Rainbow Mountain, Inc. v. Terry Begeman ( 2017 )


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  •    IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    RAINBOW MOUNTAIN, INC., a )
    Delaware corporation,     )
    )
    Plaintiff,            )
    ) C.A. No. 10221-VCMR
    v.                )
    )
    TERRY BEGEMAN,            )
    )
    Defendant.            )
    MEMORANDUM OPINION
    Date Submitted: December 23, 2016
    Date Decided: March 23, 2017
    Brian T.N. Jordan, JORDAN LAW, LLC, Wilmington, Delaware; Attorney for
    Plaintiff Rainbow Mountain, Inc.
    Terry Begeman, Montebello, Virginia; Pro se Defendant.
    MONTGOMERY-REEVES, Vice Chancellor.
    This action arises from a dispute among the members of Rainbow Mountain,
    Inc., a Delaware nonstock corporation, (“Rainbow Mountain”). Plaintiff Rainbow
    Mountain seeks a declaratory judgment that Defendant Terry Begeman was
    effectively removed as a director, officer, and member of the corporation and as a
    result has no right to occupy land owned by Rainbow Mountain.               Terry,1 as
    Counterclaim Plaintiff, seeks a declaratory judgment that he remains a member,
    director, and officer of Rainbow Mountain and is entitled to continue to occupy
    Rainbow Mountain’s land. Both parties in this case have moved for summary
    judgment and have stipulated to a decision on the paper record. I hold that Terry
    was not properly removed as a director in 2008 or as a member in 2009, but Terry
    was effectively removed as Secretary of Rainbow Mountain in 2009. As a member
    of Rainbow Mountain, Terry is entitled to continue to live on Rainbow Mountain’s
    real property under the Rainbow Mountain bylaws.
    I.    BACKGROUND
    The facts in this opinion derive from the documents that the parties have
    submitted with their pleadings and briefs in this case. Both parties have moved for
    summary judgment and have stipulated to a decision on the paper record.2
    1
    This memorandum opinion refers to the relevant individuals by first name because
    many of them share the same last names. No familiarity or disrespect is intended.
    2
    Letter from Brian Jordan, Esquire, to the Court, Rainbow Mountain, Inc. v.
    Begeman, C.A. No. 10221-VCMR (Del. Ch. Nov. 29, 2016).
    1
    A.    Parties
    Rainbow Mountain owns approximately 97 acres of land in Virginia.
    Sheridan and Barbara formed Rainbow Mountain, and they and their natural children
    were the original members of the corporation.
    Terry is one of Sheridan and Barbara’s six children. He currently lives in a
    cabin on the land owned by Rainbow Mountain. Before the events that gave rise to
    this litigation, Terry was a director, a member, a Senior Vice-President, and the
    Secretary of Rainbow Mountain.
    Mark Begeman, Laurie Larimar, Cindy Dallwig, Jeffrey Begeman, and Todd
    Begeman are Terry’s five siblings. Susan Begeman, Roger Dallwig, and Bonnie
    Begeman are Terry’s siblings-in-law. Jason Begeman, Melanie Ketchum, and Justin
    Begeman are Terry’s niece and nephews. Eric Ketchum is Melanie’s husband.
    B.    Facts
    1.      The Rainbow Mountain bylaws
    Both parties have submitted a set of bylaws of Rainbow Mountain that was
    originally adopted on February 10, 2003 (the “2003 Bylaws”).3 Plaintiff and
    3
    Pl.’s Mot. for Summ. J. Ex. A; First Am. Answer & Countercl. Ex. T.
    2
    Defendant also have submitted another version of the bylaws that first appears in the
    record in a 2005 Rainbow Mountain resolution (the “2005 Bylaws”).4
    On January 21, 2003, Thomas W. Aldous of the law firm Skeen & Zobrist
    sent Terry a letter attaching the 2003 Bylaws for him to send to the members of
    Rainbow Mountain.5 By February 10, 2003, six of the ten individuals thought to be
    members of Rainbow Mountain on that date6 had signed a written consent of
    members adopting the 2003 Bylaws.7
    On July 29, 2004, Judge J. Michael Gamble of the Twenty-Fourth Judicial
    Circuit of Virginia published an opinion in a case arising out of Sheridan’s attempt
    to transfer Rainbow Mountain’s real property to himself (the “Virginia Litigation”).8
    4
    Compl. Ex. A; First Am. Answer & Countercl. Ex. V. The version of the 2005
    Bylaws that Rainbow Mountain submitted as Exhibit A to the Complaint is
    formatted differently from the version of the 2005 Bylaws that Terry submitted as
    Exhibit V to the First Amended Answer and Counterclaim, but the substance is the
    same.
    5
    First Am. Answer & Countercl. Ex. T.
    6
    The written consent adopted on February 10, 2003, lists the current members of
    Rainbow Mountain as Sheridan, Jeffrey, Susan, Cindy, Roger, Todd, Bonnie,
    Laurie, Terry, and Mark. Jeffrey, Susan, Todd, Bonnie, Laurie, and Terry signed
    the written consent.
    7
    First Am. Answer & Countercl. Ex. U.
    8
    Terry seems to suggest that the Virginia court may not have had jurisdiction to
    decide the questions resolved in the July 29, 2004 opinion because in 2011, a
    Virginia court held that it did not have jurisdiction to decide the membership of
    Rainbow Mountain. In the interest of comity among the states and without full
    3
    Judge Gamble held that Rainbow Mountain had no written bylaws and rather had
    bylaws only by custom, acquiescence, and course of conduct. Judge Gamble found
    that the members acquiesced in a procedure under which Barbara made all decisions
    for the corporation and appointed directors, officers, and members. Further, Judge
    Gamble held that the members of Rainbow Mountain were Sheridan, Barbara, and
    their six children.9 Barbara passed away before the Virginia Litigation began,10 and
    Sheridan died during it.11 Thus, when Judge Gamble’s opinion was issued, the
    surviving members of Rainbow Mountain were Mark, Laurie, Cindy, Jeffrey, Todd,
    and Terry.
    On July 7, 2005,12 Laurie, Jeffrey, Todd, and Terry signed and delivered a
    written consent in lieu of an annual meeting of members, (1) recognizing the six
    members as determined by the July 29, 2004, Virginia court order, (2) electing as
    briefing on this issue, however, I consider the Virginia court’s July 29, 2004 opinion
    as preclusive on the issue of membership in Rainbow Mountain as of that date.
    9
    First Am. Answer & Countercl. Ex. K, at 3.
    10
    
