Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from the Superior Court of San Bernardino County No. RCVRS088724, Donald G. Umhofer, Judge (retired judge of the San Luis Obispo Mun. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) and Kenneth Andreen, Judge (retired Associate Justice of the Court of Appeal, Fifth Appellate District assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed.
Stroud & Do and James T. Stroud for Plaintiff and Appellant.
The Law Offices of David Christianson and David E. Allen, Jr., for Defendants and Respondents.
OPINION
King, J.
I. INTRODUCTION
This case involves a dispute between two factions over control of a certain California nonprofit religious corporation. The corporation was originally named “Buddhist Temple of Chino Hills,” and later called “Wat Phra Buddha Chinnaraj Buddhist Temple of Chino Hills.” Its current name appears to depend upon which faction is in control. We will refer to it as the corporation.
Appellant Wat Phra Buddha Chinnaraj Buddhist Temple of Chino Hills (Wat) contends that the monks who reside at the temple control the corporation pursuant to certain bylaws written in 2003 (the 2003 bylaws). Respondent Buddhist Temple of Chino Hills and certain individuals (collectively, the Buddhist Temple) argued that the legitimate directors are those selected at a meeting held in February 2005 pursuant to the corporation’s original bylaws (the 1996 bylaws). The Buddhist Temple also relied upon a set of bylaws approved by the board of directors in 2002 (the 2002 bylaws).
The trial court found that both the 2002 bylaws and the 2003 bylaws were invalid and that neither side had followed the procedures set forth in the 1996 bylaws. There was thus no validly elected board of directors. The court ordered that an election of the board of directors be held, and appointed a special master to conduct the election in accordance with the 1996 bylaws. Each faction nominated three individuals for the board of directors. The election was held and the individuals associated with the Buddhist Temple were declared the winners. Wat appealed.
Wat asserts: (1) the court erred in determining that the 1996 bylaws were authentic and that the corporation had “members” for purposes of voting requirements under the Nonprofit Religious Corporation Law; and (2) the court’s ruling violates the constitutional right to the free exercise of religion. We reject these arguments and affirm the judgment.
II. FACTUAL SUMMARY
The corporation was incorporated as “BUDDHIST TEMPLE OF CHINO HILLS” in 1996 under California’s Nonprofit Religious Corporation Law. (See Corp. Code, § 9110 et seq.) The articles of incorporation are silent as to whether the corporation has or shall have members.
All further statutory references are to the Corporations Code unless otherwise indicated.
The corporation’s original bylaws—the 1996 bylaws—provide for two classes of membership in the corporation: “regular membership and family membership.” Regular members include “person[s] eighteen years of age or older, of good character, and dedicated to the purposes of [the] corporation,” upon acceptance by the board of directors of the person’s application and payment of dues and fees. Family membership is available to regular members and their spouses and dependents. The bylaws include numerous provisions concerning the rights of members, including procedures for annual and special meetings of members, requirements concerning notice to members of meetings, quorum requirements for meetings, and the right to nominate and vote for directors. There were initially approximately 100 members. By 2005, there were approximately 1,400 members.
The 1996 bylaws authorize a total of three directors. Members may adopt new bylaws and approve amendments to the bylaws. Subject to this right of the members, the board of directors may adopt or amend bylaws other than bylaws that change the authorized number of directors.
In 2000, the articles of incorporation were amended to change the name of the corporation to “WAT PHRA BUDDHA CHINNARAJ BUDDHIST TEMPLE OF CHINO HILLS.” The certificate of amendment recites that the amendment was “duly approved by the required vote of the members.” (Capitalization omitted.)
On March 23, 2002, the board of directors adopted the 2002 bylaws. These bylaws further provide that the board of directors shall consist of at least 9, but no more than 11, directors; and directors are to be elected by a majority vote of the officers. On the same date, the articles of incorporation were amended to state that “[t]he corporation has no members.” The certificate of amendment of the articles recite that the amendment was “duly approved by the Board of Directors.” Based upon the 2002 bylaws and the 2002 amendment to the articles of incorporation, one of the ostensible directors of the Buddhist Temple testified that the corporation “became a no membership organization.”
