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The Executive Board of Missouri Baptist Convention v. Missouri Baptist University

Court of Appeals of Missouri, Western District, Third Division

February 19, 2019

THE EXECUTIVE BOARD OF THE MISSOURI BAPTIST CONVENTION, A MISSOURI NON-PROFIT CORPORATION, ET AL., AS REPRESENTATIVES OF THE MISSOURI BAPTIST CONVENTION, AN UNINCORPORATED ASSOCIATION, Respondent,
v.
MISSOURI BAPTIST UNIVERSITY, Appellant; THE BAPTIST HOME, Appellant.

          Appeal from the Circuit Court of Cole County, Missouri The Honorable Karl A. W. DeMarce, Judge

          Before Anthony Rex Gabbert, Presiding Judge, Thomas N. Chapman, Judge, Alok Ahuja, Judge

          ANTHONY REX GABBERT, JUDGE

         Appellants Missouri Baptist University ("the University") and The Baptist Home ("the Home") appeal a circuit court's grant of summary judgment in favor of the Executive Board of the Missouri Baptist Convention, et al. ("the Convention") in a civil action seeking, inter alia, declaratory judgment. The University presents ten points on appeal, asserting that:

I. The trial court erred in granting summary judgment against the University because the Convention did not negate the University's breach of fiduciary duty affirmative defense in that the factual record shows that the parties were in a fiduciary relationship, and the Convention breached its fiduciary duties before the 2001 Charter amendment by its improper conduct;
II. The trial court erred in granting summary judgment against the University because the Convention did not negate the University's unclean hands affirmative defense in that the factual record indicated that before the 2001 Charter amendment, the Convention acted improperly, harmfully and not in good faith;
III. The trial court erred in granting the Convention's motion for partial summary judgment against the University because the Convention did not negate the University's affirmative defense that the parties were in a voluntary relationship;
IV. The trial court erred in granting summary judgment against the University and holding that the University's 1997 Charter did not establish a contractual or a third party beneficiary relationship with the Convention and that the University thereby could not raise "contract-based" affirmative defenses;
V. The trial court erred in granting the Convention's motion for partial summary judgment against the University because the Convention did not negate the University's affirmative defense that the Convention breached the implied covenant of good faith and fair dealing in that the factual record indicated the Convention acted in bad faith in the trustee nomination process, and it took actions that were not in the University's best interests;
VI. The trial court erred in granting the Convention's motion for partial summary judgment against the University because the Convention did not negate the University's failure of consideration affirmative defense;
VII. The trial court erred in granting the Convention's motion for partial summary judgment against the University because the Convention did not negate the University's affirmative defense that the Convention was the first to breach the University's 1997 Charter and that it consequently forfeited any enforcement rights it had, if any;
VIII. The trial court erred in entering judgment against the University because the Convention lacked standing to assert its Count IV claim pursuant to § 355.141, RSMo., because claims under § 355.141 can only be brought by the Missouri Attorney General or a member or trustee of the University, and the Convention is none of those persons, and that the Convention's claims that the University violated its charter violated § 355.606 as a challenges to the power of the University to act;
IX. The trial court erred in entering judgment against the University and declining to address numerous University defenses on the grounds that the court would entangle itself in ecclesiastic issues because the University's defenses did not involve ecclesiastic disputes, in that those defenses could be decided on neutral principles of law, did not require deciding or weighing religious or ministerial issues, and the defenses were based upon corporate governance documents, corporate procedural statutes, inequitable non-religious conduct and did not arise from religious disputes or religious principles;
X. The trial court erred in granting summary judgment and holding that the University's affirmative defenses in paragraphs 309, 312, and 323 were not adequately pled pursuant to Rule 55.08 because the University set forth a short and plain statement of facts supporting each defense.

