Judge rules for Windermere; Missouri convention to appeal

Posted: 3/14/08

Judge rules for Windermere;
Missouri convention to appeal

By Vicki Brown

Associated Baptist Press

JEFFERSON CITY, Mo. (ABP)—Windermere Baptist Conference Center acted legally when it changed its articles of incorporation, a circuit judge ruled. But Missouri Baptist Convention officials immediately announced they plan to appeal the decision.

The ruling by Cole County (Mo.) Circuit Judge Richard Callahan was the latest action in a lawsuit the Missouri Baptist Convention filed against five formerly related entities—Windermere, the Baptist Home retirement-home system, the Missouri Baptist Foundation, Missouri Baptist University and Word & Way newspaper—more than five years ago.

“We are very thankful for Judge Callahan’s decision,” Windermere President Dan Bench said. “After carefully considering the merits of the case, the judge made the decision we have always believed was right. We look forward to putting this unhappy event behind us and to have all the Baptists of Missouri rejoicing and serving together.”

The convention plans to appeal, according to MBC lead attorney Michael Whitehead in an article on the website of the convention’s newspaper, The Pathway.

The convention is disappointed the Windermere case did not go before a jury, Whitehead said. Representatives from the Missouri convention said they plan to ask the Missouri Court of Appeals for the Western District to offer a ruling rather than to return the case to the circuit court.

The convention first filed suit Aug. 13, 2002, in an effort to force the five institutions to rescind changes they had made in their corporate charters. The Baptist Home changed its articles of incorporation in 2000 to elect its own trustees. The other four agencies took similar actions in 2001.

The March 4 ruling centered on two aspects of the convention’s argument—corporate membership and a contractual relationship with Windermere. The judge ruled the Missouri convention is not a member of Windermere’s corporation and no contract exists between the two entities.

Until August 2000, the convention had governed Windermere through its executive board. Messengers to the 1999 state convention annual meeting approved a reorganization plan that included incorporation of Windermere and Word & Way as separate entities. Windermere’s charter, drawn up in 2000, noted the new corporation would have no members.

The Missouri convention has acknowledged the original incorporation articles declare Windermere has no members. But attorneys argued that because Windermere had granted the convention permission to elect the center’s trustees, the action made the convention, de facto, the only member of Windermere’s corporation.

Callahan said Missouri law dictates that individuals can participate in election of an agency’s board without becoming a corporate member of that organization. A corporation without members does not become a corporation with members just because it grants limited rights to a third party, he ruled.

Windermere also has the right to change its charter without convention approval, Callahan said. “The ‘rights and privileges’ given to the MBC and/or its messengers under Windermere’s original articles were not ‘fixed, unalterable, irrevocable’ rights, but were rights or privileges subject to amendment by Winder-mere,” the judge wrote.

He added that while the law protects the convention’s rights, trustee election is merely a privilege Windermere’s original incorporating articles granted to the convention. He also noted that as a drafter of the original charter, the Missouri convention could have clearly spelled out rights to be granted.

The judge dismissed the idea that Windermere’s articles of incorporation and the MBC’s governing documents created a contract between the two entities. The charter, he said, constitutes a contract only between the center and the State of Missouri.

The court also noted that a binding covenant agreement did not exist between the convention and Windermere because the agreement did not list obligations for both parties. The convention could change the agreement unilaterally by changing its governing documents, and the convention had the right to terminate a covenant agreement at any time, Callahan said.

Furthermore, Callahan said, no mutual obligation between the two existed because under the governing documents’ provisions, the convention was not obligated to support the center and could withdraw any support it provided at any time.