Roberts v. Madison County Realtors Ass'n, Inc.

• Decision Date: 06 September 1996
• Docket Number: No. 25A96,25A96
• Citation: 474 S.E.2d 783,344 N.C. 394
• Parties: Frank ROBERTS v. MADISON COUNTY REALTORS ASSOCIATION, INC., Jeanne T. Hoffman, Catherine Dickinson, and Diana Schommer.
• Court: North Carolina Supreme Court

Page 783

474 S.E.2d 783

344 N.C. 394

Frank ROBERTS v. MADISON COUNTY REALTORS ASSOCIATION, INC., Jeanne T Hoffman, Catherine Dickinson, and Diana Schommer.

No. 25A96.

Supreme Court of North Carolina.

Sept. 6, 1996.

Manning, Fulton & Skinner, P.A. by Cary E. Close, Raleigh, for plaintiff-appellant.

Moore & Van Allen, PLLC, by George V. Hanna III and Mary Elizabeth Erwin, Charlotte, for defendants-appellees.

ORR, Justice.

This case arises from a dispute concerning the validity of a merger of the Madison County Realtors Association, Inc., ("defendant Association") with the Asheville Board of Realtors. The facts occurred as follows.

Plaintiff, who had been a member of defendant Association for approximately ten years, was appointed to a special committee charged with the negotiation of the proposed merger of defendant Association with the Asheville Board of Realtors. Before the terms of the merger were finalized, defendant Diana Schommer, at a 30 March 1993 membership meeting, made a motion for members to vote on the proposed merger. Edward Krause, attorney for defendant Association, intervened, informing the membership that the statutory prerequisites to an official merger vote had not been satisfied, and therefore, a vote could not be taken at that time. Defendant Schommer then amended her motion to call for a tentative vote to show the "sense of the membership." This vote resulted in a count of six members in favor of and five members opposed to the terms of the proposed merger.

Thereafter, on 14 May 1993, defendant Jeanne Hoffman, defendant Association's president, and defendant Catherine Dickinson, defendant Association's secretary, submitted an application for the merger of defendant Association and the Asheville Board of Realtors, which would be voted on at a board meeting of the North Carolina Association of Realtors, Inc. ("North Carolina Association") on 4 June 1993. As a part of the application, defendants Hoffman and Dickinson were required to submit a copy of the minutes from the general membership meeting of defendant Association showing official approval of the proposed merger. The minutes of the 30 March 1993 membership meeting submitted by defendants Hoffman and Dickinson, however, reflected only the tentative vote, taken to show the "sense of the membership." Despite this defect in the application, the merger was approved by the board of directors of the North Carolina Association on 4 June 1993 and by the board of directors of the National Association of Realtors on 15 November 1993.

On 8 November 1993, the board of directors of defendant Association approved the "Plan of Merger" of defendant Association and the Asheville Board of Realtors. Defendant Association's board of directors' resolution approving the Plan of Merger directed that the Plan of Merger be submitted to a vote at a meeting of the members of defendant Association. Subsequently, defendant Hoffman called for an official vote of the membership on the merger. Twenty-five members of defendant Association were represented in person or by proxy at this 23 November 1993 meeting. Under N.C.G.S. § 55A-40, adoption of the proposed merger required an affirmative vote by two-thirds of the members represented in person or by proxy at the meeting. Thus, adoption required seventeen members to vote in favor of the Plan of Merger. Eighteen members voted in favor of the Plan of Merger; seven members voted against the Plan of Merger. Therefore, the Plan of Merger was adopted by defendant Association.

Plaintiff alleges that, contrary to the requirements delineated in N.C.G.S. §§ 55A-40(a)(1) and 55A-31, several members of defendant Association, including plaintiff himself, had not received a copy of the Plan of Merger or a summary of the Plan of Merger ten days in advance of the 23 November 1993 meeting. Additionally, plaintiff contends that, contrary to the bylaws of defendant Association, he was not allowed to convey to defendant Association's membership important information that he had recently obtained regarding the National Association of Realtors' new "Board of Choice" policy. This new policy allowed members of defendant Association to transfer their memberships from defendant Association to the Asheville Board of Realtors. Under the prior policy, a realtor was allowed to join only the realtors' association located in the county in which the realtor's business was located. According to plaintiff, this policy change had not been shared with members of defendant Association at any time during the discussions about the proposed merger, despite the fact that its implementation negated one of the primary reasons for considering a merger of defendant Association with the Asheville Board of Realtors.

