Clark v. Ryan Park Prop. & Homeowners Ass'n

• Decision Date: 30 December 2014
• Docket Number: No. S–14–0170.,S–14–0170.
• Citation: 2014 WY 169,340 P.3d 288
• Parties: Fern CLARK and Travis Clark, Appellants (Petitioners), v. The RYAN PARK PROPERTY AND HOMEOWNERS ASSOCIATION, Appellee (Respondent).
• Court: Wyoming Supreme Court

340 P.3d 288

2014 WY 169

Fern CLARK and Travis Clark, Appellants (Petitioners)

v.The RYAN PARK PROPERTY AND HOMEOWNERS ASSOCIATION, Appellee (Respondent).

No. S–14–0170.

Supreme Court of Wyoming.

Dec. 30, 2014.

Representing Appellants: Holli Austin–Belaski, Corthell and King, P.C., Laramie, Wyoming.

Representing Appellee: Douglas W. Bailey, Bailey, Stock and Harmon, P.C., Cheyenne, Wyoming.

Before BURKE, C.J., and HILL, KITE, DAVIS, and FOX, JJ.

Opinion

BURKE, Chief Justice.

[¶ 1] Appellants, Fern and Travis Clark, brought an action against the Ryan Park Property and Homeowners Association seeking an order, pursuant to the Wyoming Nonprofit Corporation Act, requiring the Association to allow the Clarks to inspect and copy certain corporate records. The district court entered the order, but denied the Clarks' request to recover costs and attorney's fees. On appeal, the Clarks contend that the denial of attorney's fees and costs is contrary to the provisions of the Act. We will affirm.

ISSUE

[¶ 2] The Clarks present this issue, which we reword slightly for the sake of clarification:

Whether the district court erred by failing to adhere to the mandatory language of Wyo. Stat. Ann. § 17–19–1604 (LexisNexis 2011), when it ordered the Association to allow the Clarks to copy and inspect documents but denied the Clarks' request for attorney's fees and costs.

FACTS

[¶ 3] The Clarks, property owners in Ryan Park, Wyoming, and members of the Association, commenced an action in district court claiming that the Association had unlawfully denied their repeated requests to inspect and copy certain Association records. The Clarks claimed that the Association was required by statute to keep and maintain these documents, that the Clarks had a statutory right to inspect and copy them, and that the Clarks were entitled under the statutes to recover the costs and attorney's fees they had incurred in bringing the action. The Clarks moved for an order allowing them to inspect and copy the documents, and also sought an award of costs and attorney's fees.

[¶ 4] At the beginning of the hearing on the Clarks' motion, counsel for the Association told the district court that the Association had “no problem” with the court entering an order requiring it to produce the records because the Association had already complied with the Clarks' request for documents. Counsel for the Clarks indicated that the Clarks still wanted the district court to enter the order because they asserted they had not received all of the documents they had requested. They also maintained that they were entitled to recover costs and attorney's fees. The district court proceeded with the hearing.

[¶ 5] Soon after the hearing, the district court entered its order granting the Clarks' motion. The district court noted that the Association had stipulated to the entry of the order, and stated that the court concurred with that stipulation. Accordingly, it ordered that, “[a]s the parties have agreed, and as has already been done, the [Association] shall make available for copying and inspection those records requested by the Clarks that are in existence and in its possession or in the possession of its agents and which can be reasonably obtained.” The district court declined to order the Association to pay the Clarks' attorney's fees or costs. The Clarks appealed that part of the district court's decision.

STANDARD OF REVIEW

[¶ 6] “Following a bench trial, we review the trial court's findings of fact for clear error, and its conclusions of law de novo. ” Fox v. Wheeler Elec., Inc., 2007 WY 171, ¶ 9, 169 P.3d 875, 878 (Wyo.2007) (citing Pinther v. Ditzel, 2007 WY 116, ¶ 3, 163 P.3d 816, 816 (Wyo.2007) ).

[W]e assume that the evidence of the prevailing party below is true and give that party every reasonable inference that can fairly and reasonably be drawn from it. We do not substitute ourselves for the trial court as a finder of facts; instead, we defer to those findings unless they are unsupported by the record or erroneous as a matter of law.

Belden v. Thorkildsen, 2007 WY 68, ¶ 11, 156 P.3d 320, 323 (Wyo.2007) (quoting Harber v. Jensen,

2004 WY 104, ¶ 7, 97 P.3d 57, 60 (Wyo.2004) ). “A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Id.

DISCUSSION

[¶ 7] Wyo. Stat. Ann. § 17–19–1601, part of the Wyoming Nonprofit Corporation Act, requires nonprofit corporations to retain specified documents, including meeting minutes, accounting information, and membership lists. Wyo. Stat. Ann. §§ 17–19–1602 and –1603 provide, with certain conditions, that a member of a nonprofit corporation is entitled to inspect and copy those records. Wyo. Stat. Ann. § 17–19–1604, the statute directly at issue in this case, provides a judicial remedy when a nonprofit corporation does not allow a member to inspect and copy such records:

§ 17–19–1604. Court–ordered inspection.

(a) If a corporation does not allow a member who complies with W.S. 17–19–1602(a) to inspect and copy any records required by that subsection to be available for inspection, the district court in the county where the corporations' [sic] principal office, or, if none in this state, its registered office, is located may summarily order inspection and copying of the records demanded at the corporation's expense upon application of the member.

(b) If a corporation does not within a reasonable time allow a member to inspect and copy any other record, the member who complies with W.S. 17–19–1602(b) and (c) may apply to the district court in the county where the corporation's principal office, or, if none in this state, its registered office, is located for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.

(c) If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the member's costs, including reasonable counsel fees, incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the member to inspect the records demanded.

(d) If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding member.

(Emphasis added.)

[¶ 8] In its order, the district court quoted subsection (c) of this statute, with the same added emphasis as in the quotation above. It restated that this statute “requires the award of costs and fees ... unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the member to inspect the records demanded.” It then set forth these findings and conclusions:

7. At the April 23, 2014 hearing on this matter, this Court heard evidence regarding the Clarks' requests to obtain certain documents from the [Association], and the [Association's] attempts to satisfy those requests. At the conclusion of the presentation of evidence, it was apparent to this Court that: (a) the [Association] has made reasonable efforts to meet the demands imposed upon it by the Clarks and (b) the [Association] had a reasonable basis for its doubt of the Clark[s'] right to inspect certain documents, namely its concerns about the privacy interests of other individual members.

8. In this Court's experience, the [Association] has kept as good a set of records as most nonprofit, volunteer organizations and has done its best to respond to the Clarks' request, considering the fact that some of those records were in the possession of other individuals or entities and considering the [Association's] concerns about protecting its members['] privacy interests. In any event, this Court cannot conclude that the [Association] has acted in bad faith or that attorney's fees and costs are warranted.

[¶ 9] The Clarks first contend that the district court's factual finding that the Association had made reasonable efforts to satisfy their requests is clearly erroneous. They claim that the Association “took nearly eight months to disclose, on a piecemeal basis, only partial responses” to their requests. The evidence, they contend, shows that they did not receive certain bank records until after the lawsuit had commenced.

[¶ 10] At the hearing, the president of the Association, Donald Brinkman, testified that the Association did not have the requested bank statements, so he asked the Association's bank to provide copies. The statements produced by the bank did not include copies of...