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Marhula v. Grand Forks Curling Club, Inc.

Supreme Court of North Dakota

May 27, 2015

C.T. Marhula, Plaintiff and Appellant
v.
Grand Forks Curling Club, Inc., Defendant and Appellee

Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Jon J. Jensen, Judge.

David C. Thompson, Grand Forks, N.D., for plaintiff and appellant.

Theodore T. Sandberg, Grand Forks, N.D., for defendant and appellee.

Gerald W. VandeWalle, C.J., Carol Ronning Kapsner, Lisa Fair McEvers, Daniel J. Crothers. I concur in the result. Dale V. Sandstrom. Opinion of the Court by VandeWalle, Chief Justice.

OPINION

VandeWalle, Chief Justice.

[¶1] C.T. Marhula appealed from a judgment dismissing his action against Grand Forks Curling Club, Inc., for improper termination of his membership in the Club. Because we conclude the district court erred in determining the threshold membership requirements under N.D.C.C. § 10-33-81 of the Nonprofit Corporations Act applied to bar Marhula's action against the Club for violating his individual rights under N.D.C.C. § 10-33-62, we reverse

Page 504

and remand for the court to address the merits of Marhula's claim.

I

[¶2] Marhula was a member of the Club, a nonprofit corporation, from the mid-1990s until January 15, 2012, when the Club's board of directors, without prior notice, summarily terminated his membership and refunded his annual dues because the board " thought that C.T. was acting not in good faith with our club." The president of the Club during the relevant time frame explained:

We were in the process of trying to figure out how to raise money for a new curling club and had a lot of discussions with our members on how to go about it, different sites, different options, and C.T. was going to the city, to the park district, to the Blue Line Club board, talking to all these entities about the curling club, about its options, without any permission from the board to do such.

[¶3] Marhula sued the Club alleging improper termination of his membership under N.D.C.C. § 10-33-62 and seeking reinstatement, an order compelling the Club to document that its actions were erroneous, and damages. Following a bench trial, the district court granted the Club's motion to dismiss the action. The court concluded that Marhula could not maintain the action on his own because N.D.C.C. § 10-33-81 of the Nonprofit Corporations Act, relating to equitable remedies for members of a nonprofit corporation, required that the action be brought by the lesser of either 50 members with voting rights or 10 percent of the membership with voting rights in the Club. The court also dismissed Marhula's alternative common law claim of a due process violation because Marhula failed to demonstrate that he was deprived of a valuable right.

II

[¶4] Marhula argues the district court erred in dismissing the action because the threshold membership requirements of N.D.C.C. § 10-33-81 do not apply to this action asserting a violation of his ...


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