    Id. 11 Oral
    Arg. Tr. 25.
    12
    Throughout this opinion, the dates on which written consents are found to be signed
    and delivered are the dates that the last signatory signed and delivered the written
    consent. All members signing written consents upon which this opinion relies
    signed and delivered within 60 days of the earliest dated consent that was delivered,
    as required by the Rainbow Mountain bylaws and the Delaware General
    Corporation Law. 
    8 Del. C
    . § 228(c); 2003 Bylaws art. III, ¶ 4.
    4
    directors Jeffrey, Susan, Jason, Melanie, Todd, Bonnie, Justin, Laurie, and Terry,
    and (3) adopting a set of bylaws.13 The July 7, 2005 written consent of members
    stated, in part, as follows:
    [T]he Bylaws for the regulation of the affairs of the
    Corporation, a copy of which is attached hereto as Exhibit
    F and incorporated herein by reference, are hereby
    approved and adopted and ordered to be filed in the minute
    book of the Corporation to be effective immediately, and
    all previous bylaws are hereby superceded [sic], effective
    immediately.14
    The record does not indicate which version of the bylaws was attached as “Exhibit
    F” to the July 7, 2005 written consent. Terry stated at oral argument that the 2003
    Bylaws have been the operative bylaws since they were ratified in the July 7, 2005
    written consent of members.15 Rainbow Mountain appears to agree because it cites
    to and includes as an exhibit to its opening summary judgment brief the 2003
    Bylaws.16 Rainbow Mountain does not offer any proof or argue that the 2005
    Bylaws were ratified in the July 7, 2005 written consent or were adopted at any time
    thereafter. Instead, Rainbow Mountain argues that “there is no material difference
    13
    First Am. Answer & Countercl. Ex. S.
    14
    
    Id. Ex. S,
    at 4.
    15
    Oral Arg. Tr. 46; see also First Am. Answer & Countercl. 85, Ex. T.
    16
    Pl.’s Mot. for Summ. J. Ex. A.
    5
    on the Articles in question between the 2003 and 2005 bylaws.” 17 Absent any
    evidence or argument in the record to rebut Terry’s assertion that the 2003 Bylaws
    remain the operative bylaws, I find that the 2003 Bylaws were ratified in the July 7,
    2005 written consent of members and have been the operative Rainbow Mountain
    bylaws since July 7, 2005.
    Under the 2003 Bylaws, Rainbow Mountain has three classes of members,
    each with different conditions of membership. The conditions of membership for
    Regular Members (also referred to as “Class A” members) are as follows:
    Any individual who is a descendant of both Sheridan
    Begeman and Barbara Begeman and who is age 35 or
    older is eligible to be a Regular Member. Any individual
    who is legally and lawfully wedded to a descendant of
    both Sheridan Begeman and Barbara Begeman, who is not
    legally separated from such descendant, and who is age 35
    or older is eligible to be a Regular Member. Any
    Associate Member who is 18 years of age or older and
    whose primary residence has been on the property of the
    Corporation for a period of six months immediately prior
    thereto is eligible to be a Regular Member.18
    The 2003 Bylaws further provide that “[a]ny individual eligible to be a Regular
    Member shall automatically become a Member of Class A upon delivery of a signed
    written notice to the Secretary of the Corporation . . . .”19 The conditions of
    17
    Pl.’s Reply Br. 2.
    18
    2003 Bylaws art. II, ¶ 1(A).
    19
    
    Id. art. II,
    ¶ 2(A).
    6
    membership for Associate Members (also referred to as “Class B” members) are as
    follows:
    Any individual who is a descendant of Sheridan Begeman
    and Barbara Begeman is eligible to be an Associate
    Member. Any individual who is legally and lawfully
    wedded to a descendant of both Sheridan Begeman and
    Barbara Begeman and who is not legally separated from
    such descendant is eligible to be an Associate Member.20
    The bylaws further provide that “[a]ny individual eligible to be an Associate
    Member shall automatically become a Member of Class B upon delivery of a signed
    written notice to the Secretary of the Corporation . . . .”21 Finally, “[a]ny individual
    is eligible to be an Honorary Member”22 (also referred to as a “Class C” member).
    In order to become an Honorary Member, an individual must:
    submit a written and signed application, on a form
    approved by the Board of Directors, to the Secretary of the
    Corporation. Such application shall be signed by two
    Members of any Class in good standing who support such
    individual’s election as an Honorary Member. Each
    application shall be considered by the Board of Directors
    at its next regular or special meeting and shall be approved
    or disapproved by 75% or more of the Board of Directors
    that attend such meeting so long as a quorum is present.23
    20
    
    Id. art. II,
    ¶ 1(B).
    21
    
    Id. art. II,
    ¶ 2(B).
    22
    
    Id. art. II,
    ¶ 1(C).
    23
    
    Id. art. II,
    ¶ 2(C).
    7
    Regular Members of Rainbow Mountain are entitled to “participate in and to
    vote at all meetings of Members.”24 Further, among other rights, they are entitled to
    “live on the grounds of Rainbow Mountain Incorporated with their spouse and
    children . . . .”25 Associate Members “shall have the same privileges as Regular
    Members, but shall not have the right to vote on matters presented for a vote at
    meetings of Members.”26 Honorary Members do not have voting rights or the right
    to live on the Rainbow Mountain property by default. But “[t]he Board of Directors
    may grant to any one or all of the Honorary Members such other duties and
    privileges, including voting privileges, as 75% or more of the Full Board of Directors
    may determine.”27 The record does not show whether anyone ever submitted a
    written notice to the Secretary of Rainbow Mountain as the bylaws require in order
    to become a member.
    Under paragraph 4 of article II of the 2003 Bylaws, Regular Members and
    Associate Members also have the right to request in writing from the board of
    directors an unassignable, irrevocable lifetime license to occupy no more than five
    24
    