The only copy of the 2002 bylaws provided to us consists of only pages 1, 3, 7, 8, 9, and the final page bearing the certificate of the secretary. It appears from the reporter’s transcript that a complete copy of the 2002 bylaws was included in the evidence. On our own motion, we directed counsel for the parties to file a stipulation to augment the record attaching a complete copy of the 2002 bylaws. We did not receive the requested documents.
In March 2003, Tinnawat Unluang, as secretary of the corporation, certified that new bylaws—the 2003 bylaws—were “adopted by the Sangha Council (board of trustees).” According to these bylaws, the newly formed “Sangha council” was “vested with the authority to govern and control” the corporation; Sangha council members are permanent resident monks and visiting monks; and the permanent resident monks elect the members of an executive committee, including the chief executive officer. Under these bylaws, the Board of Directors of the corporation has either 9 or 11 members. If the board has nine directors, the chief executive officer has the power to appoint five directors; if the board has 11 directors, the chief executive officer has the power to appoint six directors.
In February 2005, the corporation was facing financial difficulties. Some believed that the solution was to sell land belonging to the corporation; others wanted to refinance the corporation’s debt without selling land. The chief executive officer, Dr. Sahat Nagasiri, called a meeting to address the issue. Notice of the meeting was made by telephone calls to certain staff members and monks; but notice was not given to the resident monks who wanted to sell the property or to those who were sympathetic to these monks. The telephone calls were made two or three days before the meeting, which was held on February 24, 2005. At the meeting, Dr. Nagasiri appointed Oravan Ketpongsuda to replace him as chief executive officer of the corporation. It was further resolved at that meeting to appoint three new directors, including Ketpongsuda.
The next day, Ketpongsuda, as chief executive officer, and Prakob Thongtha, as secretary, signed a certificate of amendment of articles of incorporation. According to this document, the name of the corporation was changed back to its original name, Buddhist Temple of Chino Hills. The amendment also purports to add a new article 6 to the articles of incorporation stating that “the corporation is a membership corporation.” (Capitalization omitted.) The document further provides that the amendments had been duly approved by the board of directors and that the corporation has no members. The certificate of amendment was filed in the California Secretary of State’s office.
On March 20, 2005, a meeting of “the Sangha Council (or Board of Trustees)” was called. Six of the eight members of the Board of Trustees were present at the meeting. According to the minutes of this meeting, there was discussion about “the illegal takeover of the corporation by a group of fraudsters”—an apparent reference to the events of February 24, 2005. The attendees elected new executive officers. On April 15, 2005, two of these executives signed a certificate of amendment of articles of incorporation. The document states that the corporation is renamed “WAT PHRA BUDDHA CHINNARAJ BUDDHIST TEMPLE OF CHINO HILLS,” and that the new article 6 added by the March 1, 2005, amendment is deleted. Finally, the certificate states, “The corporation has no members.” This document was filed in the office of the California Secretary of State.
Approximately one month later, on May 13, 2005, Ketpongsuda and Thongtha executed another certificate of amendment of the articles of incorporation stating that they are the chief executive officer and secretary of the corporation, respectively. The amendment changes the name of the corporation back to “BUDDHIST TEMPLE OF CHINO HILLS” and adds back article 6 to state that “the corporation is a membership corporation.” (Capitalization omitted.) The amendment further adds that it has been duly approved by the board of directors and the required vote of the members. This document was filed with the secretary of state.
In July 2005, Wat filed a complaint against the Buddhist Temple. Among other relief, the complaint sought a judicial “declaration as to which parties control, manage and operate” the corporation.
