An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced
ure.
NO. COA03-691
NORTH CAROLINA COURT OF APPEALS
Filed: 20 April 2004
LEE E. KNOTT,
Plaintiff,
v
.
Beaufort County
No. 02 CVS 832
MARTY POFFENBERGER and
MAUREEN PULCINI,
Defendants.
Appeal by plaintiff from judgment entered 12 February 2003 by
Judge William C. Griffin, Jr., in Beaufort County Superior Court.
Heard in the Court of Appeals 1 March 2004.
Lee E. Knott, Jr., pro se, for plaintiff-appellant.
Rodman, Holscher, Francisco & Peck, P.A., by R. Brantley Peck,
Jr., for defendant-appellee Poffenberger.
Maureen Pulcini, pro se, for defendant-appellee Pulcini.
LEVINSON, Judge.
The present appeal arises from a dispute as to whether
plaintiff (Lee E. Knott) is entitled to inspect the corporate
records of the Humane Society of Beaufort County (Humane Society),
a nonprofit corporation organized under the laws of North Carolina.
Plaintiff appeals from a trial court order dismissing his claim to
inspect the Humane Society's records pursuant to Rule 12 of the
North Carolina Rules of Civil Procedure. We affirm in part and
reverse in part. On 18 September 2002, plaintiff filed a complaint against
defendants (Marty Poffenberger and Maureen Pulcini) in their
individual capacities alleging, in pertinent part:
3. The plaintiff is a member in good standing of the
Humane Society of Beaufort County.
4. The defendant Marty Poffenberger is Chairman of the
Board of Directors of the Humane Society of Beaufort
County.
5. The defendant Maureen Pulcini is Secretary of the
Humane Society of Beaufort County.
6. On August 23, 2002 the plaintiff requested the
defendant Maureen Pulcini to make available to him the
minutes of certain meetings of the Board of Directors of
the Humane Society of Beaufort County.
7. This request was denied by Maureen Pulcini on the
grounds that she had been instructed by the Chairman of
the Board of Directors of the Humane Society of Beaufort
County that the minutes of the meetings of the Board were
not to be made available to the members of the Humane
Society of Beaufort County.
8. On August 26, 2002 the plaintiff mailed a written
request to both defendants that all minutes of the
meetings of the members and all minutes of the meetings
of the Board of Directors held during the calendar years
2001 and 2002 be made available to him for inspection and
copying and requested further that the defendants advise
him of a time and place where he could inspect and copy
said minutes.
9. The defendants have refused to comply with the
aforesaid written request.
10. The refusal of the defendants to permit the
inspection of the minutes is contrary to the provisions
of the Bylaws of the Humane Society of Beaufort County
and contrary to the provisions of the North Carolina
Nonprofit Corporation Act.
Each defendant filed an answer and motions to dismiss pursuant
to N.C.G.S. § 1A-1, Rule 12(b)(1), (6), and (7) on the grounds that
(1) the superior court lacked subject matter jurisdiction, (2) plaintiff's complaint failed to state a claim upon which relief may
be granted, and (3) the complaint failed to join a necessary party
to the litigation. The trial court entered an order summarily
granting the defendants' motions to dismiss pursuant to Rule 12 of
the Rules of Civil Procedure[.] From this order, plaintiff
appeals, making an argument as to each potential ground of
dismissal.
__________________________________
We first address plaintiff's argument that the trial court
erred if it dismissed plaintiff's claim for lack of jurisdiction.
We agree with this contention.
[T]he standard of review on a motion to dismiss under Rule
12(b)(1) for lack of jurisdiction is
de novo.
Country Club of
Johnston County, Inc. v. United States Fid. & Guar. Co., 150 N.C.
App. 231, 238, 563 S.E.2d 269, 274 (2002). Pursuant to N.C.G.S. §
55A-16-04(a) and (b) (2003), the superior court in the county
where [a nonprofit] corporation's principal office . . . is
located has jurisdiction to permit inspection and copying of
corporate records by a member who complies with the requirements of
the Nonprofit Corporation Act. These provisions place subject
matter jurisdiction to hear claims for inspection of the records of
the Humane Society in the Beaufort County Superior Court.
