O'Bryant v. Veterans of Foreign Wars, No. 1552

• Decision Date: 31 May 1978
• Docket Number: No. 2-476A131,2-476A131
• Citation: 176 Ind.App. 509,376 N.E.2d 521
• Parties: Nicky G. O'BRYANT, Appellant, v. VETERANS OF FOREIGN WARS, NO. 1552, Appellee.
• Court: Indiana Appellate Court

Page 521

376 N.E.2d 521

176 Ind.App. 509

Nicky G. O'BRYANT, Appellant, v. VETERANS OF FOREIGN WARS, NO. 1552, Appellee.

No. 2-476A131.

Court of Appeals of Indiana,Second District.

May 31, 1978.

William J. Norton, Anderson, for appellant.

Marion W. Withers, Jones, Withers & Adair, Anderson, for appellee.

WHITE, Judge.

Nicky G. O'Bryant (O'Bryant), a member of Veterans of Foreign Wars, No. 1552 (VFW), brought suit against VFW, an unincorporated association, seeking damages for bodily injuries allegedly caused by VFW's negligence. VFW moved for summary judgment on the theory that under no circumstances can one of its members recover in such an action because all members are engaged in a joint enterprise and the negligence of each is imputed to every other member. The court granted the motion and rendered judgment dismissing the complaint.

We reverse.

The abridged record filed with this court is an agreed statement authorized by Appellate Rule 7.3, supplemented by selected papers, not including the complaint. This record makes no apparent attempt to disclose what O'Bryant contends is the negligent conduct which he claims is the proximate cause of his injury. It obviously attempts to present only the abstract question of whether a member of an unincorporated association can maintain an action against the association for bodily injuries allegedly the proximate result of the negligence of a person or persons engaged in some activity on behalf of the association under circumstances which would make the association liable were the plaintiff not a member of the association. We shall answer the question without pausing to consider whether it is properly presented.

The judgment entry discloses that the court below relied on "the general case law as cited in 6 Am.Jur.2d (Associations and Clubs) (s) 31 (p. 458) that the general rule is that members of an unincorporated association may not recover from the association for tort." The judge nevertheless believed that association members should be permitted to maintain such actions but felt bound to follow the general rule because the only "clear case" stating his view is White v. Cox (1971), 17 Cal.App.3d 824, 95 Cal.Rptr. 259, 45 A.L.R.3d 1161. However, as will later appear, there are other cases which reach the result the trial court would have preferred. We too prefer that result and, because we believe it not compatible with Indiana statutory case law, we hold that summary judgment for defendant should not have been granted.

The rationale of the rule followed by the trial court has been variously stated, but may be summarized as follows:

An unincorporated association, like a business partnership, has no legal entity or existence apart from its members, e. g., it cannot sue or be sued in its own name, but only in the names of its partners or members; its members are engaged in a joint enterprise, or venture, in which each member exercises (or has the legal right to exercise) control over the operations of the association, thus each member, as to each other member, is both principal and agent in matters involving the association's activities. Annot. (1950), 14 A.L.R.2d 473; Associations and Clubs, § 31, 6 Am.Jur.2d 458 (1963) and 1977 Supp. at p. 38.

In Marshall v. International Longshoremen's & Warehousemen's Union (1962), 57 Cal.2d 781, 22 Cal.Rptr. 211, 371 P.2d 987, the rationale of this rule of non-liability is further explained:

"Basically this rule has been arrived at by applying to other forms of voluntary, unincorporated associations the rules of law developed in the field of business partnerships. Under traditional legal concepts the partnership is regarded as an aggregate of individuals with each partner acting as agent for all other partners in the transaction of partnership business, and the agents of the partnership acting as agents for all of the partners. When these concepts are transferred bodily to other forms of voluntary associations such as fraternal organizations, clubs and labor unions, which act normally through elected officers and in which the individual members have little or no authority in the day-to-day operations of the association's affairs, reality is apt to be sacrificed to theoretical formalism." (22 Cal.Rptr. at 213, 371 P.2d at 989.)

Marshall was a suit by a member against his labor union. The California Supreme Court held:

"The concepts herein discussed, which are proper enough when applied to business partnerships for which they were originally developed, should not be so pressed with disregard of consequences to the very different field of the relationship between labor unions and their members. It is our conclusion that a member of a labor union is entitled to sue the union for acts which he neither participated in nor authorized, and that any judgment that he may recover against the union can be satisfied from the funds and property of the union alone." (22 Cal.Rptr. at 215, 371 P.2d at 991.)

The Marshall holding was limited to labor unions. Nine years later, however, in White v. Cox (1971), 17 Cal.App.3d 824, 95 Cal.Rptr. 259, 45 A.L.R.3d 1161 ¹, an action by a member of an unincorporated association of condominium owners against the association for damages for personal injuries allegedly sustained as a proximate result of the association's negligence, the Court of Appeals noted that "(s)ince Marshall in 1962 the rule of non-liability of an unincorporated association to its members has suffered further erosion from both statutory and case law." (95 Cal.Rptr. at 260, 45 A.L.R.3d at 1164.) After citing the eroding statutes and cases it said, "(i)n view of these developments over the past decade we conclude that unincorporated associations are now entitled to general recognition as separate legal entities and that as a consequence a member of an unincorporated association may maintain a tort action against his association." (95 Cal.Rptr. at 261, 45 A.L.R.3d at 1165.) Among the developments listed by the court were amendments to the California Corporation Code making partnerships and unincorporated associations liable to third parties to the same extent as if the association were a natural person. ² Indiana's Trial Rules 17(B) and 17(E)...