Greenwood Bible Deliverance Church, Inc. v. Ard
| Decision Date | 21 October 2016 |
| Docket Number | 2150732 |
| Parties | GREENWOOD BIBLE DELIVERANCE CHURCH, INC. v. Betty ARD and Irene Sonier |
| Court | Alabama Court of Civil Appeals |
James G. Curenton, Jr., Fairhope, for appellant.
D. Robert Stankoski, Jr., of Stankoski Myrick, LLC, Fairhope, for appellees.
Greenwood Bible Deliverance Church, Inc., appeals from a summary judgment entered by the Baldwin Circuit Court in favor of Betty Ard and Irene Sonier. We reverse the trial court's judgment and remand for further proceedings.
At some point before the mid-1950s, an unincorporated church group began worshipping under the name "Greenwood Bible Deliverance Church." In November 1962, members of the church group filed a certificate of incorporation in the Baldwin Probate Court, forming a corporation identified as "Greenwood Bible Deliverance Church, Inc." ("the 1962 corporation"), and naming three corporate trustees. It is not entirely clear when, but at some point around the time the 1962 corporation was formed, real property was donated and purchased for the church group's use.1
In 1994, 32 years after formation of the 1962 corporation, a document titled "Restated Articles of Incorporation of Greenwood Bible Deliverance Church, Inc.," was filed in the Baldwin Probate Court ("the restated articles"). The restated articles identified the long-time pastor of the church group, Marie Harms, as "incorporator." After the restated articles had been filed, the Alabama Secretary of State's Office began maintaining two sets of corporate records for entities identified as "Greenwood Bible Deliverance Church, Inc." It has been argued by all parties in this matter that the restated articles filed in 1994 created a new and distinct corporate entity ("the 1994 corporation").2
In May 2012, Ard and Sonier filed a complaint naming the 1962 corporation as the sole defendant and alleging that Ard and Sonier were members of the 1962 corporation. Ard and Sonier asserted in their complaint that the restated articles had been an ineffective attempt to amend the certificate of incorporation of the 1962 corporation because, Ard and Sonier asserted, statutory voting prerequisites to such an amendment had not been satisfied. Ard and Sonier also claimed that bylaws purportedly adopted in 1994 along with the restated articles were of no effect. Thus, Ard and Sonier alleged, there was a dispute regarding "the proper documents which govern the church's temporal affairs." Ard and Sonier requested a judgment declaring that the restated articles and the bylaws were "void" and directing the 1962 corporation to elect new trustees.
In June 2012, a motion to dismiss was filed on behalf of "Greenwood Bible Deliverance Church, Inc." Although it is not entirely clear, it appears that defense counsel filing that motion purported to represent the 1962 corporation, as opposed to the 1994 corporation.
Defense counsel asserted in the motion to dismiss that the 1962 corporation had been created for the sole purpose of holding title to the church building and the real property upon which it sits and that the members of the church group had remained an unincorporated association after the formation of the 1962 corporation. In support of that position, defense counsel pointed out that the 1962 corporation had been created pursuant to Title 10, Article 3, § 124 et seq., of the Alabama Code of 1940 (Recomp. 1958); § 126 of Article 3 had provided, in part:
"Corporations not of a business character created under this article, or created by special act of the legislature heretofore, may acquire, hold, administer, distribute or dispose of real and personal property , and may take, receive, and acquire property by gift, devise, or bequest, and hold, own, administer, use, distribute and dispose of such property for the advancement, promotion, extension, or maintenance of such causes and objects as may be prescribed by the constitution and by-laws of such corporation, in conformity with all lawful conditions imposed by the donor, and may exercise such other powers as are incident to private corporations."