The Buddhist Temple filed a cross-complaint and, later, a first amended cross-complaint against Wat and five individuals. The Buddhist Temple sought a determination, pursuant to section 9418, that: the appointment of Ketpongsuda as chief executive officer and of new directors at the February 24, 2005, meeting was valid; the subsequent appointment by Wat of officers and directors in March 2005 was invalid; the Buddhist Temple’s board of directors is the governing body of the corporation; and the name of the corporation is Buddhist Temple of Chino Hills.
The individual plaintiffs and cross-defendants did not appeal from the judgment.
Section 9418, subdivision (a), provides: “Upon the filing of an action therefor by any director or member, or by any person who had the right to vote in the election at issue after such director, member, or person has exhausted any remedies provided in the articles or bylaws, the superior court of the proper county shall determine the validity of any election or appointment of any director of any corporation.”
The issues arising from Wat’s declaratory relief cause of action and the Buddhist Temple’s first amended cross-complaint were bifurcated and tried to the court. In its statement of decision, the court found that the corporation was formed as a “membership corporation.” The court explained that, under the Corporations Code, the corporation’s bylaws and articles could not be changed so as to materially and adversely affect the voting rights of the members. The 2002 amendment to the articles of incorporation, which states that the corporation has no members, has the effect of “wiping out [the members’] right to vote, it was invalid.” Because both the 2002 bylaws and the 2003 bylaws assumed that the corporation had no members and did not include member voting provisions, they were “both invalid enactments by directors. What remains are the 1996 original by-laws.” Finally, none of the actions taken by the different factions in 2005 to gain control of the corporation complied with the 1996 bylaws. The court ordered that a new election “be held and conducted to the extent feasible in conformity with the 1996 original by-laws.”
The election was held under the supervision of a court-appointed special master. The individuals affiliated with the Buddhist Temple each received 441 votes; the individuals affiliated with Wat received six votes each.
III. ANALYSIS
A. Trial Court’s Legal and Factual Determinations
The trial court found that the corporation was formed in 1996 as a corporation with members with voting rights; and because the members did not vote to amend the articles of incorporation in 2002 or to approve the 2002 bylaws or 2003 bylaws, these actions were invalid. Finally, the court found that the none of the supposed directors affiliated with either party had been properly elected according to the 1996 bylaws.
Wat challenges the court’s finding at the first step of this analysis. In particular, Wat argues that the corporation did not have members because the initial articles of incorporation do not indicate that the corporation shall have members. Indeed, the initial articles of incorporation are silent as to membership. The applicable rule is in section 9310, subdivision (a), which states: “A corporation may admit persons to membership, as provided in its articles or bylaws, or may provide in its articles or bylaws that it shall have no members. In the absence of any provision in its articles or bylaws providing for members, a corporation shall have no members.” Under the plain language of the first sentence of this statute, a corporation may provide for membership, or expressly provide that it shall have no members, in either “its articles or bylaws . . . .” The second sentence—“In the absence of any provision in its articles or bylaws providing for members, a corporation shall have no members”—is arguably ambiguous. It could be read to mean that if there is either (1) no provision in the articles for members or (2) no provision in the bylaws for members, then the corporation shall have no members. Under this interpretation, if the articles do not mention members and the bylaws do provide for members, the corporation shall have no members.
There is no requirement that the articles of incorporation of a nonprofit religious corporation make any statement regarding members. (§ 9130.)
Wat refers us to section 5310, subdivision (a), which includes identical language. Section 5310, however, applies to corporations incorporated under the Nonprofit Public Benefit Corporation Law. (§ 5110 et seq.) Here, the corporation in this case was incorporated under the Nonprofit Religious Corporation Law. (§ 9110 et seq.)
We reject this interpretation because it would essentially render meaningless the right, created in the first sentence, of a corporation to admit members as provided in either its articles or its bylaws. “[W]hen interpreting a statute, we must harmonize its various parts if possible, reconciling them in the manner that best carries out the overriding purpose of the legislation.” (Elsner v. Uveges (2004) 34 Cal.4th 915, 933.) The statute is plainly intended to allow incorporators of a nonprofit religious corporation to determine whether the corporation shall have or shall not have members. If the intent to have members is clearly expressed in the bylaws and no contrary intent is expressed in the articles of incorporation, the corporation should be viewed as a corporation that may admit members. Thus, reading the second sentence in light of the first and with the goal of giving effect to the apparent intent of the statute, we construe the statute as creating a corporation that permits members when either the articles or the bylaws provide for membership and neither document expresses a contrary intent.
