Exec. Bd. of the Mo. Baptist Convention v. Windermere Baptist Conference Ctr., Inc.

• Decision Date: 27 May 2014
• Docket Number: SD 32735.,Nos. SD 32699,s. SD 32699
• Citation: 430 S.W.3d 274
• Parties: The EXECUTIVE BOARD OF the MISSOURI BAPTIST CONVENTION, Plaintiff/Appellant, v. WINDERMERE BAPTIST CONFERENCE CENTER, INC., James L. Hill, Reliance Trust Company, National City Bank of the Midwest, Consolidated Mortgage, Inc., and First American Title Missouri Agency, Inc., Defendants/Respondents.
• Court: Missouri Court of Appeals

430 S.W.3d 274

The EXECUTIVE BOARD OF the MISSOURI BAPTIST CONVENTION, Plaintiff/Appellant,

v.WINDERMERE BAPTIST CONFERENCE CENTER, INC., James L. Hill, Reliance Trust Company, National City Bank of the Midwest, Consolidated Mortgage, Inc., and First American Title Missouri Agency, Inc., Defendants/Respondents. ¹

Nos. SD 32699, SD 32735.

Missouri Court of Appeals,

Southern District,

Division One.

March 25, 2014.

Application for Transfer to Supreme Court Denied date April 17, 2014.

Application for Transfer Denied May 27, 2014.

Michael K. Whitehead, Kansas City, MO, and Michael W. Blanton, Evergreen, CO, for Appellant.

Jim J. Shoemake, St. Louis, MO and Eric M. Walter, St. Louis, MO, for Respondent Windermere.

Jeffrey O. Parshall and Michael P. Robertson, Columbia, MO, for Respondent Hill.

James W. Gallaher and Jason L. Call, Jefferson City, MO, for Respondent Reliance.

Clay Britton, Matthew R. Hubbard and Michael S. Lee, Kansas City, MO, for Respondents National City Bank, Consolidated Mortgage and First American Title.

WILLIAM W. FRANCIS, JR., C.J.

This is an appeal by The Executive Board of the Missouri Baptist Convention (“The Executive Board”), from the trial court's entry of judgments against The Executive Board in favor of Respondents Windermere Baptist Conference Center, Inc. (“WBCC”), James L. Hill (“Hill”); Reliance Trust Company (“RTC”); and National City Bank of the Midwest, Consolidated Mortgage, Inc., and First American Title Missouri Agency, Inc., (collectively the “NCB defendants”). We affirm the judgments of the trial court.

Overview

An overview of this case is necessary and an exercise in complexity due to the long history of this dispute. The history and record of this case is that this is now the fourth time this matter has been presented in some way to an appellate court. In addition, the current matter before this Court includes The Executive Board's brief containing 18 points and more than 4,000 pages of legal file, including numerous motions for summary judgment. The nature of the issues, the multiple parties, and the wrangling among the parties, made it difficult for this Court to engage in all issues asserted. The “disingenuous” position of The Executive Board, along with their “convoluted and fastidious” distinctions, have made this appeal even more challenging, not to mention the burdens placed upon the trial court. The Executive Bd. of the Missouri Baptist Convention v. Windermere Baptist Conference Center, 280 S.W.3d 678, 687, 689 (Mo.App. W.D.2009).

In order to fully explain our decision, it is necessary to address the Byzantine journey this case has made through our courts. The three previous opinions are: The Executive Bd. of Missouri Baptist Convention v. Carnahan, 170 S.W.3d 437 (Mo.App. W.D.2005) (Windermere I ); The Executive Bd. v. Windermere, 280 S.W.3d at 678 (Windermere II ), and Atkins v. Jester, 309 S.W.3d 418 (Mo.App. S.D.2010) (Windermere III ). We borrow freely from the facts and opinions contained in Windermere I, II and III, only for purposes of this overview and to establish clear context, without further attribution. Windermere I and II were lawsuits filed in Cole County by The Executive Board in which the Western District ultimately affirmed the circuit court's dismissal of claims and a grant of summary judgment in favor of WBCC. The case out of which this appeal arises was filed in Camden County prior to the Western District's opinion in Windermere II. In Windermere III, this Court dismissed that appeal because the judgment was not final. 309 S.W.3d at 422. The matter was remanded, and after the trial court below granted motions for summary judgment in favor of Respondents, this matter is now before this Court once again.

Facts and Procedural History

In light of the extensive nature of this case, and because this case is the culmination of two separate lawsuits, an exhaustive explanation of the factual and procedural history is necessary in understanding the claims now before this Court, and our ultimate holding, in order to clearly understand the context of this case. In reviewing the facts, we have utilized the statements of uncontroverted facts in the record, as well as Windermere I, II and III.