(Emphasis added.) Relying on cases such as Blount v. Sixteenth St. Baptist Church , 206 Ala. 423, 426, 90 So. 602, 604 (1921), defense counsel asserted that the creation of the 1962 corporation "did not surrender any power of the congregation to the entity, except the right ‘to hold its property, convey or [e]ncumber the same pursuant to the due authorization of its membership.’ "
Defense counsel also argued that the restated articles had not been intended to amend the certificate of incorporation of the 1962 corporation but, rather, had created the allegedly separate and distinct 1994 corporation. According to the motion to dismiss, the 1994 corporation is made up of the members of the church group, who, the motion alleged, had been members of an unincorporated association until the formation of the 1994 corporation.3
The motion to dismiss asserted further that, upon formation of the 1994 corporation, ownership of the property that had been held by the 1962 corporation, allegedly in trust for the members of the church group, had automatically vested in the 1994 corporation. Thus, defense counsel asserted, the 1962 corporation no longer had a "legal purpose."
Ard and Sonier filed a response to the motion to dismiss, in which they reasserted their original theory, namely, that the restated articles had been an ineffective attempt to amend the certificate of incorporation of the 1962 corporation and were, therefore, void. In the alternative, Ard and Sonier asserted that, if the restated articles had formed a new corporation, then the 1962 corporation nevertheless still existed, still owned church property, and should be allowed to elect new trustees. In their response to the motion to dismiss, Ard and Sonier described the dispute as one over the intent of the restated articles and bylaws, over the existence of the 1962 corporation, and over ownership of church property.
In response to the argument that the 1962 corporation had been formed solely for the purpose of holding title to real property and had not resulted in the incorporation of the members of the church group, Ard and Sonier pointed to Title 10, Article 3, § 125 of the Alabama Code of 1940 (Recomp. 1958), which had provided:
(Emphasis added.) Thus, Ard and Sonier asserted in their response to the motion to dismiss that the members of the church group had not been an unincorporated association in 1994 when the restated articles were filed and that the property held by the 1962 corporation had not vested in the 1994 corporation upon its creation.4
The trial court promptly denied the motion to dismiss. Approximately one year later, in October 2013, Ard and Sonier filed a motion for a summary judgment. In that motion, Ard and Sonier again asserted the alternative theories they had argued in response to the motion to dismiss, and they requested the trial court to enter a judgment declaring that the restated articles and bylaws were void, that the 1962 corporation owned the real property on which the church building sits, and that the 1994 corporation had no interest in that property. Ard and Sonier also asked the trial court to direct the 1962 corporation to elect new trustees.
In November 2013, before the trial court had ruled on the summary-judgment motion, Ard and Sonier filed a motion for leave to amend their complaint, along with a proposed amended complaint.5 The proposed amended complaint specifically named the 1994 corporation as a defendant and specifically asserted the theory that, if the restated articles had formed a new corporation, the 1962 corporation nevertheless still owned the property in question. The proposed amended complaint described the dispute as one over "ownership of the real property on which the [church building] sits" and the "identity of the person or persons with the authority to govern the 1962 corporation." The proposed amended complaint requested essentially the same relief that had been requested in Ard and Sonier's summary-judgment motion, i.e., a declaration that the restated articles and bylaws were void, a declaration that the 1962 corporation owns the real property on which the church building sits, a declaration that the 1994 corporation has no interest in that property, and a mandate to the 1962 corporation to elect new trustees.
Counsel purporting to represent "Defendant, Greenwood Bible Deliverance Church, Inc.," filed an objection to Ard and Sonier's motion for leave to amend their complaint, asserting that the proposed amendment "substantially changes the substance of the facts alleged and the relief requested" and "would require additional discovery not contemplated up until this time, causing actual prejudice and delay." Defense counsel also filed a response to Ard and Sonier's motion for a summary judgment, in which counsel addressed the merits of both theories asserted in that motion. In February 2014, the trial court entered an order granting Ard and Sonier's motion for leave to amend their complaint.
Approximately one month later, the trial court entered an order granting Ard and Sonier's motion for a summary judgment. The trial court stated in its order that the 1962 corporation "was properly incorporated and properly received fee simple title to all of the real property on which...
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