November 19, 2002
JEFFERSON CITY — Missouri Baptist Convention (MBC) attorneys will ask a circuit court judge Nov. 19 to deny a request by attorneys for five breakaway MBC agencies to have legal action against the agencies dismissed.
Attorneys for the Baptist Home, Windermere Baptist Conference Center, Word & Way, Missouri Baptist Foundation and Missouri Baptist College filed motions last October, asking a Cole County Circuit Court judge to dismiss the legal action filed by the MBC in an effort to bring the five entities back into the MBC fold.
Oral arguments will be presented to Cole County Circuit Court Judge Tom Brown at 9 a.m., Nov. 19. Attorneys from both sides of the issue will participate.
MBC attorneys filed a 79-page response to the dismissal motion Nov. 13, describing the motion to dismiss as attempts "through strained readings of statutes and procedural sleights-of-hand to prevent the Defendant’s actions from being judged in open court on the merits."
Writing for the MBC legal team, James F. Freeman III, a Kansas City attorney, challenged the agencies’ contention that the MBC is not a member of each of the five corporations and, therefore, has no legal standing to sue.
"The Defendant Corporations’ presumptuous ploy has always hinged on the esoteric theory that MBC is not a member of the agency corporations, and that MBC has no legal status or standing to complain about the loss of five agencies worth $200 million," Freeman writes. "The Defendant Corporations’ stratagem for cutting off MBC’s legal rights in these corporations cannot plausibly justify cutting off MBC’s legal rights to proceed with this action."
Attorneys for the agencies have argued that the MBC cannot be a member because each agency charter contains words to the effect that "the corporation will have no members."
"The fact that a person is given the right to elect directors causes him to be a member as a matter of law, even if the corporation’s charter says there are no members," Freeman says. "For that reason, MBC is the sole member of each Defendant Corporation by virtue of the right to elect trustees."
Freeman will tell the judge that "standing" is a relatively low threshold to meet. He cites a 1997 Missouri Supreme Court case which said: "Reduced to its essence, standing roughly means that the parties seeking relief have some personal interest at stake in the dispute, even if that interest is attenuated, slight or remote."
"Clearly … plaintiffs’ interests in this petition are not ‘attenuated, slight or remote,’ but rather involve the right to control five corporations, historically and contractually related to the Plaintiffs, which oversee millions of dollars in assets provide by and through Plaintiffs," Freeman writes.
Freeman says attorney for the agencies have also erred in their attempts to argue that "an individualized or pecuniary interest" is a necessary basis for legal standing.
"The renegade agencies are not public charities or public institutions, as they were not formed to serve the public at large or to render governmental services," Freeman contends. "If not direct beneficiaries to the contract of incorporation, the MBC is at a minimum an indirect beneficiary of the Corporate Charters, bylaws and procedures."
Denying the MBC legal standing, Freeman says, would also violate the Missouri Constitution.
"… If the Court concludes … that either the Plaintiffs are not members of the corporation or that members must bring their case as a derivative action, then the Court will have deprived plaintiffs of their right to seek redress of recognized causes of action," Freeman says.
"Such a result is not permitted under the Open Courts Guarantee of the Missouri Constitutions, which states: ‘That the Courts of Justice shall be open to every person, and certain remedy afforded for every injury to person, property or character, and that right and justice shall be administered without sale, denial or delay.’
"Put most simply, Article I, Section 14, prohibits any law that arbitrarily or unreasonably bars individuals or classes of individuals from accessing our courts in order to enforce recognized causes of action for personal injury."
Six Missouri Southern Baptist churches have joined the MBC Executive Board in the legal action against the agencies. Agencies’ attorneys are contending that the churches are not proper parties to the lawsuit. Freeman calls it an effort "to bolt the door to the courthouse" to the churches.
"Such an argument misstates the law and ignores over a century of Missouri case law which permits parties very similar to Plaintiffs to bring an action on behalf of an unincorporated association to prevent illegal acts …" Freeman says.
"In 1994, an unincorporated association filed suit to enjoin a subsidiary not-for-profit corporation from engaging in actions almost identical to the charter amendment actions attempted by the five agencies in this instance," Freeman explains in the brief.
"As in the present case, the renegade corporation challenged the petitions’ right to bring action to challenge the renegade’s illegal actions on standing grounds. The Indiana court rejected the challenge, finding that the representatives of the unincorporated association which had formed the renegade subsidiary corporation could properly bring suit to enforce the rights of the association."
Freeman will tell the court that efforts to have the case thrown out of court is nothing more than "word games" by the defendants, adding that the "attempts at gamesmanship is unavailing."
"Even if the Court were to adopt the position … that the right to elect trustees is a mere ‘privilege,’ … the right to elect trustees is not the only right of which the Defendants … sought to deprive the MBC by amending their charters," Freeman argues
Using the Baptist Home as an example, he said the Home’s amendment of its charter also denies the MBC of the right to:
- Approve amendments to the Home charter;
- Direct the disposition of Home assets in the event of its dissolution;
- Approve the sale or encumbrance of any real property owned by the Home on the Home site; and
- Have all Home corporate governing powers exercised consistently with the provisions of the MBC Constitution.
"The rights for which plaintiffs seek relief go far beyond the right to elect trustees," Freeman says.
Another argument presented by the agencies is that revisions in Missouri law make their charter clauses granting rights to the MBC as unauthorized and illegal.
If that is the case, Freeman says, "The Defendant Corporations are about 40 years too late."
"The Defendants have continued to ask for and receive money from the MBC on the assumption that Defendants were agencies of the MBC, continuing to be accountable to the MBC for governance as contained in the agency charters, as set forth in the MBC constitution and bylaws," Freeman argues.
"And the Defendants have been in a superior position to know the facts that they now claim as a bar to plaintiffs’ action. Defendants kept silent about their theory until their assets had grown to about $200 million. Now that they have chosen to break away and align themselves with a new state association, they want to argue that their corporate charters have been illegal from the inception.
"The doctrines of equitable estoppel and waiver will not let such arguments be heard after plaintiffs have relied on prior understandings for years, and have given millions of dollars in reliance."