    Id. art. II,
    ¶ 3(A).
    25
    Id.
    26
    
    Id. art. II,
    ¶ 3(B).
    27
    
    Id. art. II,
    ¶ 3(C).
    8
    acres of Rainbow Mountain land.28 Under the terms of such a license, a member
    would be entitled to exclude others from the designated portion of Rainbow
    Mountain’s land and make improvements on the land. The record does not indicate
    that any Rainbow Mountain members ever followed the article II, paragraph 4
    procedure to obtain such a license, and Terry argues that while licenses were never
    formally granted under the bylaws, they were informally granted.29 Regardless,
    certain Rainbow Mountain members did occupy parts of the Rainbow Mountain
    land.30
    The 2003 Bylaws provide for the removal of members as follows:
    Membership in the Corporation, and all rights and licenses
    incident thereto, may be terminated for cause. The Board
    of Directors shall hold a hearing and the Member shall be
    given no less than 5 days written notice of such hearing.
    The Board of Directors shall prescribe rules and
    procedures for the hearing consistent herewith. The
    Member shall have the opportunity to be heard at such
    meeting. The Member may be expelled only by a vote of
    expulsion by 2/3 or more of the Full Board of Directors.31
    The 2003 Bylaws also provide that directors may be removed with or without cause
    by a majority of the members.
    28
    
    Id. art. II,
    ¶ 4(B).
    29
    Additional Submission in Supp. of Def.’s Mot. for Summ. J. 22.
    30
    
    Id. at 23.
    31
    2003 Bylaws art. IX, ¶ 2.
    9
    Any or all of the directors may be removed with or without
    cause, at any time, by the majority vote of the Regular
    Members at a special meeting called for that purpose.
    Such removal may be accomplished with or without cause,
    but the director involved shall be given an opportunity to
    be present and to be heard at the meeting at which his or
    her removal is considered.32
    The 2003 Bylaws define “Cause” as follows:
    The term “Cause” shall mean a Member’s or director’s (i)
    continued participation in activity in material conflict with
    the Corporation’s interests but only after written notice to
    the Member or director from the Corporation and the
    Member’s or director’s failure to discontinue participation
    in activity in material conflict with the Corporation’s
    interests within 30 days after receipt of said notice; (ii)
    conviction of a felony; (iii) fraud, misrepresentation,
    embezzlement or similar acts of dishonesty; (iv) habitual
    drunkenness; (v) habitual use of prescription medication
    beyond that which is prescribed by Member’s or director’s
    physician or Member’s or director’s use of an illegal drug;
    (vi) intentional or willful misconduct that may subject the
    Corporation to criminal or civil liabilities; or (vii) willful
    violation of or substantial failure to comply with the
    Certificate of Incorporation, bylaws, or the duly
    promulgated rules and regulations of the Corporation
    respecting Membership rights and duties but only after
    written notice to the Member or director from the
    Corporation and the Member’s or director’s failure to
    correct said violation or failure within 30 days after receipt
    of said notice.33
    32
    
    Id. art. V,
    ¶ 14.
    33
    
    Id. art. X,
    ¶ 12(A).
    10
    In the case of a vacancy on the Rainbow Mountain board, the 2003 Bylaws
    provide as follows:
    Any vacancy occurring in the Board of Directors shall be
    filled by a majority of all of the remaining directors—
    though less than a quorum—or by a sole remaining
    director. A director appointed to fill a vacancy shall serve
    for the unexpired term of his or her predecessor in office.
    Notwithstanding the foregoing, the Members who are
    entitled to elect a director, who has vacated his or her
    position, may elect a successor to fill such vacancy for the
    unexpired term and such election shall take precedence
    over the appointment of a director by the Board of
    Directors. A reduction in the authorized number of
    directors shall not remove any director from office prior to
    the expiration of his or her term of office.34
    The 2003 Bylaws provide that the board of directors may appoint officers for
    Rainbow Mountain as follows:
    The officers . . . shall be a president, a secretary, and a
    treasurer. The Board of Directors may also choose one or
    more vice presidents (any one or more of whom may be
    designated executive vice president or senior vice
    president), one or more assistant secretaries and assistant
    treasurers, as well as other officers and agents, with such
    titles, duties, and powers as the Board of Directors may
    from time to time determine.35
    The 2003 Bylaws provide that only the board of directors may remove officers as
    follows:
    34
    
    Id. art. V,
    ¶ 6.
    35
    
    Id. art. VI,
    ¶ 1.
    11
    Each officer of the Corporation shall hold office until his
    or her successor is chosen and qualified or until he or she
    dies, resigns or is removed. Any officer may be removed
    at any time by the affirmative vote of a majority of the
    Board of Directors whenever in its judgment the best
    interests of the Corporation would be served thereby, but
    such removal shall be without prejudice to the contract
    rights, if any, of the officer so removed. Any vacancy
    occurring in any office of the Corporation shall be filled
    by the Board of Directors for the unexpired portion of the
    term. Only the Board of Directors may remove an officer
    from his or her office.36
    Finally, the 2003 Bylaws also establish a quorum for member meetings. The
    bylaws state that “[m]embers holding more than 50% of the votes that may be cast
    at any meeting shall constitute a quorum at a meeting of Members.”37
    2.       Removal of Mark and Cindy as members
    On September 21, 2005, the directors of Rainbow Mountain that were elected
    in the July 7, 2005 written consent signed a unanimous written consent terminating
    Mark and Cindy’s memberships38 in Rainbow Mountain without cause.39              The
    36
    
