Opinion
NOT TO BE PUBLISHED
San Francisco County Super. Ct. No. 507162
McGuiness, P.J.
Norman Vortigy appeals from an order denying his application to be appointed a trustee of the Institute of Religious Science, San Francisco (Institute) pursuant to Corporations Code section 9220, subdivision (d). Vortigy contends that the persons who claim to be members of respondent board of trustees of the Institute (Board) are not now and have never been members of that organization. We affirm.
All further statutory references are to the Corporations Code unless otherwise specified.
Factual and Procedural Background
The Institute is a nonprofit religious corporation founded in 1948. Vortigy first visited the Institute in the spring of 2003, when it was housed in a building at the corner of Balboa Street and 34th Avenue in San Francisco. Vortigy visited the Institute regularly during the spring and summer of 2004. According to Vortigy, the Institute at the time had only two or three active members, along with an old and ailing minister, Reverend Bullard.
Vortigy was away from San Francisco for several years but returned in the fall of 2006. In February 2007, he arranged to come to a meeting of the Institute’s trustees. Other than Vortigy, two people attended the meeting. They were Gaya Tinmahan and John Ingle, who introduced themselves respectively as the chairperson and treasurer. Vortigy was told that Reverend Bullard had retired and moved away from San Francisco in 2005. He also learned that one of the congregants, Brandi Swann, had succeeded Bullard but had passed away about one year later. After meeting with Tinmahan and Ingle, Vortigy asked to become a trustee and was invited to attend a meeting on February 28, 2007. Vortigy claims he was elected to the board as secretary at the meeting on February 28, 2007.
Vortigy refers to the trustees as “directors.” The Institute’s bylaws specify that it has a board of trustees, although the Nonprofit Religious Corporation Law (§ 9110 et seq.) requires a nonprofit religious corporation to have a board of directors. (See § 9210, subd. (a).) In this opinion we use the terms trustee and director interchangeably.
Vortigy attended services at the Institute on March 4, 2007. According to Vortigy, he became involved in a dispute with members in attendance over their plans to sell off the Institute’s building to pay off debts. Vortigy claims to have received a phone call that evening from a board member informing him that the board had held an impromptu meeting at which it had unanimously voted to remove him from the board. He was told he was no longer welcome at the Institute.
Vortigy arrived to attend services at the Institute on March 11, 2007, but was told to leave. Vortigy left after the police arrived in response to a complaint.
In early April 2007, Vortigy filed an “Application for Appointment of Director(s)” in the trial court, seeking to be named a trustee of the Institute. The application was premised on section 9220, subdivision (d), which in general permits a party in interest to petition a court to appoint directors of a nonprofit religious corporation when the corporation has no directors and has not issued memberships.
In his application, Vortigy claimed that the Institute had “fallen victim to usurpers, not members and not directors, who were trying to figure out a way unlawfully to seize and personally profit from the Institute’s building and whatever assets existed.” He asserted that the Institute had not issued any memberships since at least 2005 in a manner authorized under the Institute’s bylaws. He further claimed that all persons who were members before 2005 had either died, moved away, or resigned by October 2006. According to Vortigy, because a person must be a member in order to be a trustee, and because no members remained as of October 2006, it followed that the Institute had no trustees since at least October 2006. In view of the claimed absence of members and trustees, Vortigy asked the court to appoint him as a trustee of the Institute under section 9220, subdivision (d).
Vortigy included a copy of the Institute’s 1954 bylaws with his application. According to the bylaws, the affairs of the Institute are managed by a board of trustees, which consists of seven members. The bylaws establish one class of “members” that are selected by the board of trustees or a membership committee, if one exists. A trustee’s term of office is perpetual but subject to termination upon the trustee’s death, resignation, inability to substantially fulfill the obligation of a trustee, or removal from office by a vote of two-thirds of the other trustees. The bylaws provide there must be a quorum of four members of the board of trustees in order to transact business. Vacancies on the board of trustees are filled by a majority vote of the remaining trustees.
To the extent Vortigy has provided this court with documents allegedly filed in the trial court, such as the Institute’s bylaws and information statements filed with the Secretary of State, he has failed to explain when they were filed in the trial court, in what manner they were presented to the trial court (i.e., as part of a declaration or attached to another document), and how they were authenticated, if at all. In the absence of an objection from the Board, we will assume the documents were, in fact, filed in the trial court and properly authenticated.