Accordingly, plaintiff's claim could not be properly dismissed for
lack of subject matter jurisdiction.
______________________________________
We next address plaintiff's contention that the trial court
erred in granting defendants' motion to dismiss plaintiff's claim
pursuant to N.C.G.S. § 1A-1, Rule 12(b)(6) for failure to state a
claim upon which relief may be granted. Plaintiff argues that his
complaint alleges the following actionable claims: (1) an action to
enforce the bylaws of the Humane Society, (2) an action to inspect
the corporate records of the Humane Society pursuant to the common
law, and (3) an action to inspect the minutes of the meetings of
the membership and board of directors of the corporation under the
North Carolina Nonprofit Corporation Act, N.C.G.S. § 55A-1-01, et
seq. We conclude that plaintiff's claim states only a limited
claim for inspection of the minutes of the Humane Society's
membership meetings.
On a motion to dismiss pursuant to Rule 12(b)(6) of the North
Carolina Rules of Civil Procedure, the standard of review is
whether, as a matter of law, the allegations of the complaint,
treated as true, are sufficient to state a claim upon which relief
may be granted under some legal theory. Block v. County of
Person, 141 N.C. App. 273, 277, 540 S.E.2d 415, 419 (2000)
(citation and quotation marks omitted). The complaint must be
liberally construed, and the court should not dismiss the complaint
unless it appears beyond a doubt that the plaintiff could not prove
any set of facts to support his claim which would entitle him to
relief. Id. at 277-78, 540 S.E.2d at 419. Dismissal of a
complaint under Rule 12(b)(6) is proper when one of the followingthree conditions is satisfied: (1) when the complaint on its face
reveals that no law supports plaintiff's claim; (2) when the
complaint on its face reveals the absence of fact sufficient to
make a good claim; (3) when some fact disclosed in the complaint
necessarily defeats plaintiff's claim. Jackson v. Bumgardner, 318
N.C. 172, 175, 347 S.E.2d 743, 745 (1986) (citation omitted).
With respect to plaintiff's contention that his complaint
establishes a claim to enforce the bylaws of the Humane Society,
plaintiff has not directed us to the legal basis for any such
claim. The complaint states that [t]he refusal of the defendants
to permit the inspection of the minutes is contrary to the
provisions of the Bylaws of the Humane Society of Beaufort
County[.] However, in his brief to this Court plaintiff has not
propounded a legal theory, pursuant to which relief may be granted,
for the alleged breach of the Humane Society's bylaws. Thus,
plaintiff leaves to our conjecture whether his complaint sets forth
a derivative claim for enforcement of the bylaws, a suit in
contract, or some other action.
N.C.R. App. P. 28(b)(6) provides:
An appellant's brief . . . shall contain . .
.[a]n argument, to contain the contentions of
the appellant with respect to each question
presented. . . . Assignments of error . . . in
support of which no reason or arguments is
stated or authority cited will be taken as
abandoned. . . . The body of the argument
shall contain citations of the authorities
upon which the appellant relies.
Where a party has failed to cite any authority in support of one of
its contentions, this Court has declined to consider the issue. Markham v. Nationwide Mut. Fire Ins. Co., 125 N.C. App. 443, 448,
481 S.E.2d 349, 352 (1997). Therefore, in the present case, where
plaintiff has neither made any arguments nor cited any authority in
support of his assertions that his suit to enforce the Humane
Society bylaws is actionable, we decline to consider the issue.
With respect to plaintiff's argument that his complaint
establishes a common law claim for inspection of corporate records,
we conclude that the complaint is insufficient to make out such a
claim.