    Id. art. VI,
    ¶ 4.
    37
    
    Id. art. III,
    ¶ 5.
    38
    This opinion refers to memberships in Rainbow Mountain, Inc. But no inference
    should be drawn from those references that Rainbow Mountain is a nonprofit
    nonstock corporation. I need not and do not decide for purposes of this opinion
    whether Rainbow Mountain is a nonprofit nonstock corporation, which has
    memberships, or any other nonstock corporation, which has membership interests.
    See 
    8 Del. C
    . § 114.
    39
    First Am. Answer & Countercl. Ex. W.
    12
    written consent purported to remove Mark and Cindy as members without cause
    through the following resolutions:
    [A] motion is hereby brought before the Full Board of
    Directors to provoke [sic] Article IX(2) of the
    Corporation’s Bylaws in order to terminate the
    membership(s) of the following individuals:
    Mark Begeman
    Cindy Dallwig
    . . . Mark Begeman and Cindy Begeman [sic] have 30 days
    from [the date the written consent is delivered to the
    corporation’s secretary] . . . to permanently vacate the
    premises and all corporate property and to remove all their
    personal belongings thereof [sic].40
    A footnote in the September 21, 2005 written consent of directors quotes the bylaws
    of Rainbow Mountain as stating “[m]embership in the Corporation, and all rights
    and licenses incident thereto, may be terminated by the Board of Directors at any
    time without cause.”41       There is no evidence in the record, however, of an
    amendment to the bylaws to allow members to be removed without cause.42 The
    footnote in question merely quotes the 2005 Bylaws as if they have already been
    40
    
    Id. Ex. W,
    at 2-3.
    41
    
    Id. Ex. W,
    at 2 n.2.
    42
    Terry argues that a bylaw allowing members to be removed without cause is invalid.
    But because neither party argues that the 2005 Bylaws, which allow for members to
    be removed without cause, are operative, I need not and do not address the validity
    of any provision in the 2005 Bylaws.
    13
    adopted. As discussed above, absent any evidence or argument that bylaws other
    than the 2003 Bylaws should apply, I find that the 2003 Bylaws are the operative
    Rainbow Mountain bylaws, and footnote 2 in the September 21, 2005 written
    consent of directors misquotes the bylaws.
    The September 21, 2005 written consent also added five new Rainbow
    Mountain Regular Members. The written consent contained a resolution that:
    [H]aving qualified for membership, the following persons
    be, and hereby are, elected to serve as Class A Members
    of the Corporation:
    Susan Begeman
    Jason Begeman
    Melanie Ketchum
    Bonnie Begeman
    Justin Begeman43
    Terry challenges whether the Regular Members added in the September 21, 2005
    written consent had satisfied the conditions of membership to become Regular
    Members. But nothing in the record indicates that Susan, Jason, Melanie, Bonnie,
    or Justin received notice of this litigation, or were given an opportunity to defend
    their status as Rainbow Mountain members. Regardless, whether Susan, Jason,
    Melanie, Bonnie, and Justin are members of Rainbow Mountain does not affect the
    43
    First Am. Answer & Countercl. Ex. W, at 4.
    14
    outcome of this case. Thus, this Court expresses no opinion on whether Susan,
    Jason, Melanie, Bonnie, or Justin are Rainbow Mountain members. Instead, this
    opinion assumes that they are members and explains that the results of the relevant
    Regular Member votes would be the same regardless of whether Susan, Jason,
    Melanie, Bonnie, and Justin are actually Regular Members.
    On June 22, 2010, Cindy, her husband Roger, and Mark signed an affidavit
    that was submitted to the Nelson Circuit Court in Virginia presumably in connection
    with litigation in that court, declaring that “should Rainbow Mountain Incorporated
    still qualify as a non-profit corporation set up to do business in the Commonwealth
    of Virginia; let the record show that Cindy Dallwig, Roger Dallwig, and Mark
    Begeman, wish the court to recognize their ongoing interest in membership of said
    corporation.”44 No evidence suggests that Cindy, Roger, or Mark have disavowed
    this affidavit since 2010.
    3.     Removal of Terry as a director, officer, and member
    Since 2005, relations among the members of Rainbow Mountain have soured,
    and on November 15, 2008, at a Rainbow Mountain members meeting, the Regular
    Members voted to remove Terry from the Rainbow Mountain board of directors
    44
    Def.’s Letter to the Ct. Ex. CC, Rainbow Mountain, Inc. v. Begeman, C.A. No.
    10221-VCMR (Del. Ch. Oct. 18, 2016).
    15
    without cause.45 The meeting minutes list nine Regular Members: Laurie, Jeffrey,
    Susan, Jason, Melanie, Terry, Todd, Bonnie, and Justin. Only Laurie, Jeffrey, Susan,
    Jason, and Melanie were present, and they all voted to remove Terry from the
    board.46 The members present at the November 15, 2008 meeting also purported to
    amend portions of the Rainbow Mountain bylaws.
    On April 29, 2009, at 7:34 p.m., the members of Rainbow Mountain held
    another meeting at which the Regular Members voted to elect Eric to fill the vacancy
    left by Terry’s removal from the board.47 The members present at that meeting were
    the same members present at the November 15, 2008 meeting—namely, Laurie,
    Jeffrey, Susan, Jason, and Melanie—plus Eric. The record does not reflect when or
    if Eric became a member of Rainbow Mountain. At the 7:34 p.m. meeting, Laurie,
    Jeffrey, Susan, Jason, and Melanie voted to elect Eric to fill the vacancy on the board.
    Eric did not vote.
    Immediately after the members meeting, the purported Rainbow Mountain
    directors met on April 29, 2009, at 8:00 p.m.48 The 8:00 p.m. meeting minutes list
    Susan, Jeffrey, Laurie, Jason, Melanie, and Eric as present at the meeting. Three
    45
    Pl.’s Mot. for Summ. J. Ex. C.
    46
    