The next issue is whether there is sufficient evidence in the record to support the trial court’s finding that the initial bylaws of the corporation provided for membership. The 1996 bylaws indisputably provide for the admission of members in the corporation. Wat contends, however, that these bylaws “lacked authenticity and do not control.” Initially, we note that the bylaws and the corporate minutes were admitted into evidence without objection. Thus, to the extent that Wat’s authenticity argument is a challenge to the admissibility of the 1996 bylaws, the contention is forfeited by its failure to object at trial. (See Platzer v. Mammoth Mountain Ski Area (2002) 104 Cal.App.4th 1253, 1260-1261.)
To the extent Wat is challenging the finding that the 1996 bylaws are in fact the original bylaws of the corporation, the contention is without merit. Vipat Khanampornpan testified at trial that he was the incorporator of the corporation. He testified that the 1996 bylaws were the initial bylaws for the corporation, approved at the first meeting of the board of directors, and signed by the corporation’s secretary. Khanampornpan also authenticated corporate minutes of the first meeting of the board of directors at which the bylaws were approved. This testimony is more than sufficient to support the finding that the 1996 bylaws are the original bylaws of the corporation. Because the corporation’s 1996 bylaws provide for the admission of members, there is substantial evidence to support the court’s determination that the corporation was initially “a membership corporation.”
Wat does not challenge the remaining steps in the trial court’s analysis. Nevertheless, we comment briefly on its correctness. The 2002 bylaws and the 2003 bylaws were both purportedly adopted by the board of directors or the Sangha Council, respectively, without a vote by the members. Wat traces the validity of these bylaws to the 2002 amendment of the articles of incorporation, which provide that the corporation has no members. According to Wat, this provision was included “to reflect that [Wat] was a non-member, California non-profit religious organization.” With some exceptions not applicable here, amendments to the articles of incorporation must be approved by the members of the corporation. (§§ 9620, 5812.) Moreover, as the trial court stated, an amendment to corporate articles must be approved by the members of a class if the amendment “would materially and adversely affect the rights of that class as to voting . . . in a manner different than such action affects another class.” (§§ 5813, 9620.) Here, the 2002 amendment effectively abrogated the voting rights of members other than the members who were then directors or the resident monks that comprised the Sangha Council. Finally, both the 1996 bylaws and the Nonprofit Religious Corporation Law prohibit the amendment of bylaws that change the number of directors without the approval of the members. (§ 9151, subd. (b).) Here, both the 2002 bylaws and the 2003 bylaws purported to expand the number of directors from three to at least nine without the approval of the members. For these reasons, the court did not err in finding that the 2002 amendment to the articles and the subsequent bylaws are invalid.
Nor did the court err in concluding that the individuals affiliated with Wat were not entitled to be directors of the corporation under the 1996 bylaws. As the court stated, there was no notice to, or voting by, the members (other than the Sangha Council members) concerning the selection of Wat’s ostensible directors, as required by the 1996 bylaws. Accordingly, the court properly ordered a new election to be held in accordance with the 1996 bylaws to the extent feasible. (See § 9418, subd. (c).)
The court’s order is expressly authorized by section 9418, subdivision (c), which provides: “The court, consistent with the provisions of this part and in conformity with the articles and bylaws to the extent feasible, . . . may order a new election to be held or appointment to be made, may determine the validity of the issuance of memberships and the right of persons to vote and may direct such other relief as may be just and proper.”
B. Interference With the Free Exercise of Religion
Wat further contends that by finding that the corporation was a membership organization, the court violated California’s constitutional guarantee to the free exercise and enjoyment of religion. (Cal. Const., art. 1, § 4.) The claim is without merit.