The right of a shareholder to make inspections of corporate
records under the common law has been formulated as follows:
A shareholder of a . . . private corporation,
has, in the absence of statutory restriction,
a common law right to inspect and examine the
books and records of the . . . corporation at
a proper time and place and for a proper
purpose, and his right of inspection and
examination is generally enforceable by
mandamus proceedings against the . . .
corporation and its officers or agents having
charge of the books and records sought to be
reached.
Cooke v. Outland, 265 N.C. 601, 610, 144 S.E.2d 835, 841 (1965)
(emphasis added); see also Parsons v. Jefferson-Pilot Corp., 333
N.C. 420, 424-26, 426 S.E.2d 685, 688-89 (1993) (concluding that
the model business corporation act preserves a shareholder's common
law rights of inspection, including the right to make reasonable
inspections . . . of a public corporation for proper purposes).
Since the common law right of inspection and
examination grows out of the shareholder's
relationship to the corporation, and is given
to him for the protection of his interests, it
is generally recognized that the common law
right is qualified by requiring that it beexercised in good faith for purposes germane
to his status as a shareholder[.]
Cooke, 265 N.C. at 610, 144 S.E.2d at 841.
Even at common law the writ of mandamus would
not issue as a matter of course to enforce the
mere naked right or to gratify mere idle
curiosity, but it was necessary for petitioner
to show some specific interest at stake
rendering the inspection necessary, or some
beneficial purpose for which the examination
is desired.
Id. at 611, 144 S.E.2d at 842 (quoting 5 Fletcher, Cyclopedia
Corporations, Per. Ed. § 2214). These common law principles have
been used to provide guidance in claims governed by the Business
Corporation Act; in the context of such a case, this Court held
that where a shareholder states a proper purpose in his complaint,
[t]he burden of proof rests upon the [corporation], if [it] wishes
to defeat the shareholder's demand, to allege and show by facts, if
[it] can, that the shareholder is motivated by some improper
purpose. Carter v. Wilson Constr. Co., Inc., 83 N.C. App. 61, 65,
348 S.E.2d 830, 832 (1986) (citation and quotation marks omitted).
We note that, in the instant case, the parties have not called
our attention to, and we have not found, any authority which
establishes a common law right of inspection for members of
nonprofit corporations. However, assuming arguendo that the common
law right of inspection applies to North Carolina nonprofit
corporations, plaintiff's complaint does not effectively allege a
common law inspection claim because it neither sets forth any
proper purpose for the inspection plaintiff seeks to undertake norstates in boilerplate fashion that the inspection sought is, in
fact, for a proper purpose.
With respect to plaintiff's contention that his complaint
states a claim for relief under the Nonprofit Corporation Act,
N.C.G.S. § 55A-1-01, et seq., we conclude that plaintiff's
complaint states a claim for inspection of the minutes of meetings
of the members of the Humane Society of Beaufort County, but does
not state a claim for inspection of the minutes of the meetings of
the Board of Directors of the organization.
N.C.G.S. § 55A-16-04(a) (2003) provides:
If a corporation does not allow a member who
complies with G.S. 55A-16-02(a) to inspect and
copy any records required by that subsection
to be available for inspection, the superior
court in the county where the corporation's
principal office . . . is located may, upon
application of the member, summarily order
inspection and copying of the records demanded
at the corporation's expense.
A member complies with N.C.G.S. § 55A-16-02(a) if he seeks to
inspect any of the records of the corporation described in G.S.
55A-16-01(e) and if he gives the corporation written notice of
his demand at least five business days before the date on which
[he] wishes to inspect and copy. N.C.G.S. § 55A-16-01(e)(4)
includes [t]he minutes of . . . membership meetings[.]
N.C.G.S. § 55A-16-04(b) (2003) provides that
[i]f a corporation does not within a
reasonable time allow a member to inspect and
copy any other record, the member who complies
with G.S. 55A-16-02(b) and (c) may apply to
the superior court in the county where the
corporation's principal office . . . is
located for an order to permit inspection and
copying of the records demanded.