Vortigy filed a lengthy declaration in support of his application. A substantial portion of the declaration recounts what he learned from others about events that purportedly occurred before Vortigy sought to rejoin the Institute in early 2007. In brief, Vortigy alleged that the current board of trustees became involved with the Institute only after the death of the previous minister, Brandi Swann. He asserted they could not have become “members” under the bylaws because there was no board to appoint them. And, according to Vortigy, because they were not members, they could not constitute a board.
Allegations about what Vortigy learned from others are hearsay in that they comprise out-of-court statements offered for the truth of the matter stated. (See Evid. Code, § 1200.) We summarize his allegations here simply to reflect the nature of his claims against the Institute, but we do not suggest the statements constitute competent evidence.
The Board opposed the application and filed declarations by Gaya Tinmahan, John Ingle, and Arthur Hamilton, each of whom claimed to be a trustee of the Institute. The declarations each stated that the current Board was composed of Hamilton, Tinmahan, and Ingle. These three individuals claimed to have been members of the Institute since April 2006, and trustees of the Institute since November 5, 2006, when they were duly appointed by the then-incumbent members of the board of trustees. The declarations do not name the incumbent board as of November 5, 2006, although the brief submitted on behalf of the Board identifies the board members as Gary Allen and Reginald Wise. While the brief does not cite any evidentiary support for the claim that Allen and Wise were board members as of November 2006, a statement of information filed on behalf of the Institute with the Secretary of State on April 7, 2006, identified Allen as an officer of the Institute, along with Pamela Johnson and Brandi Swann. Wise was identified as an officer of the Institute in an earlier statement of information, filed with the Secretary of State on December 15, 2005. The most recent statement of information contained in the record on appeal reflects that Tinmahan, Hamilton, and Ingle were the officers of the Institute as of April 9, 2007.
Each of the declarants opposing the application stated that Vortigy was not, and had never been, a formal member of the Institute. They also each stated that Vortigy had never been elected to the board of trustees. Tinmahan explained in her declaration that she first met Vortigy on February 14, 2007. She stated “[i]t became readily apparent to myself and other members of the Board that Vortigy was emotional[ly] unstable and was prone to emotional outburst. On at lease [sic] one occasion the San Francisco Police had to be summoned to remove Vortigy from the Institute premises.”
Following a hearing on May 14, 2007, the trial court denied Vortigy’s application. In a written order filed May 25, 2007, the court stated: “The motion of petitioner NORMAN VORTIGY, for an appointment of a director of a non-profit religious corporation under California Corporation[s] Code §9220, is DENIED. Petitioner NORMAN VORTIGY failed to carry his burden to present evidence required by California Corporation[s] Code §9220.”
In his opening brief, Vortigy describes comments allegedly made by him, opposing counsel, and the court at the various hearings in the matter. Because Vortigy has chosen to proceed without a reporter’s transcript, we will disregard Vortigy’s characterization of what transpired at the hearings. If Vortigy believed the statements made at various hearings were relevant to the issue of whether the trial court erred, it was incumbent upon him to designate the transcripts of those hearings as part of the record on appeal.
On June 8, 2007, Vortigy filed a motion seeking reconsideration of his application. He sought reconsideration on the following grounds: (1) there was new evidence in the form of a letter from Wise, a putative board member who allegedly appointed the current board members in November 2006, disclaiming that he was ever a member of the Institute; (2) there was new evidence, in the form of a grant deed reflecting that the individuals claiming to be trustees had sold the Institute’s building on March 16, 2007, supposedly evidencing “grand theft” of the Institute’s assets; (3) the order denying the motion had an improper title; and (4) the court failed to make findings as to whether there were presently members and trustees of the Institute. The letter purportedly written by Wise is handwritten, unverified, and unauthenticated. In the undated letter, which bears a header indicating it was faxed on May 11, 2007, the author states he was never a member of the Institute, although he acknowledges he was the Institute’s chief financial officer at the request of Pamela Johnson, who took over after Reverend Bullard left. He wrote that Gary Allen was the last active member of the Institute after the death of Pamela Johnson in approximately November 2006. The letter’s author also wrote that none of the current members of the Board were actual church members.
