The New Iberia Buddhist Temple v. Marn Sikang

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

18-261

THE NEW IBERIA BUDDHIST TEMPLE

VERSUS

MARN SIKANG, ET AL.

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APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF IBERIA, NO. 125816
HONORABLE LEWIS H. PITMAN, JR., DISTRICT JUDGE

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ELIZABETH A. PICKETT
JUDGE

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Court composed of John D. Saunders, Marc T. Amy, and Elizabeth A. Pickett,
Judges.

REVERSED AND REMANDED.

Roger P. Hamilton, Jr.
Attorney at Law
P. O. Box 12625
New Iberia, LA 70562-2625
(337) 519-7180
COUNSEL FOR PLAINTIFF-APPELLANT:
The New Iberia Buddhist Temple

Rusty L. Messer
Earl & Messer
9497 Brookline Ave.
Baton Rouge, LA 70809
(225) 687-1111
COUNSEL FOR PLAINTIFF-APPELLANT:
The New Iberia Buddhist Temple

Vivian Veron Neumann
Attorney at Law
405 W. Main St.
Lafayette, LA 70501
(337) 501-6782
COUNSEL FOR DEFENDANT-APPELLEE:
Marn Sikang
Bountheung Chnakonsy
Bounlrau Thanyavong

David Y. Lamm
Attorney at Law
P. O. Box 9710
New Iberia, LA 70562
(337) 321-6535
COUNSEL FOR DEFENDANT-APPELLEE:
Marn Sikang
Bountheung Chnakonsy
Bounlrau Thanyavong

Holden Hoggatt
Hoggatt Law Group, APLC
298 Louisiana Road
Franklin, LA 70538
(337) 368-6347
COUNSEL FOR DEFENDANT-APPELLEE:
Marn Sikang
Bountheung Chnakonsy
Bounlrau Thanyavong

PICKETT, Judge.

The appellant, The New Iberia Buddhist Temple (the Temple), appeals a

judgment of the trial court appointing a receiver to liquidate the assets of the

Temple and dissolving the non-profit corporation.

FACTS

On February 26, 2015, the Temple initiated this litigation by filing a Petition

for a Temporary Restraining Order against former members of the board of

directors of the Temple, Marn Sikang, Bountheng Chankensy, and Bounlrau

Thanyavong. The petition alleged that a new board of directors had been elected,

and these former directors had attempted to evict the current attendees of the

Temple by placing a notice of eviction on the door of the Temple. The petition

asked that the former directors be prohibited from being on the property of the

Temple. The trial court granted the temporary restraining order and set a hearing

for a preliminary injunction on March 31, 2015.

At the March 31, 2015 hearing, the parties stipulated that the defendants

would be permitted to worship at the Temple provided they do not disrupt the

services. Further, the parties agreed by the terms of the consent judgment to

submit the issues in this dispute to “binding mediation.” Finally, the parties agreed

that neither the monk nor any other party would alienate any of the assets of the

Temple pending the outcome of the mediation. A consent judgment with these

terms was signed by the trial court on May 18, 2015.

While mediation was pending, the Temple filed a Rule for Contempt and/or

Motion to Authorize the Board of Directors to Access the Bank Account and Other

Legal Documents on July 8, 2016. The Temple alleges that the defendants

changed the board of directors information with the Secretary of State and changed

the access of the Temple’s bank account so only the defendants had access. In

response to the Rule for Contempt, the defendants filed a Memorandum in

Opposition to Plaintiffs’ Contempt Rule, Petition for Declaratory Relief, and for

Hearing on Injunctive & Other Relief, wherein they asserted that the election by

which the officers purporting to represent the Temple were chosen was not held in

compliance with the Temple’s articles of incorporation. Thus, they argue that they

remain the duly elected officers of the Temple pending a valid election, and their

actions in securing the bank account and reporting the members of the board of

directors to the Secretary of State were valid exercises of their authority. They also

claim that the monk hired by the Temple sowed division among the members

before he fled to his home in Laos.

On March 14, 2017, the trial court, in response to the complaints by the

defendants that they could not freely enter the Temple, ordered all members of the

Temple, including the defendants, to be allowed free access to the Temple for

worship. The transcript of that hearing reflects that the mediation was

unsuccessful, and that the previous consent judgment was no longer in place. A

hearing was set for April 11, 2017. The trial court also denied the Rule for

Contempt at that time.

On April 19, 2017, the Temple filed a Peremptory Exception of No Right of

Action, claiming that the defendants were no longer members of the Temple and

therefore lack the procedural capacity to file a countersuit for declaratory relief.

The Temple further filed an Answer denying the central claims of the defendants’

petition for declaratory relief.

The trial court held a hearing on these matters on April 19, 2017. At the

outset of the hearing, the trial court elicited from counsel for the Temple the names

of the people acting as officers on behalf of the Temple. The trial court heard

testimony about the circumstances of the election in which these new directors
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were chosen and the acrimony among the current members of the Temple and the

defendants, who had been founding members of the Temple. Without specifically

concluding that the election by which the new officers were chosen was invalid,

the trial court dissolved the board of directors of the Temple and ordered a Special

Master appointed for the purpose of conducting an election in compliance with the

Temple’s articles of incorporation. He ordered the plaintiffs and the defendants to

submit a list of members of the Temple entitled to vote in an election and a slate of

candidates for the board of directors to the Special Master through their attorneys.

