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In re Stueven Charitable Foundation

Supreme Court of Nebraska

September 27, 2019

IN RE THE STUEVEN CHARITABLE FOUNDATION, A NEBRASKA NONPROFIT CORPORATION.
v.
DELBERT STUEVEN, BY AND THROUGH SHELLEY STUEVEN MALLORY, HIS GUARDIAN AND CONSERVATOR, APPELLANT. THE STUEVEN CHARITABLE FOUNDATION AND KRISTY CAVANAUGH, APPELLEES,

         1. Statutes: Appeal and Error. Statutory interpretation presents a question of law, which an appellate court reviews independently of the lower court's determination.

          Appeal from the District Court for Hall County: Teresa K. Luther, Judge.

          Thomas A. Wagoner for appellant.

          John Matson, James Tews, and Matthew Maser, of Koley Jessen, PC, L.L.O., for appellees.

          Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

          FREUDENBERG, J.

         INTRODUCTION

         The district court for Hall County granted the petition of The Stueven Charitable Foundation (Foundation) seeking the appointment of four members to its board of directors. Delbert Stueven (Delbert)-by and through his guardian and conservator, Shelley Stueven Mallory (Shelley)-appeals. We vacate the district court's appointment of directors and remand the matter to the district court for further proceedings.

         [304 Neb. 141] BACKGROUND

         Delbert and his wife incorporated the Foundation in 1990 as a charitable nonprofit corporation. Delbert's wife has since passed away. The current directors of the Foundation are Delbert, president; Kristy Cavanaugh, secretary; and Robert Burkhardt, treasurer (incorrectly referred to as "Bernhardt" in some pleadings). Delbert has since been found incompetent. His daughter, Shelley, was appointed as his guardian and conservator.

         The Foundation and Cavanaugh filed a petition on September 18, 2018, seeking the appointment of additional directors. The Foundation's amended petition alleged that the Foundation failed to make the required 2016 calendar year donation to a qualified charity and that another distribution was due before the end of 2018. The Foundation further alleged that Cavanaugh had attempted to contact Burkhardt for the purpose of holding a meeting of the board of directors, but was unable to reach him. The Foundation alleged that because of Delbert's incapacity and Burkhardt's failure to respond, the board lacked a quorum to take any actions. As such, the Foundation sought an order from the district court appointing two new directors.

         Delbert, acting through Shelley, filed a motion on October 11, 2018, seeking the dismissal of "the action of. . . Cav[a]naugh." In that motion, Shelley objected to the appointment of further directors, arguing that there was no vacancy on the board.

         On October 29, 2018, Cavanaugh, acting in her capacity as a director of the Foundation, retained separate counsel and filed an answer and a cross-complaint that contained allegations similar to those made by the Foundation and sought essentially the same relief as the Foundation, except that Cavanaugh asked for the appointment of four, not two, additional directors.

         A hearing on this motion was held on October 30, 2018. There was no testimony at the hearing, and no evidence was offered. The articles of incorporation and certain amendments had been attached to the initial petition filed by the Foundation. And those same articles with some amendments, minutes from [304 Neb. 142] various board meetings, and the Foundation's bylaws were attached to Cavanaugh's answer and cross-complaint.

         On November 2, 2018, the district court granted the Foundation's petition in part and Cavanaugh's petition in its entirety, appointing four new directors to the board. Shelley, ...


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