmer and Dolph both assert that they had no knowledge of the announcements or the August 1, 2010 special meeting. At the special meeting, Phyllis Miller, Bob Newman, and Ruth Smith were elected as directors.

          Appellants brought suit on December 7, 2011, alleging that Smith was not authorized to call the August 1, 2010 special meeting, and, therefore, the election of directors at that meeting was invalid. In May 2014, the district court held a bench trial, and on August 8, 2014, issued its Memorandum Decision. In its decision, the district court ruled that Respondents were the rightful directors of NLM because the August 1, 2010 special meeting was properly called and Newman had the authority to approve the special meeting. The district court found that both Kemmer and Dolph had "resigned and/or absented themselves" as directors. Thus, the district court held that Smith, as the only remaining director, was authorized under Idaho Code section 30-3-47[3] to call a special meeting. The district court also found that during a Board meeting held on March 28, 2010, Newman was appointed senior pastor of NLM. Appellants timely appeal.

         II. STANDARD OF REVIEW

         This Court exercises free review over the district court's conclusions of law, but will not set aside a finding of fact unless it is clearly erroneous. Insight LLC v. Gunter, 154 Idaho 779, 783, 302 P.3d 1052, 1056 (2013). When deciding whether findings of fact are clearly erroneous, this Court does not substitute its view of the facts for that of the trial court. Bramwell v. South Rigby Canal Co., 136 Idaho 648, 650, 39 P.3d 588, 590 (2001). Rather, this Court examines the record to see if challenged findings of fact are supported by substantial and competent evidence. Miller v. St. Alphonsus Reg'l Med. Ctr., Inc., 139 Idaho 825, 832, 87 P.3d 934, 941 (2004). Evidence is regarded as substantial if a reasonable trier of fact would accept it and rely upon it in determining whether a disputed point of fact has been proven. Id.

         III. ANALYSIS

         Appellants raise two issues on appeal: (A) whether Newman was properly appointed as senior pastor, and (B) whether Smith improperly called the August 1, 2010 special meeting.

         A. Newman was not properly ...


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