Vortigy styled his action as the “Application of Norman Vortigy,” whereas the Institute denominated the action “Norman Vortigy v. Board of Trustees of Institute of Religious Science, San Francisco.” Vortigy suggests the respondents chose the alternative title in order to appear to be the legitimate trustees. Neither case title is appropriate. Because an application to appoint directors pursuant to section 9220, subdivision (d), is a nonadversary proceeding that may later become contested, the proper title reflects the nonadversary title (“In re” the corporation at issue) followed by the adversary title (petitioner vs. objector). (See, e.g., In re Annrhon, Inc. (1993) 17 Cal.App.4th 742 [action to appoint director under section 308]; In re Jamison Steel Corp. (1958) 158 Cal.App.2d 27 [same].)
Vortigy asserts that an obituary for Brandi Swann (the former minister) appearing in the San Francisco Chronicle on November 4, 2006, stated that the name Pamela Johnson was an alias used by Swann.
The court denied Vortigy’s motion for reconsideration following a hearing on July 9, 2007. The register of actions contains the following entry associated with the denial of the motion: “The Wise letter is not a statement under oath and may not be considered as evidence. The grant deed does not address the question of the issuance of memberships. Mr. Vortigy’s concerns are appropriately addressed by the Office of the Attorney General. The time to object to the form of the prior order has expired under Rules of Court 391(a). The request for sanctions is denied.” A written order filed on July 9, 2007, confirms that Vortigy’s reconsideration motion was denied because he “failed to base his motion for reconsideration upon new or different facts, circumstances or law, and failed to oppose to [sic] the form of the proposed order under Cal. Rules of Court Rule 391(a).”
Vortigy filed a notice of appeal on July 16, 2007.
As an order completely disposing of the only issue before the court, the order denying Vortigy’s application to appoint trustees is an appealable judgment. (See Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 700; Edlund v. Los Altos Builders (1951) 106 Cal.App.2d 350, 355.) Vortigy’s motion for reconsideration extended the time to appeal (Cal. Rules of Court, rule 8.108(e)), although his notice of appeal would have been timely even without the extra time allowed for the reconsideration motion. (See Cal. Rules of Court, rule 8.104(a).)
Discussion
Our first task on appeal is to ascertain the standard that guides our review of the trial court’s action. Vortigy does not address the standard of review but instead proceeds upon the apparent assumption that we must undertake an independent or “de novo” review of the issues before the trial court.
In this appeal, we are called upon to review an order denying an application brought pursuant to section 9220, subdivision (d), which provides in relevant part that the trial court “may appoint directors of the corporation” under certain circumstances. The statute grants the trial court discretion to grant or deny an application. (See Annrhon, Inc. v. Lesinski, supra, 17 Cal.App.4th at p. 751.) Such discretionary rulings “are reviewed under the ‘abuse of discretion’ standard.” (Ibid.) “Under the ‘abuse of discretion’ standard of review, appellate courts will disturb discretionary trial court rulings only upon a showing of a ‘clear case of abuse’ and a ‘miscarriage of justice.’ [Citations.]” (Hernandez v. Superior Court (1992) 9 Cal.App.4th 1183, 1190.) Therefore, Vortigy must establish an abuse of discretion to justify reversal of the trial court’s order. However, to the extent our analysis turns on issues of statutory construction, such as the proper interpretation of section 9220, our review is de novo. (See People v. Morris (2005) 126 Cal.App.4th 527, 535.)
Section 9220, subdivision (d) provides: “If a corporation has not issued memberships and (1) all the directors resign, die, or become incompetent, or (2) a corporation’s initial directors have not been named in the articles and all incorporators resign, die, or become incompetent before the election of the initial directors, the superior court of any county may appoint directors of the corporation upon application by any party in interest.” Thus, in order to invoke section 9220, subdivision (d), a party in interest must demonstrate both that a nonprofit religious corporation has issued no memberships and that the corporation lacks even one incumbent director who can carry on the affairs of the corporation.
Here, there was evidence before the trial court that the Institute had members and that it had not just one but three incumbent directors (i.e., trustees). Absent some reason to disregard this evidence, Vortigy did not meet his burden under section 9220, subdivision (d), to justify appointing directors of a nonprofit religious corporation.
Vortigy questions the evidence offered by the Board, arguing that the three persons who claim to be trustees failed to present any documentary proof showing that they are members and trustees of the Institute. While it would have strengthened the Board’s position to offer supporting documents, such as corporate minutes and membership rosters, we cannot say the trial court abused its discretion by relying on the sworn statements of the three individuals who claim to be trustees of the Institute. To the extent there is documentary evidence in the record, such as corporate statements of information filed with the Secretary of State, it tends to confirm the sworn statements filed by the three putative trustees.