On 28 December 1993, plaintiff filed a pro se complaint alleging that the actions taken by defendant Association and the individual defendants to accomplish the merger were not in compliance with the articles of incorporation and bylaws of defendant Association and that the merger was the result of a breach of fiduciary duty of defendant Association's board of directors. The complaint prayed for a temporary restraining order, a preliminary injunction and a permanent injunction to enjoin the proposed merger, as well as costs and such further relief as the court deemed just and proper. Plaintiff was granted an ex parte temporary restraining order on 29 December 1993, enjoining defendants from consummating the merger with the Asheville Board of Realtors. Defendants filed an answer and counterclaim on 25 February 1994. Plaintiff was granted a second ex parte temporary restraining order on 25 March 1994, enjoining the consummation of the merger.

On 8 April 1994, Judge Robert H. Lacey found that plaintiff had failed to show that there was a reasonable apprehension of irreparable loss, injury, or harm if injunctive relief was not granted. Therefore, Judge Lacey dissolved the temporary restraining order and denied plaintiff's motion for a preliminary injunction. On 29 April 1994, "Articles of Merger" of defendant Association with the Asheville Board of Realtors were filed with the Secretary of State.

On 31 May 1994, defendants filed a motion for summary judgment. On 8 June 1994, during the hearing on defendants' motion for summary judgment, Judge Claude D. Smith, Jr., orally granted a motion by plaintiff to amend the complaint to add the Asheville Board of Realtors as a defendant. In an order entered 15 July 1994, Judge Smith found that there was no genuine issue as to any material fact in dispute as to the issue of defendants' liability under the claims set forth in the complaint, and he granted summary judgment in favor of defendants. Plaintiff appealed to the Court of Appeals.

In a split decision, the Court of Appeals majority recognized that the affidavits filed by plaintiff tended to show "that there were questionable events which occurred during the merger." Roberts v. Madison Co. Realtors Ass'n, 121 N.C.App. 233, 239, 465 S.E.2d 328, 332 (1996). The Court of Appeals majority also acknowledged "defendants' rather transparent circumvention of procedural and statutory protections, set in place to guard against the very thing that has occurred." Id. However, the Court of Appeals majority held that because the merger had already occurred at the time of the summary judgment hearing, plaintiff's claim had become moot, and summary judgment in favor of defendants was proper. Judge Wynn dissented, arguing that plaintiff's claim was not moot and that since genuine issues of material fact existed, summary judgment should be reversed and the case remanded for trial.

"When an appeal is taken pursuant to N.C.G.S. § 7A-30(2), the scope of this Court's review is properly limited to the issue upon which the dissent in the Court of Appeals diverges from the opinion of the majority." State v. Hooper, 318 N.C. 680, 681-82, 351 S.E.2d 286, 287 (1987). Because no cross-assignment of error has been filed and because the Court of Appeals majority and dissent agreed that plaintiff raised issues of fact concerning the propriety of the procedures followed leading up to the merger, our review is limited to the issue dissented on: whether plaintiff's claim was rendered moot by the merger. We hold that the merger did not render plaintiff's claim moot.

A case is "moot" when a determination is sought on a matter which, when rendered, cannot have any practical effect on the existing controversy. Black's Law Dictionary 1008 (6th ed.1990). "[C]ourts will not entertain or proceed with a cause merely to determine abstract propositions of law." In re Peoples, 296 N.C. 109, 147, 250 S.E.2d 890, 912 (1978), cert. denied, 442 U.S. 929, 99 S.Ct. 2859, 61 L.Ed.2d 297 (1979). Thus, the case at bar is moot if the merger had the effect of leaving plaintiff with no available remedy. We note that the proper procedure for a court to take upon a determination that a case has become moot is dismissal of the action, rather than a grant of summary judgment. "If the issues before a court or administrative body become moot at any time during the course of the proceedings, the usual response should be to dismiss the action." Id. at 148, 250 S.E.2d at 912.

In turning to our consideration of the mootness issue, a general review of the law of injunctive relief is necessary.

Injunctions may be granted to prevent violation of rights or to restore the plaintiff to rights that have already been violated.... No general principle limits injunctive relief to any particular kind of case or constellation of facts.

Injunctions are denied in particular cases when the plaintiff fails to establish any underlying right. They are also denied in individual cases when the judge concludes that some other remedy ought to be used instead. Otherwise, the injunction is a potential remedy in any case in which it may provide significant benefits that are greater than its costs or disadvantages....