Last week, the Seventh Circuit Court of Appeals decided Doermer v. Callen, No. 15-3734 (7th Cir. Feb. 1, 2017), a case that illustrates and implicates several important aspects of Indiana nonprofit corporation law. Over the next few posts, we’ll explore some of the key aspects of the case and what it has to say about Indiana nonprofit law. First up: the board of directors and directors’ terms.
At the center of the case is the Doermer Family Foundation, Inc., a nonprofit corporation formed under the Indiana Nonprofit Corporation Act of 1991 (the “Act”). The initial board of directors consisted of a father; a mother; their son, Richard Doermer; and daughter, Kathryn Callen. Each initial director had a lifetime appointment.
Mother died in 2000. In 2010, Phyllis Alberts was elected to the board of directors for a three-year term expiring in January 2013. Later in 2010, Father died, leaving the board with three directors: Richard, Kathryn, and Phyllis. In September 2013, over Richard’s objection, Kathryn and Phyllis voted to reelect Phyllis for a second term. The board then took several actions that Richard opposed, including making gifts to the University of Saint Francis of Fort Wayne, Indiana, Inc. (Kathryn sat on their board of directors), and electing Kathryn’s son, John, to the board.