A dispute over the governing documents of a non-profit organization has raised an interesting question about trial court’s authority to prescribe a remedy that neither of the parties to the dispute requested.


The Nigerian Foundation v. Bedford Umezulike, Kenny Efunpo, Emaido Hailey, Ola Joseph, and Tobias Ogu (No. 01-20-00262) arose from mutual accusations of financial mismanagement between members of the board of directors and the executive officers of a private, non-profit foundation. At issue in the dispute was whether the foundation’s bylaws, adopted during the 1980s, or a subsequent set of bylaws adopted in 2013 governed the attempts of the board and the officers to remove the other. The foundation relied on the 2013 document when it took action to dissolve the executive offices and terminate the officers from their positions. The officers, who declined to be terminates, relied on the 1980s bylaws when they prevailed upon the membership of the foundation to dissolve the board of directors. The foundation, through the board of directors, filed suit seeking a declaratory judgment that the board of directors was the governing body of the foundation, damages for conversion, breach of fiduciary duty, breach of contract, and trademark infringement, and a restraining order enjoining the officers from acting on the foundation’s behalf. Following a bench trial, the trial court determined that both sets of bylaws were in effect because neither had revoked or amended the other. Since they were in conflict, the trial court appointed a special master to conduct a new election of the board and ordered the foundation and the officers to split the cost. The foundation appealed.


In a 2-1 decision, the court of appeals affirmed. After resolving a preliminary issue involving the partial trial record before the court, the majority conducted a legal sufficiency review of the trial court’s findings of fact and a de novoreview of its conclusions of law. Much of the discussion in the majority opinion is devoted to these issues, the specific facts actually before the court, and the presumption that omitted parts of the record support the trial court’s judgment. Based on the partial record, the court of appeals upheld the trial court’s determination that both of the governing documents remained in effect and the Foundation was not entitled to declaratory relief.


Justice Farris dissented on the majority’s ruling, arguing that the trial court should have gone on to determine which document controlled over the other. She asserted that the trial court could not grant relief (the new election under the direction of a master) that had not been requested by the parties. The majority, however, similarly argued that it could rule on an issue that the appellant (the Foundation) did not raise, having only sought a legal and factual sufficiency review of the trial court’s finding. In the end, the majority concluded, neither party “conclusively established the other side lacked authority to govern.” The trial court’s order of a new election for the board of directors was thus reasonable and not an abuse of discretion. It also found that the trial court’s order splitting the master’s fees for conducting the election did not abuse the court’s discretion.


This is an interesting and unusual case that is probably limited to its facts and odd procedural posture, but the remedy ordered by the trial court and affirmed by the court of appeals might raise a few eyebrows. Rather than trying to reconcile the founding documents or simply picking one over the other, the trial court threw up its hands and told the Foundation to begin again with a new board. In the end, that equitable remedy may have been the course of action in what sounds like a pretty bitter dispute between adversaries in a divided camp.

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