N.C.G.S. § 55A-16-02(b) applies where a member seeks to inspect
[e]xcerpts from any records required to be maintained under G.S.
55A-16-01(a), to the extent not subject to inspection under G.S.
55A-16-02(a)[.] The minutes of all meetings of [a corporation's]
. . . board of directors are required to be maintained by a
corporation under G.S. § 55A-16-01(a) and are not subject to
inspection under G.S. § 55A-16-02(a). A member complies with
N.C.G.S. § 55A-16-02(b) if he gives the corporation written notice
of his demand at least five business days before the date on which
[he] wishes to inspect and copy and meets the requirements of
subsection (c) of [G.S. § 55A-16-02.] N.C.G.S. § 55A-16-02(c)
provides that
[a] member may inspect and copy the records
identified in [G.S. § 55A-16-02] subsection
(b) . . . only if:
(1) The member's demand is made in good faith
and for a proper purpose;
(2) The member describes with reasonable
particularity the purpose and the records the
member desires to inspect; and
(3) The records are directly connected with
this purpose.
(emphasis added).
In the instant case, plaintiff's complaint alleges (1)
plaintiff is a member of the Humane Society; (2) plaintiff
requested in writing an opportunity to inspect the minutes of all
membership and board of directors meetings held in 2001 and 2002;
(3) plaintiff requested that defendants advise him of a time and
place where he could inspect the minutes of these meetings; and (4)defendants refused to comply with this request. We conclude that
these allegations are sufficient to state a claim for inspection of
the minutes of membership meetings under G.S. § 55A-16-04(a).
However, plaintiff's complaint neither describes with
reasonable particularity the purpose for the inspections sought,
nor alleges that the records sought to be inspected are directly
connected with such a purpose. Accordingly, plaintiff's complaint
does not state a claim for inspection of the minutes of board
meetings under G.S. § 55A-16-04(b).
Although plaintiff's complaint states only a claim for
inspection of the membership meeting minutes of the Humane Society,
the trial court erred in granting the defendant's motion to dismiss
pursuant to G.S. § 1A-1, Rule 12(b)(6). Therefore, the order
granting the dismissal must be reversed in part and this matter
remanded for consideration of plaintiff's claim for inspection
under G.S. § 55A-16-04(a).
________________________________
Finally, we address plaintiff's argument that the trial court
erred in dismissing his claim if it relied on failure to join a
necessary party as the basis for dismissal. We agree with this
contention.
Pursuant to N.C.G.S. § 1A-1, Rule 12(b)(7) (2003), a party may
assert as a defense to a claim that a complaint fails to join a
necessary party to the litigation. N.C.G.S. § 1A-1, Rule 19(a)
(2003) provides that those who are united in interest must be
joined as plaintiffs or defendants[.] Rule 19 requires that anecessary party be joined in the litigation; [a] 'necessary'
party is one whose presence is required for a complete
determination of the claim, and is one whose interest is such that
no decree can be rendered without affecting the party.
Godette v.
Godette, 146 N.C. App. 737, 739, 554 S.E.2d 8, 9 (2001) (citation
omitted). The absence of parties who are necessary parties under
Rule 19 of the Rules of Civil Procedure does not merit a
dismissal.
White v. Pate, 308 N.C. 759, 764, 304 S.E.2d 199, 202
(1983).
When the absence of a necessary party is
disclosed, the trial court should refuse to
deal with the merits of the action until the
necessary party is brought into the action.
Any such defect should be corrected by the
trial court
ex mero motu in the absence of a
proper motion by a competent person.
Id. at 764, 304 S.E.2d at 202-03.
Applying these principles to the present case, we conclude
that the trial court committed reversible error to the extent that
it dismissed plaintiff's claim for failure to join necessary
parties, without first seeking to have the necessary parties
joined.
Affirmed in part, reversed in part, and remanded.
Chief Judge MARTIN and Judge TIMMONS-GOODSON concur.
Report per Rule 30(e).
*** Converted from WordPerfect ***