    Id. 47 Id.
    Ex. G.
    48
    
    Id. Ex. H.
    16
    directors—Todd, Bonnie, and Justin—were listed as not present. The purported
    directors who were present all voted to remove Terry as a member of Rainbow
    Mountain without cause.49 The minutes show that the vote terminated Terry’s
    membership because six of the nine directors voted in favor of termination, which
    satisfied the requirement in the bylaws that 2/3 of the full board vote to remove a
    member. At the same meeting, the same six purported directors that voted to
    terminate Terry’s membership—namely, Susan, Jeffrey, Laurie, Jason, Melanie, and
    Eric—voted to appoint Laurie as the new Secretary of Rainbow Mountain.50
    On May 1, 2009, the board sent a letter to Terry notifying him that his
    membership in Rainbow Mountain had been terminated.51 In the letter, the board
    stated that “the affirmative vote of of [sic] the majority of the Full Board of Directors
    was reached to terminate your membership with Rainbow Mountain Incorporated
    without cause” and that “termination of your membership automatically terminates
    your positions as Senior Vice-president [sic] and Secretary of the Corporation, as
    well.”52
    49
    
    Id. 50 Id.
    51
    Compl. Ex. D.
    52
    
    Id. 17 C.
         This Litigation
    Rainbow Mountain filed this declaratory judgment action, seeking a
    determination that Terry was properly removed as a director, officer, and member
    of Rainbow Mountain and that, as a result, Terry is not entitled to occupy a cabin on
    Rainbow Mountain’s property. On November 19, 2014, Terry filed an answer and
    counterclaim asserting that because Mark and Cindy were never properly removed
    as members, the members’ removal of Terry as a director, their appointment of Eric
    to the board, and the board’s removal of Terry as a member were invalid corporate
    actions.     Terry’s initial answer and counterclaim also alleged two other
    counterclaims (1) challenging the transfer of the 97 acres of land to Rainbow
    Mountain as void and (2) seeking the revocation of the Rainbow Mountain certificate
    of incorporation.     Vice Chancellor Parsons dismissed the two additional
    counterclaims on August 4, 2015 and allowed only the membership dispute to move
    forward.53
    On September 25, 2015, Terry filed his First Amended Answer and
    Counterclaim (“Amended Counterclaim”), which also seeks a declaratory judgment
    as to the proper membership of Rainbow Mountain. The Amended Counterclaim
    53
    Rainbow Mountain Inc. v. Begeman, C.A. No. 10221-VCMR (Del. Ch. Aug. 4,
    2015) (TRANSCRIPT). At the oral argument before Vice Chancellor Parsons,
    Terry agreed to dismissal of the two dismissed counterclaims, leaving only the
    membership dispute.
    18
    also requests equitable corrections to the Rainbow Mountain certificate of
    incorporation in recognition of the fact that Rainbow Mountain does not operate as
    a charitable nonstock corporation despite a requirement in its certificate of
    incorporation that it do so.
    Rainbow Mountain moved for summary judgment on March 3, 2016. On
    April 5, 2016, Terry opposed Rainbow Mountain’s motion and himself moved for
    summary judgment. Terry appears to have abandoned his counterclaim for Court-
    ordered corrections to the Rainbow Mountain certificate of incorporation because
    his briefing on the motions for summary judgment focuses only on the question of
    whether Terry remains a member, director, and officer of Rainbow Mountain.54 This
    opinion, therefore, does not address Terry’s claim for corrections to the Rainbow
    Mountain certificate of incorporation.
    On June 30, 2016, Rainbow Mountain filed a reply brief in support of its
    motion for summary judgment and an opposition to Terry’s motion. Terry filed a
    reply brief on July 25, 2016, and the Court heard oral argument on the cross motions
    for summary judgment on October 11, 2016. Rainbow Mountain filed a letter on
    November 29, 2016, indicating that the parties stipulated to a decision on the paper
    54
    Def.’s Mot. for Summ. J. 6; Def.’s Reply to Pl.’s Mot. for Summ. J. 12, 53.
    19
    record. Terry filed a supplemental brief on December 13, 2016, and Rainbow
    Mountain filed a response to that brief on December 23, 2016.
    II.   ANALYSIS
    Generally, the Court may grant a motion for summary judgment where there
    exists “no genuine issue as to any material fact and . . . the moving party is entitled
    to a judgment as a matter of law.”55 But “[w]here the parties have submitted cross-
    motions for summary judgment on a stipulated record, as the parties here have done,
    I may treat the matter as submitted for a decision on the merits.”56
    A.     Members Cannot Be Removed Without Cause Under the 2003
    Bylaws of Rainbow Mountain
    “[T]he construction and interpretation of an unambiguous written contract is
    an issue of law within the province of the court.”57 “Corporate charters and bylaws
    are contracts among a corporation’s shareholders.”58 “[T]he rules that govern the
    interpretation of statutes, contracts, and other written instruments apply to the
    55
    Ct. Ch. R. 56(c).
    56
    Farmers for Fairness v. Kent Cty. Levy Ct., 
    2013 WL 3333039
    , at *3 (Del. Ch. July
    1, 2013); see also Ct. Ch. R. 56(h).
    57
    Bank of N.Y. Mellon v. Realogy Corp., 
    979 A.2d 1113
    , 1120 (Del. Ch. 2008)
    (quoting Law Debenture Trust Co. of N.Y. v. Petrohawk Energy Corp., 
    2007 WL 2248150
    , at *5 (Del. Ch. Aug. 1, 2007)).
    58
    Strougo v. Hollander, 
    111 A.3d 590
    , 597 (Del. Ch. 2015) (quoting Airgas, Inc. v.
    Air Prods. & Chems., Inc., 
    8 A.3d 1182
    , 1188 (Del. 2010)) (internal quotation marks
    omitted).
    20
    interpretation of corporate charters and bylaws.”59 And bylaws should be interpreted
    in such a way as to not render any of their provisions meaningless.
    Given that the 2003 Bylaws were ratified in the July 7, 2005 written consent
    of members, they were the operative bylaws when Mark and Cindy were removed
    as members on September 21, 2005. In relevant part, the 2003 Bylaws state that
    “[m]embership in the Corporation, and all rights and licenses incident thereto, may
    be terminated for cause.”60 The bylaws also contain a detailed definition of “Cause,”
    enumerating seven acts that constitute “Cause.”61
    The parties in this case do not argue that the 2003 Bylaws are ambiguous as
    to whether members may be removed without cause. While “for cause” is not
    capitalized in article IX, paragraph 2, the parties present no argument that “for cause”
    does not refer to the defined term “Cause” in article X, paragraph 12(A). And the
    capitalized term “Cause” appears in the Rainbow Mountain bylaws only in the
    defined terms article. The explicit references to “Members” in the detailed definition
    of “Cause” and the seven enumerated instances of “Cause” would be meaningless if
    “for cause” did not refer to the defined term “Cause.” Thus, article IX of the 2003
    59
    
