Opinion
NO. 03-15-00643-CV
05-11-2016
Bryan D. "Doug" Lippert and Jane Lippert, Appellants v. Chris Eldridge, Appellee
FROM THE DISTRICT COURT OF COMAL COUNTY, 274TH JUDICIAL DISTRICT
NO. C2014-1453C, HONORABLE BRUCE R. BOYER, JUDGE PRESIDINGMEMORANDUM OPINION
Bryan and Jane Lippert, homeowners in the deed-restricted community of Comal Trace in Bulverde, Texas, and members of the Comal Trace Homeowners Association, appeal the trial court's summary judgment in favor of Chris Eldridge, volunteer president of the Association's Board of Directors. After a dispute about a fence in the Lipperts' backyard escalated, the Lipperts filed suit against the Association alleging, among other causes, tortious interference with property rights. They later amended their pleading to add a cause of action for invasion of privacy against Eldridge after he barred them from attending an Association meeting and allegedly made comments about them at the meeting. The trial court granted Eldridge's motion for summary judgment, in which he asserted that he was immune from liability under state and federal "volunteer immunity" statutes. See 42 U.S.C. § 14503; Tex. Bus. Orgs. Code § 22.235. For the following reasons, we will reverse the trial court's summary judgment and remand this cause for further proceedings.
The parties are familiar with the facts, procedural history, and applicable standards of review. Accordingly, we will not recite them here except as necessary to advise the parties of the Court's decision and the basic reasons for it. See Tex. R. App. P. 47.4.
In his summary-judgment motion, Eldridge asserted that he was immune from liability under both state and federal law, citing the Texas Non-Profit Corporations Act (the Texas Act), Tex. Bus. Orgs. Code § 22.235, and the "Federal Volunteer Act" (the Federal Act), 42 U.S.C. § 14503. He attached to his motion his own affidavit in support of his claimed immunity as a volunteer officer of the nonprofit Association. The Lipperts submitted evidence in response, including their own affidavits. After the trial court heard the motion and granted it, the Lipperts filed a motion to reconsider, attaching deposition testimony from Tina Jameson, an employee of the Association's property-management company. The trial court held a hearing on the motion to reconsider and admitted the Jameson deposition but ultimately denied the motion to reconsider.
Eldridge does not appeal the trial court's admission of the Jameson deposition.
On appeal, the Lipperts contend that the trial court erred in granting Eldridge's summary-judgment motion because he was not entitled to immunity under either of the cited "volunteer immunity" statutes and that, in any case, the statutes do not provide immunity for intentional acts that are in violation of state or federal laws. We will address the two statutes in turn.
The Lipperts claim that by excluding them from the meeting, Eldridge violated the Texas Property Code. See Tex. Prop. Code § 209.0051(c) ("regular and special board meetings [of property owners' associations] must be open to owners, subject to the right of the board to adjourn a board meeting and reconvene in closed executive session . . . .").
Texas Act
The applicable section of the Texas Act provides:
An officer [of a nonprofit corporation] is not liable to the corporation or any other person for an action taken or omission made by the officer in the person's capacity as an officer unless the officer's conduct was not exercised: (1) in good faith; (2) with ordinary care; and (3) in a manner the officer reasonably believes to be in the best interest of the corporation.Tex. Bus. Orgs. Code § 22.235(a). It is undisputed that Eldridge, as president of the Association, was an officer of the Association. It is also undisputed that the Association is a nonprofit corporation under the Texas Act and that section 22.235 applies to the Association. See id. § 22.001(5) ("'Nonprofit corporation' means a corporation no part of the income of which is distributable to a member, director, or officer of the corporation, except as provided by Section 22.054."). Nonetheless, the Lipperts make several arguments about why Eldridge was not entitled to summary judgment under the Texas Act.
They first contend that the officer immunity provided for in the Texas Act is an affirmative defense on which Eldridge had the burden of proof. They argue that to be entitled to summary judgment, he had to conclusively establish the three statutory elements of the defense, which his summary-judgment affidavit did not do because it was merely conclusory. See Prime Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 637 (Tex. App.—Houston [1st Dist.] 2002, pet. denied) (noting that affidavits containing conclusory statements unsupported by facts are not competent summary-judgment evidence). They also contend that Eldridge should have known about and complied with the open-meetings provision in the Property Code, see Tex. Prop. Code § 209.0051(c), notwithstanding any contrary provisions in the Association's bylaws (on which he claims he and the Board relied), and that his failure to comply with the Property Code is evidence that he did not act in good faith or with ordinary care. Finally, they contend that their affidavits and Jameson's deposition testimony create material fact issues on each of the three elements of Eldridge's claimed immunity. We agree with the Lipperts on this latter point and therefore need not reach either of their other arguments.