Vortigy’s primary complaint is that the current trustees were never members of the Institute and therefore could not have been designated as trustees. He claims that if the number of members falls below seven, a proper board of trustees cannot exist and new members cannot be chosen.
Vortigy’s focus on the supposed lack of members is misplaced. A nonprofit religious corporation does not need to have “members” in order to function. (See 1 Advising California Nonprofit Corporations (Cont.Ed.Bar. 2d ed. 2007) § 9.3, p. 485.) As used here, “member” is a term of art that refers to a person who is granted certain rights to vote on various corporate matters. (Id. at § 9.2, p. 485.) When the directors of a nonprofit religious corporation are the only members, the corporation is treated by law as having no members. (Id. at § 9.4, p. 487; § 9310, subd. (c).) Consequently, when the directors are the only members, it is unnecessary to make someone a member before designating that person a director of the corporation.
Furthermore, a nonprofit religious corporation does not need to have a full complement of directors or even a quorum in order to appoint replacement directors. Section 9224, subdivision (a) states that “[u]nless otherwise provided in the articles or bylaws and except for a vacancy created by the removal of a director by the members, vacancies on the board may be filled by approval of the board (Section 5032) or, if the number of directors then in office is less than a quorum, by (1) the unanimous written consent of the directors then in office, (2) the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with Section 9211, or (3) a sole remaining director.” There is nothing the Institute’s bylaws that is inconsistent with this statute. Accordingly, as long as there is at least one remaining, competent trustee, the board may appoint replacement trustees. Here, there was evidence that at least one remaining trustee appointed the current trustees of the Board.
The bylaws provide that vacancies on the board may be filled by a majority vote of the remaining trustees.
Vortigy claims the trial court erred by disregarding the letter purportedly written by Reginald Wise, who stated he had never been a member of the Institute. The register of actions reflects that the court refused to consider the letter as evidence because it was not a statement under oath. Vortigy asserts that the letter falls under one of the exceptions to the general rule that hearsay evidence is inadmissible, citing Evidence Code sections 1202, 1230, 1420, and 1421.
The letter allegedly written by Wise does not aid Vortigy. A writing must be authenticated before it may be received into evidence (Evid. Code, § 1401), and the authenticity of a writing is a preliminary fact that must be determined by the trial court. (Evid. Code, § 403, subd. (a)(3).) We review a trial court’s decision as to the existence of a preliminary fact under the abuse of discretion standard. (See People v. Lucas (1995) 12 Cal.4th 415, 466.) Here, we cannot say the court abused its discretion by concluding that Vortigy failed to properly authenticate the undated, handwritten document supposedly written by Wise. Furthermore, even if we were to conclude the court abused its discretion, the letter’s content does not change our analysis. According to the letter, Gary Allen was the last “member” of the Institute. If Allen were the sole remaining trustee as of November 2006, as the letter suggests, he was empowered to appoint replacement trustees. Thus, the letter does not undermine the Board’s claim that there are currently three trustees who were properly appointed by the incumbent board of trustees as of November 2006.
We observe that Vortigy’s application to appoint trustees was, in effect, a challenge for control of the Institute, with Vortigy disputing the authority of the incumbent trustees. As a general matter, a corporate outsider such as Vortigy has no standing to challenge a corporation’s management or control. (See Korean Philadelphia Presbyterian Church v. California Presbytery (2000) 77 Cal.App.4th 1069, 1083 [parties who were not members of church or entitled to vote for its officers or directors had no standing to sue or challenge authority of board of directors].) Section 9220, subdivision (d) does not afford Vortigy the standing he otherwise lacks. In order to invoke section 9220, subdivision (d), an interested party must establish that a nonprofit religious corporation has no directors to carry on the corporation’s affairs. The statute is not a device for corporate outsiders to challenge the authority of incumbent corporate officers or directors.
Vortigy failed to satisfy his burden under section 9220, subdivision (d). Accordingly, the trial court did not abuse its discretion when it denied his application to be appointed a trustee of the Institute.
Finally, we address the Board’s contention that this court should impose monetary sanctions on Vortigy for pursuing a frivolous appeal. Because the Board’s request does not comply with rule 8.276(b) of the California Rules of Court, which governs motions for sanctions, we will disregard it.
Disposition
The trial court’s orders of May 25, 2007, and July 9, 2007, are affirmed. Respondent shall recover its costs on appeal.
We concur: Pollak, J. Horner, J.
Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.