    Id. (quoting Sassano
    v. CIBC World Mkts. Corp., 
    948 A.2d 453
    , 462 (Del. Ch.
    2008)) (internal quotation marks omitted).
    60
    2003 Bylaws art. IX, ¶ 2.
    61
    
    Id. art. X,
    ¶ 12(A).
    21
    Bylaws requires that “Cause,” as defined in article X, paragraph 12(A), exist to
    terminate a membership in Rainbow Mountain. Moreover, the result is the same
    even if “Cause” does not apply to article IX, paragraph 2 because the provision only
    allows termination of membership “for cause.” The plain meaning of “for cause” is
    that some cause is required before the action in question may be taken. In other
    words, “for cause” means not without cause.
    B.     Mark and Cindy Were Not Properly Removed as Members of
    Rainbow Mountain
    The September 21, 2005 written consent of directors did not properly
    terminate Mark and Cindy’s memberships in Rainbow Mountain because the
    resolution is contrary to the 2003 Bylaws. Article IX, paragraph 2 of the 2003
    Bylaws provides that membership in Rainbow Mountain “may be terminated for
    cause.”62 The 2003 Bylaws list seven activities that constitute “Cause” for a member
    or director.63 Article IX, paragraph 2 further requires that the board “hold a hearing
    and the Member shall be given no less than 5 days written notice of such hearing.
    62
    
    Id. art. IX,
    ¶ 2.
    63
    
    Id. art. X,
    ¶ 12(A).
    22
    The Member shall have the opportunity to be heard at such meeting.”64 And a 2/3
    vote of the board of directors is required to expel a member.65
    The evidence shows that Mark and Cindy were removed without cause in
    violation of the 2003 Bylaws. The September 21, 2005 written consent incorrectly
    quotes the bylaws as stating that “[m]embership in the Corporation, and all rights
    and licenses incident thereto, may be terminated by the Board of Directors at any
    time without cause.”66 Further, no evidence in the record suggests that Mark or
    Cindy had satisfied any of the seven enumerated definitions of “Cause,” and
    Rainbow Mountain does not argue that Mark and Cindy were terminated “for cause.”
    Additionally, no evidence shows that Mark and Cindy had notice of their
    proposed removal as members or the opportunity to be heard to which they were
    entitled under article IX of the bylaws. The September 21, 2005 written consent
    states that “for the purpose of this special meeting ‘notice’ is given when the written
    consent in league with today’s proceeding is deposited (‘delivery’) in the United
    States mail, postage prepaid, directed to the member at such and such member’s
    address as it appears on the records of the corporation.”67 But the written consent
    64
    
    Id. art. IX,
    ¶ 2.
    65
    
    Id. 66 First
    Am. Answer & Countercl. Ex. W, at 2 n.2.
    67
    
    Id. Ex. W,
    at 3.
    23
    does not state that it will be mailed, and the record contains no evidence showing
    that it ever was mailed to Mark or Cindy. The board’s attempt to terminate Mark
    and Cindy as members of Rainbow Mountain, therefore, was not effective.
    C.     Terry Is Not Estopped from Arguing that Mark and Cindy Were
    Improperly Removed as Members
    Rainbow Mountain asserted at oral argument and in its briefing that Terry is
    estopped from arguing that Mark and Cindy were never properly terminated as
    members because he proposed their termination and signed the September 21, 2005
    written consent as a director.68 Estoppel is an equitable defense that “may be
    invoked ‘when a party by his conduct intentionally or unintentionally leads another,
    in reliance upon that conduct, to change position to his detriment.’”69 Estoppel is a
    valid defense to voidable corporate actions but not to void corporate actions.70 It is
    well settled in Delaware that the “essential distinction between voidable and void
    acts is that the former are those which may be found to have been performed in the
    68
    Oral Arg. Tr. 63.
    69
    Waggoner v. Laster, 
    581 A.2d 1127
    , 1136 (Del. 1990) (quoting Wilson v. Am. Ins.
    Co., 
    209 A.2d 902
    , 903-04 (Del. 1965)).
    70
    
