by Brenda Grantland, 1/22/2018
This is Part IV of a series of blog posts about a local nonprofit I am a member of – Tamalpais Valley Improvement Club. (http://truthandjusticeblog.com/tvic-4)
I got an email today from Ingrid Mittermaier, the lawyer the TVIC board hired (apparently with the club’s money) to “deal with” my requests for information.
Stunningly, Ingrid admits that the people purporting to be on the TVIC board of directors have exceeded their term limits and that they had not been holding annual elections of board members. In my previous email I had asked her:
- When did each of the 4 board members begin their current terms? And what prior terms have they served in the past 20 years? I’m concerned because I know 3 of you were on the board when I was in 2001-2002.
- How many member meetings have been held since 2015? By “member meetings” I mean meetings where members were invited for a reason, such as a program or to solicit member input on an issue, not just board meetings that some members or nonmembers happen to sit in on. I want to see the agendas and minutes for those meetings.
- I want to see the agendas and minutes for the annual meetings of members from 2015 to present, as well as the ballots from those elections, or whatever record you are required to keep tallying the votes for directors.
Here is her response:
IM: I agree with you that TVIC did not follow the Bylaws requirements to hold annual member meetings, and got behind on director elections. Also, I agree that it appears that the corporation did not comply with the requirements regarding director term limits. I have advised them, and the member letter addresses the fact, that TVIC needs to have an annual meeting and director elections. As you know, the Bylaws anticipate a somewhat lengthy nomination process leading up to Board elections, 30 day notice of candidates, etc., so it seemed to make the most sense to follow the Bylaws precisely and really get it right this time, versus rushing a quick member vote on new directors. There is a very important provision in the Corporations Code that permits the Board to continue to operate and take actions, even in this type of situation where TVIC is behind on member meetings and director elections. Section 5220(b) provides that “Unless the articles or bylaws otherwise provide, each director [. . .] shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified, unless the director has been removed from office.” [Emphasis added]. The intent of the last phrase is to ensure that there is a hold over board in place that can take action, even if a corporation misses deadlines for director elections, or otherwise directors are exceeding their terms or term limits. The only time this is not the case is if the members actually had voted to remove certain directors.
The Corporations Code has also anticipated a remedy for members if a nonprofit corporation does not hold member meetings as required by the Bylaws. In Corp Code Section 5510(c), it permits a member to go to the superior court and ask the superior court to order the meeting to be held. This remedy of course assumes that the Board of a corporation refuses to hold the meeting. The remedy is not that actions of the Board are invalid because of the lack of member meetings or director elections. So, I completely agree that TVIC does now need to get itself organized and conduct a long overdue annual meeting of the members, and the Board agrees as well. But I disagree that the actions of the current Board are invalid.
I also told Ingrid in my prior email that we needed a member meeting before the vote, where members can ask questions and get answers before voting.
IM: Brenda, I understand you feel this is necessary. It is however not the law. The law permits member actions to be taken by a written ballot, pursuant to Corp Code Section 5513, without a full member meeting. It also explicitly permits the members to approve a transfer of assets after the transaction occurred (see Corp Code Section 5911(a)(2)). While this is obviously not ideal, it is in fact permitted, and the best we can do at this point. I know you disagree with the Board and think they are on the wrong track. I think there is a difference in opinion. The Board members I have talked with feel they are very much representing the best interests of the corporation and the members and did the right thing to protect the use of the TVCC by TVIC members. They saw the District as an established entity with the history, resources and incentive to continue with the facility maintenance, and they negotiated extensive provisions ensuring that the District make the TVCC available to TVIC and its members.
So you see she is basically saying yes they were completely violating the law by not holding elections, and probably could not legally qualify for running for re-election, but they could hang onto power and give away the club’s assets and hire a lawyer with the remaining funds to fight us on behalf of the board.
If you are a TVIC member PLEASE join with me in demanding a meeting of the members before the deadline for voting.