An appellate court in Texas has ruled that notice of a meeting of a nonprofit’s nominating committee was ineffective when sent to committee members only by electronic mail and not by one of the methods for providing notice set forth in the bylaws of the corporation.  The ruling came in a lengthy opinion denying summary judgment to both sides in a dispute over elections in a homeowners’ association.  (Swonke v. First Colony Community Services Association, Ct. of App., TX, Fourteenth Dist., Houston, No. 14-09-00019-CV, 6/15/10.)

Two members of the association complained that a series of irregularities resulted in an improperly elected board of directors.  One was a homeowner who had sought nomination but had not been selected.  One was a member of the nominating committee.  One of their arguments was that the nominating committee had not received proper notice when it was given only by email two days before the meeting.

They sued to enjoin an election in 2007, and after being denied a temporary injunction, filed for summary judgment.  The Association opposed, partly on the grounds that the owners lacked standing to sue, and partly on the ground that the procedures were followed correctly.  The trial court granted judgment on both grounds.

After determining that homeowners would be personally aggrieved by improper election procedures and therefore had standing to bring the case, the Court turned to summary judgment issues raised by the parties. 

The owners argued that the 2007 nominating committee was not the proper committee to consider the nominations because the Association’s original bylaws provided a different method of selection.  The Association argued that the bylaws had been amended and the committee was proper.  The Court of Appeals said neither side had conclusively proved its case and denied summary judgment to both, leaving the conflicting testimony to be resolved at trial.

The Court, however, did render a decision on the validity of the notice if the 2007 committee turned out to be the proper committee.  It acknowledged the general rule that courts should not interfere with the internal workings of voluntary organizations, but said that courts do intervene where the organization violates its own bylaws or the laws of the state, as was alleged here.

The owners said there were two provisions of the bylaws that potentially covered the method for notice of a committee meeting.  (The Association admitted that notice was required and did not prove that all members and alternates received the email.) One section authorized notice of a special meeting of the directors by personal delivery, first class mail, telephone or facsimile or telegram.  A more general section dealing with “all notices … made or given under these bylaws” authorized written notice delivered personally, by first class mail, or facsimile.

The Association argued that the second provision covered only notices required by the bylaws and did not preclude other methods for notices not specifically required by the bylaws.  The Court did not read the provision “so narrowly.”  It said the provision was a “catch-all” provision covering anything not specifically covered in the bylaws.  It also concluded that “the specificity of the section with regard to how and where notice is delivered indicates that it was intended to be exclusive of other methods.” Under either section that might be applicable, email was not permitted, the Court said.

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It is not clear that every court would agree with this conclusion, especially if the organization routinely uses email for notices.  But it is a good reminder that notice provisions ought to be reviewed periodically to be sure that they reflect reality and current technology.  A great many bylaws authorize telegram notice (although telegrams no longer exist) and fail to mention email or some of the social networking methods that are more likely to be used.