    Id. at 1137
    (“Estoppel, however, has no application in cases where the corporation
    lacks the inherent power to issue certain stock or where the corporate contract or
    action approved by the directors or stockholders is illegal or void.”).
    24
    interest of the corporation but beyond the authority of management, as distinguished
    from acts which are [u]ltra vires, fraudulent or gifts or waste of corporate assets.”71
    This Court in Klaassen v. Allegro Development Corp. analyzed several cases
    dealing with a corporation’s failure to give notice of a directors’ meeting and
    concluded that:
    Delaware law distinguishes between (i) a failure to give
    notice of a board meeting in the specific manner required
    by the bylaws and (ii) a contention that the lack of notice
    was inequitable. In the former scenario, board action
    taken at the meeting is void. In the latter scenario, board
    action is voidable in equity, so equitable defenses apply.72
    The Court also observed that “traditionally, when a board took action in
    contravention of a mandatory bylaw, the board action was treated as void.”73 The
    Court recognized that “the case law in this area has not always been consistent, and
    some cases apply equitable defenses even if a bylaw was violated.”74 But the rule
    in Klaassen “is the best I can do to harmonize the decisions into a workable rule. It
    71
    Michelson v. Duncan, 
    407 A.2d 211
    , 218-19 (Del. 1979).
    72
    Klaassen v. Allegro Dev. Corp., 
    2013 WL 5739680
    , at *19 (Del. Ch. Oct. 11, 2013).
    73
    
    Id. The Supreme
    Court in affirming the Court of Chancery’s decision declined to
    approve or disapprove of the rule that the Court of Chancery gleaned from the
    precedent because it was not necessary to its decision. Klaassen v. Allegro Dev.
    Corp., 
    106 A.3d 1035
    , 1046 n.75 (Del. 2014).
    74
    Klaassen, 
    2013 WL 5739680
    , at *24 n.10.
    25
    necessarily represents one trial judge’s effort and may not accurately reflect
    Delaware law.”75 I agree and follow that logic here.
    The Rainbow Mountain board’s removal of Mark and Cindy as members of
    the corporation without cause was in contravention of the Rainbow Mountain
    bylaws. Thus, Terry is not estopped from arguing that Mark and Cindy were
    improperly removed as members even though he participated in their removal.
    Because Mark and Cindy were not properly removed as members, Rainbow
    Mountain has operated with an incorrect understanding of who its members are since
    September 21, 2005.
    D.    Terry Was Not Properly Removed as a Director of Rainbow
    Mountain
    On November 15, 2008, certain Rainbow Mountain members purported to
    remove Terry as a director and amend the bylaws, but their attempt was not effective
    because the meeting of members lacked a quorum. At that meeting, five Rainbow
    Mountain members—Laurie, Jeffrey, Susan, Jason, and Melanie—were present and
    voted in favor of removing Terry from the board of directors. The meeting minutes
    list four members—Terry, Todd, Bonnie, and Justin—as not present.76 When Mark
    and Cindy are counted as members, however, six of the eleven total members were
    75
    
    Id. 76 Pl.’s
    Mot. for Summ. J. Ex. C.
    26
    not present.77 Under the Rainbow Mountain bylaws, members holding more than
    50% of the votes entitled to be cast must be present in order to have a quorum at a
    meeting of members.78 As a result, the members could not act at such a meeting,
    and Terry was not properly removed as a director of Rainbow Mountain.
    Additionally, the purported bylaw amendments were not effective, and the 2003
    Bylaws remain the operative bylaws of Rainbow Mountain.
    E.     Eric Was Not Properly Appointed to the Board of Directors
    On April 29, 2009 at 7:34 p.m., six of the members of Rainbow Mountain
    held a meeting at which they purported to elect Eric to fill the vacancy on the board
    of directors that would have been left if Terry had been properly removed. The
    members’ actions at the 7:34 p.m. meeting were not effective. As an initial matter,
    there was no vacancy on the Rainbow Mountain board because, as discussed above,
    Terry was not properly removed from the board. The 2003 Bylaws state that “[t]he
    number of directors that shall constitute the Full Board of Directors shall be nine
    (9).”79 The record contains no evidence of an amendment to the bylaws expanding
    77
    If Terry is correct that Susan, Jason, Melanie, Bonnie, and Justin are not Regular
    Members of Rainbow Mountain, then Rainbow Mountain had only six Regular
    Members on November 15, 2008, namely Jeffrey, Laurie, Terry, Todd, Cindy, and
    Mark. Of those six, only two—Laurie and Jeffrey—were present at the meeting,
    which also fails to reach a quorum.
    78
    2003 Bylaws art. III, ¶ 5.
    79
    
    Id. art. V,
    ¶ 2.
    27
    the size of the board. And the minutes of the 7:34 p.m. meeting clearly indicate that
    the meeting participants believed they were filling a vacancy rather than adding a
    new director position. The minutes state that “Eric Ketchum has been appointed to
    fill the current vacancy on the Board of Directors until the next election of directors
    takes place . . . .”80 Eric was not properly appointed because the Rainbow Mountain
    board had no vacancy.
    Even if the members could have filled a vacancy on the board, however, there
    was not a quorum at the 7:34 p.m. meeting. The 7:34 p.m. meeting minutes list six
    members in attendance—Laurie, Jeffrey, Susan, Jason, Melanie, and Eric.81 It is
    unclear when or if Eric became a member of Rainbow Mountain, but even assuming
    he properly was made a member of the corporation, six members do not represent
    the required “[m]embers holding more than 50% of the votes that may be cast” for
    a quorum.82 When Mark, Cindy, and Eric are counted, Rainbow Mountain has
    twelve members—namely Mark, Laurie, Cindy, Jeffrey, Todd, Terry, Susan, Jason,
    Melanie, Bonnie, Justin, and Eric.83 Six members hold exactly 50% of the votes that
    80
    Pl.’s Mot. for Summ. J. Ex. G.
    81
    