The following evidence creates material fact issues on whether Eldridge acted (1) with ordinary care and (2) in good faith and whether he (3) reasonably believed that he was acting in the Association's best interest: • Jameson's deposition, in which she testified that she advised Eldridge that it was unlawful to exclude the Lipperts from attending the meeting and that Eldridge publicly announced to the meeting attendees that the Lipperts had sued the Association and therefore could not attend the meeting; • Bryan Lippert's affidavit, in which he averred that: (a) Eldridge noticed the Lipperts sitting in the meeting room before the meeting was scheduled to begin but waited 20 minutes before asking them to step outside the room to speak with him; (b) an audio recording was made of the conversation and meeting, but Eldridge lowered his voice each time he spoke about the bylaws or about whether he had discussed the issue with Jameson; and (c) the Association had not posted the audio recording or minutes of the meeting on its website, despite Eldridge's statement that it had; and • Eldridge's affidavit, in which he testified that Jameson had agreed with the Board's "unanimous" decision to rely on the bylaws and exclude the Lipperts from the meeting.
Eldridge's statement that Jameson agreed with the Board's decision is in conflict with Jameson's testimony that she advised Eldridge that excluding the Lipperts was unlawful, and Bryan Lippert's affidavit raises a fact issue about Eldridge's intent behind his actions. This evidence supports the reasonable inferences that Eldridge knew or suspected that excluding the Lipperts was unlawful but excluded them anyway and that he did not exercise reasonable care, act in good faith, or reasonably believe that his conduct was in the best interest of the Association. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985) (summary-judgment evidence must be viewed in light most favorable to non-movant, and every reasonable inference and all doubts must be resolved in non-movant's favor). The issues of ordinary care, good faith, and reasonable belief are generally fact questions to be resolved by the factfinder and not on summary judgment unless they are conclusively established. See, e.g., Corral-Lerma v. Border Demolition & Envtl. Inc., 467 S.W.3d 109, 122 (Tex. App.—El Paso 2015, pet. filed) (holding that summary judgment was improper because evidence created fact issue on whether party reasonably believed agent had apparent authority); Adams v. Downey, 124 S.W.3d 769, 774 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (noting that movant on summary judgment fails to conclusively establish good faith when material facts relied on to support it are disputed). On this record, a reasonable factfinder could have drawn inferences or conclusions other than those that the trial court impliedly drew in favor of Eldridge. Resolving all reasonable inferences and doubts in the Lipperts' favor, we conclude that there were disputed material facts on all three statutory elements of immunity under the Texas Act and that the trial court erred in granting Eldridge summary judgment on that basis. See Nixon, 690 S.W.2d at 546.
Federal Act
The applicable provision of the Federal Act provides:
[N]o volunteer of a nonprofit organization or governmental entity shall be liable for harm caused by an act or omission of the volunteer on behalf of the organization or entity if-42 U.S.C. § 14503. There is no dispute that Eldridge is a volunteer under the Federal Act, but the parties do dispute whether the Association meets the act's definition of a "nonprofit organization," see id. § 14505(4)(B) (defining "nonprofit organization" as any not-for-profit organization that is "organized and conducted for public benefit and operated primarily for charitable, civic, educational, religious, welfare, or health purposes" (emphasis added)). However, assuming without deciding that the Association is "organized and conducted for a public purpose" and that the Federal Act applies to Eldridge, we conclude that the evidence, as cited above, creates a material fact issue on the third element requiring that the harm not have been "caused by willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the individual harmed by the volunteer."Id. § 14503(a)(3). A reasonable factfinder could draw inferences from the cited evidence in favor of the Lipperts and conclude, for example, that Eldridge may have been lying when he told the Lipperts that Jameson agreed with the Board's decision to exclude them from the meeting and that the process by which he excluded them constituted reckless misconduct or conscious or flagrant indifference to their rights. Accordingly, the trial court erred in granting summary judgment in favor of Eldridge on the basis of the Federal Act.
(1) the volunteer was acting within the scope of the volunteer's responsibilities in the nonprofit organization or governmental entity at the time of the act or omission; [and]
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(3) the harm was not caused by willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the individual harmed by the volunteer.
The Lipperts contend that there is a fact issue on the first element of the statute because Eldridge was not acting within the scope of his duties as President—that he was acting "ultra vires"—by not adhering to the Property Code's open-meeting provision. See 42 U.S.C. § 14503(a)(1). We need not reach this question because under the plain language of the statute ("no volunteer . . . shall be liable . . . if . . . . ," id. (emphasis added)), a defendant has the burden to prove all elements of the immunity defense, and we have concluded that the Lipperts' evidence creates a fact issue on the third element. The statute also contains two other elements that are not applicable to the present case (pertaining to licensing/certification requirements and use of motor vehicles). See id.§ 14503(a)(2), (4). --------
CONCLUSION
For the foregoing reasons, we reverse the trial court's summary judgment and remand this cause for further proceedings consistent with this opinion.
/s/_________
David Puryear, Justice Before Justices Puryear, Goodwin, and Field Reversed and Remanded Filed: May 11, 2016