The Executive Board is a Missouri non-profit corporation which purports to act on behalf of the Missouri Baptist Convention (“MBC”),² an unincorporated association of representatives (known as “messengers”) from affiliated Southern Baptist churches in the state of Missouri. Prior to 2001, The Executive Board was the titled owner of a conference and recreational facility located on 1,300 acres (“the Property”), which was known as the “Windermere Baptist Conference Center,” and located in Camden County. “[The Property] was titled in the name of [T]he Executive Board of [MBC].” Windermere II, 280 S.W.3d at 684. This Property, and its ownership, is the heart of this lawsuit. The record reflects The Executive Board is attempting to reclaim the Property, and has been trying to do so since Windermere I.

In 1999, MBC and The Executive Board planned to organize some of its ministries and assets into “subsidiary non-profit corporations.” The Executive Board asserted the intent was for oversight and direction of the subsidiary non-profit corporations to remain with The Executive Board and MBC. The plan to organize the ministries and assets was titled the “New Directions Plan.” The Property was part of the New Directions Plan.

At its October 1999 annual meeting, the recommendations in the New Directions Plan were adopted, and MBC messengers voted to authorize the creation of a new Missouri non-profit corporation, WBCC, “to take over the assets and operations of [the Property].” Windermere II, 280 S.W.3d at 684. On July 11, 2000, The Executive Board authorized Hill, the then-Executive Director of The Executive Board,³ to proceed with the necessary steps to implement the incorporation of WBCC and the Property, including working with The Executive Board's legal counsel, Mark Comley (“Comley”). Thereafter, Hill worked with Comley to prepare and file the articles of incorporation to create WBCC, a Missouri non-profit corporation. “The stated purpose for [WBCC] was to establish and maintain conference and recreational facilities to facilitate Christian renewal and commitment.” Windermere III, 309 S.W.3d at 421.

In drafting the articles of incorporation for WBCC, Comley advised Hill that a clause requiring MBC approval of charter amendments (referred to as an “approval clause”) in the WBCC articles of incorporation was not mandatory for purposes of incorporation.⁴ Comley advised Hill by letter that Missouri law did not require an approval clause, stating: “Article 12 [ (approval clause) ] is not a mandatory article for purposes of incorporating the Conference Center. It is strictly optional.” ⁵ The WBCC articles of incorporation were filed by Comley on August 25, 2000. The WBCC articles did contain a provision requiring MBC election of certain trustees; however, it did not contain an approval clause requiring MBC approval of WBCC charter amendments.

At MBC's annual meeting on October 31, 2000, The Executive Board presented its “Recommendation No. 3” (the “Recommendation”) for MBC to ratify WBCC's August 25, 2000 articles of incorporation, which did not contain an approval clause, and authorize the transfer of assets and liabilities from The Executive Board to WBCC, effective January 1, 2001.

The official record of the October 31, 2000 annual meeting indicates 3,074 messengers were in attendance when MBC voted on the Recommendation. The WBCC articles of incorporation were printed in the October 31, 2000 “ Tuesday Bulletin [sic]” ⁶ for the “MBC Annual Meeting,” and messengers were provided an opportunity to express their opinions about the Recommendation. See Windermere II, 280 S.W.3d at 685. At the meeting, the messengers discussed concerns that if the WBCC articles of incorporation were ratified, the WBCC board might be able to “break away” from MBC like another affiliated agency had done the previous month. There is no record of Hill making any representations to MBC regarding the Recommendation. Thereafter, MBC messengers voted in favor of the Recommendation, ratifying WBCC's articles of incorporation and authorizing the transfer of the Property and the liabilities to WBCC.⁷

MBC messengers also voted to select WBCC's six initial trustees. The WBCC articles of incorporation provided for nine trustees, and that three of the trustees “shall be permanent members by virtue of office.” The three ex officio trustees were to be the MBC Executive Director—then Hill; the MBC president—then Robert D. Collins (“Collins”); and the “Chairman of the Windermere Board of Advisors.”

On November 16, 2000, MBC, through The Executive Board, filed an application with the Internal Revenue Service for IRC 501(c)(3) exempt status for WBCC. In the letter attached to the application for exempt status, it was noted that WBCC “ ‘functions as a separate corporationwith a separate governing body and is not managed or controlled by [MBC].’ ” Windermere II, 280 S.W.3d at 685. Between December 2000 and April 2001, The Executive Board conveyed the Property to WBCC by deed, in compliance with MBC's approval of the Recommendation.

Then, on July 30, 2001, the WBCC board of trustees adopted amended articles of incorporation, without seeking the permission or approval of MBC or The Executive Board before amending the articles of incorporation. The amended articles no longer granted MBC the privilege of nominating and selecting WBCC's trustees, and in the event of dissolution, no longer required the distribution of corporate assets to MBC's affiliated organizations. With the amendment to the articles, WBCC became a self-perpetuating entity.

Hill abstained from the WBCC vote to adopt the amended articles of incorporation. In August 2001, The Executive Board knew that Hill supported WBCC's decision to amend its...