    Id. 82 2003
    Bylaws art. III, ¶ 5.
    83
    At oral argument, Terry also stated that Roger should have been considered a
    member of Rainbow Mountain. The evidence in the record, however, does not
    explain when or if Roger became a member of Rainbow Mountain.
    28
    may be cast and thus fall short of “more than 50%.”84 The members’ attempt to
    appoint Eric to the Rainbow Mountain board thus was not effective because, absent
    a quorum, a proper meeting of the members was not held.
    F.     Terry Was Not Properly Removed as a Member of Rainbow
    Mountain
    Because the members’ attempt to appoint Eric to the Rainbow Mountain board
    was ineffective, the board was composed of Susan, Jeffrey, Laurie, Jason, Melanie,
    Todd, Bonnie, Justin, and Terry at the April 29, 2009, 8:00 p.m. meeting of directors.
    The improperly constituted board’s attempt to remove Terry as a member of
    Rainbow Mountain at the 8:00 p.m. meeting thus was ineffective.85 When Eric’s
    vote is not counted, only five of the nine directors on the board voted to remove
    Terry as a member. That vote fails to reach the 2/3 of the directors required to
    remove a member under the Rainbow Mountain bylaws.86 Terry, thus, was not
    effectively removed as a member and remains a member of Rainbow Mountain.
    84
    2003 Bylaws art. III, ¶ 5. If Terry is correct that Eric, Susan, Jason, Melanie,
    Bonnie, and Justin are not Regular Members of Rainbow Mountain, then the only
    Regular Members present at the 7:34 p.m. meeting were Laurie and Jeffrey—only
    two of the six Rainbow Mountain members. A quorum would still not have been
    satisfied.
    85
    Terry received notice of the April 29, 2009, 8:00 p.m. meeting of directors. Pl.’s
    Mot. for Summ. J. Ex. B (certified mail receipts).
    86
    2003 Bylaws art. IX, ¶ 2 (“The Member may be expelled only by a vote of expulsion
    by 2/3 or more of the Full Board of Directors.”).
    29
    G.     Terry Was Properly Removed as Secretary But Not as Senior
    Vice-President of Rainbow Mountain
    Terry’s term as Secretary ends under the Rainbow Mountain bylaws upon his
    death, resignation, removal, or replacement when his successor is chosen and
    qualified.87 Terry has litigated this case on his own behalf and appeared at oral
    argument. He clearly has not died. No evidence suggests that he resigned as
    Secretary. And he seeks a declaration from this Court that he remains the Secretary
    of Rainbow Mountain, which is inconsistent with his resignation. Further, no board
    resolution or written consent of directors in the record explicitly removed Terry as
    the Secretary of Rainbow Mountain, and under the bylaws “[o]nly the Board of
    Directors may remove an officer from his or her office.”88
    Terry’s term as Secretary ended, however, when the board appointed Laurie
    to fill the Secretary position. Under the 2003 Bylaws, “[e]ach officer of the
    Corporation shall hold office until his or her successor is chosen and qualified or
    until he or she dies, resigns or is removed.”89 And a majority of the directors present
    at a meeting of the board where a quorum is present can appoint a Rainbow Mountain
    87
    
    Id. art. VI,
    ¶ 4.
    88
    
    Id. 89 Id.
    30
    officer.90 For a directors’ meeting, “a majority of the directors in office immediately
    before the meeting begins shall constitute a quorum for the transaction of business .
    . . .”91 At the 8:00 p.m. meeting, five of the nine directors—namely, Laurie, Jeffrey,
    Susan, Jason, and Melanie—were present, constituting a quorum. The same five
    directors also voted to appoint Laurie to the position of Secretary at that meeting.92
    Because Laurie was properly chosen as Secretary of Rainbow Mountain, Terry’s
    term as Secretary ended at the 8:00 p.m. meeting on April 29, 2009.93
    Rainbow Mountain has failed to adduce any evidence that Terry was removed
    from his position as Senior Vice-President. The notice that the Rainbow Mountain
    board sent to Terry on May 1, 2009 states that “termination of your membership
    automatically terminates your positions as Senior Vice-president [sic] and Secretary
    of the Corporation, as well.”94 But neither the termination letter nor Rainbow
    Mountain’s briefing points to any bylaw that automatically terminates a member’s
    officer positions when his or her membership is terminated. And even if a Rainbow
    Mountain officer is automatically removed when he or she is removed as a member,
    90
    
    Id. art. VI,
    ¶ 1, art. V, ¶ 9.
    91
    
    Id. art. V,
    ¶ 9.
    92
    Pl.’s Mot. for Summ. J. Ex. H.
    93
    As discussed above, Terry received notice of the 8:00 p.m. meeting. See supra note
    85.
    94
    Compl. Ex. D.
    31
    Terry was not properly removed as a member, as discussed above. Absent evidence
    of board action removing Terry as a Senior Vice-President or appointing his
    successor, this Court cannot hold that Terry was removed as a Senior Vice-President
    of Rainbow Mountain.
    H.     Terry’s Right to Live on the Rainbow Mountain Real Estate as a
    Regular Member Remains
    Under article II, paragraph 3(A) of the 2003 Bylaws, all Regular Members
    have the right to “live on the grounds of Rainbow Mountain Incorporated with their
    spouse and children . . . .”95 Because Terry is a Regular Member of Rainbow
    Mountain, Terry may live on the Rainbow Mountain real estate. I do not opine on
    the full scope of Terry’s rights to live on the Rainbow Mountain property because
    (1) the parties have not fully briefed or submitted evidence regarding the
    interpretation of article II, paragraph 3(A) of the 2003 Bylaws and (2) Terry admits
    that he did not formally request a license through article II, paragraph 4 of the 2003
    Bylaws.96
    III.   CONCLUSION
    For the reasons stated herein, the 2003 Bylaws are the operative bylaws of
    Rainbow Mountain; Terry remains a Regular Member of Rainbow Mountain; and,
    95
    2003 Bylaws art. II, ¶ 3(A).
    96
    Additional Submission in Supp. of Def.’s Mot. for Summ. J. 22.
    32
    the current board of directors of Rainbow Mountain is composed of Susan, Jeffrey,
    Laurie, Jason, Melanie, Todd, Bonnie, Justin, and Terry. As a Regular Member,
    Terry has the right to live on the Rainbow Mountain property. Terry is no longer
    the Secretary of Rainbow Mountain, but he remains a Senior Vice-President. This
    Court expresses no opinion on the membership status of any person other than Mark,
    Cindy, and Terry.
    IT IS SO ORDERED.
    33