JEFFERSON CITY, Mo. (ABP) — A Missouri judge has given an initial legal victory to one of the institutions locked in a messy legal spat with the Missouri Baptist Convention.
Cole County Circuit Court Judge Thomas Brown ruled Nov. 10 that the state convention is not the “sole member” of the Missouri Baptist University corporation. The ruling dismisses the MBC's contention that it is the university's sole member, which would have meant that only the convention has the authority to change the university's corporate charter.
In 2001, four MBC-related institutions — the university, the Word & Way newspaper, the Missouri Baptist Foundation and Windermere Baptist Conference Center — changed their charters to allow each entity to elect its own trustees rather than to allow the convention to elect them. Trustees for The Baptist Home — a convention-related retirement-home system — had taken similar action a year earlier.
The trustee boards' moves to become self-perpetuating came after a lengthy battle by fundamentalists to take control of the convention's governing structures. They had largely won that battle by 2001 — and attempted to fill open spots on the agencies' boards with like-minded conservatives.
The convention then filed a lawsuit against the five institutions to force the entities to rescind the new charters.
MBU attorneys filed a summary judgment motion asking the judge to determine whether the convention is a corporate member, as the convention had claimed. According to Foundation legal council Larry Tucker, the other entities also have filed motions for judgments on member status. Those cases will most likely be argued sometime early next year.
Tucker noted that Judge Brown ruled that the convention did not become a member of the university's corporation simply because it traditionally had elected or appointed MBU's trustees.
“[This ruling] is good news for the college and for all the others,” Tucker said.
MBU attorney Clyde Farris argued that the university changed its charter in 1997 to reflect changes in Missouri's not-for-profit laws made in 1995. The MBU charter noted that the corporation would have no members.
“They [university officials] sent it to the convention and they [convention officials] knew it,” Farris said, noting that the inter-agency relations committee and convention messengers also approved the 1997 charter. “The convention by its action has waived its right to come back and claim it is a member,” he said.
Lead MBC attorney Mike Whitehead contended that under the statutory definition of election, the convention should be considered a corporate member. He noted that members of a for-profit company are protected by stock shares, while members of a not-for-profit agency are protected by governance.
“The legislature says that people who have the right to vote should be called members,” Whitehead said. “If someone else [other than the institution] has the ability to appoint directors, then the rights of that someone, even if it is an entity, must be protected.”
Whitehead added that the convention has “a right to control the governance” because it “birthed and founded the entity.”
He contended that MBU president Alton Lacey changed wording in the institution's charter to read that the convention elects MBU trustees rather than appoints them. Whitehead said the relationship between the two entities remained the same. The change “doesn't amount to a relinquishment of the known right to choose the trustees,” he said. “The process did not change until the college made a unilateral decision in 2001. It's the 'gotcha' that lets them walk away with a multimillion-dollar entity.”
Farris responded that the university has never been a convention asset. “It has never been on their financial statements,” he said.
The attorney acknowledged that the convention helped start the university, but that the MBC never owned it. The convention could have owned MBU, but “they didn't want to because they didn't want to accept the liability responsibility,” Farris said.
He asked the judge to consider all the law's provisions. “The real relationship is one of covenant relationship,” he said. The college agreed to certain conditions in return for funding. “But [funding] does not allow them [the MBC] to control it and [the convention] is not a member.”