Under the California Constitution and the First Amendment to the United States Constitution, “courts cannot intrude into a religious organization’s determination of religious or ecclesiastical matters such as theological doctrine, church discipline, or the conformity of members to standards of faith and morality. [Citations.] ‘Ecclesiastical matters include in the main, creeds and proper modes of exercising one’s belief.’ [Citation.]” (Singh v. Singh (2004) 114 Cal.App.4th 1264, 1275.) “‘However, when the dispute to be resolved is essentially ownership or right to possession of property, the civil courts appropriately adjudicate the controversy even though it may arise out of a dispute over doctrine or other ecclesiastical question, provided the court can resolve the property dispute without attempting to resolve the underlying ecclesiastical controversy.’ [Citation.]” (Id. at p. 1280.) “‘“[A]s long as the court does not have to resolve the doctrinal propriety [of a church’s action] in order to determine who has legal control of the property, there is no unconstitutional intervention by the state in church affairs.”’ [Citation.]” (Id. at p. 1281.)
Wat argues that the 2003 bylaws were based upon “Theravadic Buddhist tradition dating back well over two thousand years.” The system of “theocratic control” set forth in the bylaws “reflected not a management or organizational approach to the temple but a basic religious one.” The 1996 bylaws, Wat continues, “did not support this Theravadic Buddhist tradition” and their use “violates basic religious laws dating back 2500 years.” By finding that the 1996 bylaws govern the corporation and that a vote by the members was required, the court “took control of the Buddhist Temple, a role set by religious doctrine and practice, out of the hands of the religious leaders and placed it in the hands of the voting laity.” We reject these arguments.
By deciding that the 2003 bylaws were invalid and the 1996 bylaws were valid, the court did not have to resolve any underlying ecclesiastical controversy. The central issues were whether the 1996 bylaws were validly adopted as the initial bylaws of the corporation and, if they were, whether the subsequent bylaws were adopted in accordance with the initial bylaws and applicable law. To determine whether the 1996 bylaws were authentic and validly adopted, the court relied upon the testimony of the incorporator of the corporation. The resolution of this issue did not require the court to determine any religious or ecclesiastical matter; the 1996 bylaws were either properly authenticated as such under the rules of evidence or not. As explained in the preceding part, they were.
The issue of whether the 2003 bylaws were valid also involved the application of “neutral principles of law” (see Singh v. Singh, supra, 114 Cal.App.4th at p. 1283); specifically, the statutes and bylaws that require approval of the members (when the corporation has members) for most amendments to the articles and to bylaws that cause a change in the number of directors. As the Singh court stated, the “application of contract law and provisions from the Corporations Code is a neutral-principles approach, which ‘cannot be said to “inhibit” the free exercise of religion, any more than do other neutral provisions of state law governing the manner in which churches own property, hire employees, or purchase goods.” (Id. at p. 1285.) By requiring the approval of members, these statutes do not infringe upon any religious tradition of clergy control because such approval is required only when the corporation is a corporation that has members. If the corporation’s articles and bylaws do not provide for membership, decisions that would otherwise require the approval of members require only the approval of the board of directors; rights that members would have are rights held only by the directors. (§ 9310, subds. (b), (c).) Whether a religious corporation is formed to provide for members is a matter left entirely to the incorporators and initial directors. The requirement of membership voting in this case is thus not the result of any judicial interference with Wat’s religion, but merely the neutral application of the expressed intent of the corporation’s founders.
If Wat’s supporters wish to form a Theravadic Buddhist religious corporation that places control of the corporation entirely within the hands of a council of resident monks, nothing in the trial court’s decision or the applicable statutes prevent them from doing so; their free exercise of their religion has not been impaired. If they want to change the governing structure of this corporation, formed as it was to provide for the voting rights of its members, they must first get the approval of the members.
IV. DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal.
We concur: McKinster, Acting P.J., Gaut, J.