The new election was set for May 6, 2017. The trial court, calling his ruling an

interlocutory order, further stated that if this last attempt at settling the disputes

among the congregation failed, he would dissolve the Temple corporation and

distribute its assets to another charity.

On August 15, 2017, the trial court reconvened to consider this matter.

David Lamm, the Special Master appointed to conduct the election, testified that

the defendants sent notice that they did not intend to participate because they felt a

sense of hostility or inability for them to participate. The defendants did not

submit a list of members or a slate of nominations for officers. Pon Foreman, who

is aligned with the defendants in this suit, testified that their group did not

participate because they felt threatened by the behavior of the plaintiffs over the

last three years, and they already felt as though they lost. The plaintiffs stipulated

that the remaining defendants would offer the same testimony as Ms. Foreman.

In making its ruling, the trial court stated:

Ladies and gentlemen of the audience, I had hoped the
following of a new election, and election of officers could’ve put
aside the animosity that I knew existed back in April when I ordered
the election. I was wrong. It did not put aside animosity. I had hoped
it would had. I hoped giving you a new start could allow you to
continue to forward as a community and more importantly the
religious community in which you formed. I made a mistake. The
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election did not succeed in what I had hoped for. Consequently, and I
do this with a heavy heart, I’m going to reappoint Mr. David Lamm as
a special master in this case. I declare the New Iberia Buddhist
Temple, Incorporated and nonprofit corporation need to be placed in
liquidation and be liquidated accordingly by Mr. David Lamm at the
direction of the Court.

Pressed by the plaintiffs to rule on whether the election results were valid, the trial

court found that Mr. Lamm did conduct a valid election, but the “results were

tainted by the actions of others unbeknownst to Mr. Lamm[.]” The trial court

signed a judgment in conformity with his oral ruling on October 11, 2017. The

written judgment did not rule on the validity of the election, though it declared that

all motions and exceptions filed or heard in this matter are denied as moot.

The plaintiffs now appeal the judgment of the trial court

ASSIGNMENTS OF ERROR

The Temple asserts two assignments of error:

1. The trial court erred in finding that the Religious Nonprofit
Corporation should be dissolved without a petition to Dissolve being
filed or a prayer for the remedy being supported by the pleadings in
accordance with La.R.S. 12:143.

2. The trial court erred [in] failing to uphold the election results as
ordered by the trial court, and failing to rule on the No Right of
Action filed by the Temple.

DISCUSSION

The Temple’s first assignment of error is predicated on La.R.S. 12:143,

which was repealed by the legislature effective January 1, 2015. See La.Acts 2014,

No. 328, § 5. The law governing the dissolution of nonprofit corporations is found

at La.R.S. 12:249 et seq. Involuntary dissolution, as here, is governed by La.R.S.

12:251, which states, in pertinent part:

A. The court may entertain a proceeding for involuntary dissolution
under its supervision when it is made to appear that:

(1) The corporate assets are insufficient to pay all
just demands for which the corporation is liable, or to
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afford reasonable security to those who may deal with it;
or

(2) The objects of the corporation have wholly
failed, or are entirely abandoned, or their
accomplishment is impracticable; or

(3) It is beneficial to the interests of the members
that the corporation should be liquidated and dissolved;
or

(4) The directors are deadlocked in the
management of the corporate affairs, and the members
are unable to break the deadlock; or

(5) The members are deadlocked in voting power,
and have failed, for a period which includes at least two
consecutive annual meeting dates, to elect successors to
directors whose terms have expired or would have
expired upon the election of their successors; or

(6) The corporation has been guilty of gross and
persistent ultra vires acts; or

(7) Judgment has been entered annulling, vacating
or forfeiting the corporation’s articles and franchise in
accordance with the provisions of R.S. 12:262; or

(8) (a) A receiver has been appointed to take
charge of the corporation’s property, and either (b) there
is no reasonable prospect of return of control of the
corporation to its members within a reasonable time or
(c) the corporation is operating at a loss and there is no
reasonable prospect of restoring it to profitable operation
within a reasonable time.

B. An involuntary proceeding for dissolution may be instituted
against a corporation by either a member; or a creditor whose claim
has been reduced to judgment, on which execution has been issued
and returned “nulla bona”; or a receiver appointed to take charge of
the corporation’s property.

In this case, no member of the corporation has sought to institute dissolution

proceedings, there are no allegations of any creditors, and the Special Master is not

a receiver as set forth in La.R.S. 12:258-260. Thus, the trial court committed an

error of law in dissolving the corporation involuntarily on its own motion.

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The judgment of the trial court is reversed. The issues raised in the second

assignment of error were deemed moot by the trial court. We find these issues are

properly reserved for the trial court to rule on in the first instance on remand.

CONCLUSION

The judgment of the trial court is reversed, and the case is remanded for

further proceedings consistent with this opinion. Costs of this appeal are to be

divided equally between The Temple and the defendants.

REVERSED AND REMANDED.

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