         The Home raises three points on appeal, asserting the circuit erred:

I. In granting summary judgment in favor of Respondents because they do not have standing to pursue their claims because they are not authorized to do so by statute, they lack "special interest" standing to assert their claims, and lack any other basis under Missouri law to bring their claims;
II. In granting summary judgment in favor of Respondents because The Baptist Home's 1960 articles, which grant Respondent third-party approval privileges, were void ab initio, because they granted privileges prohibited by the governing law at that time, and they still failed to comply with the 1994 act revising the law;
III. In denying The Baptist Home's Motion to Amend, Correct or Modify the Final Judgment because the Judgment includes two relevant findings of fact which are plainly inaccurate and without support in the record.

         We affirm.

         BACKGROUND

         The Convention is an unincorporated association, whose members, individually known as "messengers," are selected by their respective Baptist churches. The messengers attend and vote at the Convention's annual meetings. Baptist churches are not members of the Convention and do not vote. The Executive Board of the Missouri Baptist Convention, which acts on the Convention's behalf, is a Missouri nonprofit corporation made up of elected officials and other messengers.[1]

         The University is a non-profit corporation originally incorporated in 1964 as "Missouri Baptist College." The University's original 1964 Articles of Incorporation gave the Convention various rights including the right to approve or reject any amendments to the University's articles and the right to appoint and remove members of the board of trustees. The University merged with another college in 1967, and the new articles preserved the aforementioned rights. The University next amended its articles in 1982, and it did so with the Convention's approval. It amended its articles once more in 1997, again with the Convention's approval. (The "1997 Articles.") Throughout all of these amendments, the Convention retained its rights to approve or reject amendments to the University's articles and appoint and remove trustees for the University's board.

         In regards to the Convention's approval rights over article amendments, the 1997 Articles state, in relevant part, that the University's "board of trustees may adopt one or more amendments to these articles of incorporation subject to the approval of the Missouri Baptist Convention upon recommendation of the Executive Board of the Missouri Baptist Convention." L.F. Doc. #197 at 4. In regards to the Convention's right to appoint and remove trustees, the 1997 Articles state that the University's "board of trustees shall consist of twenty-seven persons appointed by the Missouri Baptist Convention," of which, at "least seventy-five (75) percent of the trustees shall be members of [churches] affiliated with the Missouri Baptist Convention." Id. at 3-4. The trustees serve terms of three years, and "[n]o member who has served three successive terms, or parts thereof, shall be eligible for re-election until after the expiration of one year." Id. at 4.

         In 2001, the University filed amendments to their articles with the Missouri Secretary of State. (The "2001 Articles.") The 2001 Articles completely eliminated all rights enjoyed by the Convention under the 1997 Articles. Unlike with previous amendments, the University did not seek the Convention's approval for the 2001 Articles, and the Convention, during a meeting in 2001, expressly disapproved of the University's 2001 Articles. The Convention also demanded that the University restore the 1997 Articles including the Convention's rights set forth in the same.

         The Home is a Missouri non-profit corporation first created in 1959 and originally known as the "The Home for Aged Baptists." In 1960, The Home amended its Articles of Agreement which state, in relevant part, as follows:

ARTICLE VI. Powers
...
Section 2. The corporation shall also have the power to receive, to hold, to alienate, mortgage and convey real and personal property … PROVIDED, always that final approval of the Missouri Baptist Convention is obtained before any real property owned by the corporation on the Home site which is the site of the Home for Aged Baptists is encumbered in any manner or sold.
Section 3. If at any time said corporation, "The Home for Aged Baptists" shall cease to operate as such for the purposes and objects as set out herein all of the assets of the corporation shall be disposed of by the Trustees of corporation as directed by [the Convention] and shall be construed to be the property of the Missouri Baptist Convention. …
ARTICLE VII. Affiliation and Government
Section 1. This corporation shall be affiliated with and subject to the Missouri Baptist Convention. The members of the Board of Trustees of this corporation shall be nominated and elected by the Missouri Baptist Convention… Vacancies occurring on the Board of Trustees of this corporation shall be filled, for unexpired term of said Trustee, by the Executive Board of the Missouri Baptist Convention.
...
ARTICLE IX. Amendment ...

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