Involuntary Termination of Membership; Procedures; Statute of Limitations for Challenging Involuntary Termination; Liability for Dues, Assessments, or Fees

1. Law
2. Georgia Code
3. Corporations, Partnerships, and Associations
4. Nonprofit Corporations
5. Membership
6. Termination of Membership
7. Involuntary Termination of Membership; Procedures; Statute of Limitations for Challenging Involuntary Termination; Liability for Dues, Assessments, or Fees

Unless otherwise expressly provided in a corporation's articles of incorporation or bylaws or, in the case of a corporation in existence before July 1, 1991, by resolution of the directors or members adopted before that date:

1. No member of a corporation may be expelled or suspended, and no membership or memberships in such corporations may be terminated or suspended except pursuant to a procedure that is fair and reasonable and is carried out in good faith;
2. A procedure is fair and reasonable when either:
   1. The articles or bylaws set forth a procedure that provides:
      1. Not less than 15 days' prior written notice of the expulsion, suspension, or termination and the reasons therefor; and
      2. An opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion, suspension, or termination by a person or persons authorized to decide that the proposed expulsion, termination, or suspension not take place; or
   2. It is fair and reasonable taking into consideration all of the relevant facts and circumstances;
3. Any written notice given by mail must be given by first-class or certified mail or statutory overnight delivery sent to the last address of the member shown on the corporation's records;
4. Any proceeding challenging an expulsion, suspension, or termination, including a proceeding in which defective notice is alleged, must be commenced within one year after the effective date of the expulsion, suspension, or termination; and
5. A member who has been expelled or suspended may be liable to the corporation for dues, assessments, or fees as a result of obligations incurred or commitments made prior to or during expulsion or suspension.

(Code 1981, §14-3-621, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 2000, p. 1589, § 3.)

Editor's notes.

- Ga. L. 2000, p. 1589, § 16, not codified by the General Assembly, provides that the amendment to this Code section is applicable with respect to notices delivered on or after July 1, 2000.

COMMENT

This section is taken from the Model Act. It departs from prior case law in Georgia holding that sanctions and expulsions are governed solely by the nonprofit corporation's articles and bylaws. See Bartley v. Augusta Country Club, Inc., 166 Ga. App. 1 (1983). This section does not address the substantive grounds for expulsion or suspension, but imposes a requirement that the procedures followed must be fair and reasonable.

Subsection (2)(A) establishes a safe harbor procedure. Subsection (2)(B) clarifies that the safe harbor procedure is not the only fair and reasonable procedure, and that failure to comply with the safe harbor does not mean that the procedure employed was not fair and reasonable under the circumstances.

Subsection (4) provides finality by requiring that a proceeding challenging a suspension or termination must be brought within one year after the effective date of the expulsion or suspension.

Courts generally have not evaluated the fairness or reasonableness of procedure used by religious corporations to expel or suspend members. See also section 14-3-180 concerning religious corporations.

JUDICIAL DECISIONS

Applicability of statute of limitation.

- For a plaintiff who filed and dismissed a suit for wrongful expulsion, a suit based on the same claim brought three years later was barred by the one-year statute of limitation in O.C.G.A. § 14-3-621, and the renewal provision of O.C.G.A. § 9-2-61 did not apply to allow refiling of the suit. Atlanta Country Club, Inc. v. Smith, 217 Ga. App. 515, 458 S.E.2d 136 (1995).

Section not applicable to restriction of social privileges.

- Since Moose Lodge bylaws covered the procedure for restricting social quarters privileges, and since O.C.G.A. § 14-3-621, by its terms, applies to membership expulsion or suspension, not to restrictions of social privileges, and only requires that the procedure be fair and reasonable under the circumstances, summary judgment for the defendants was affirmed. Rose v. Zurowski, 236 Ga. App. 157, 511 S.E.2d 265 (1999).

PART 4 DELEGATES

14-3-630. Authority to provide for delegates.

1. A corporation may provide in its articles or bylaws for delegates having some or all of the rights and authority of members.
2. The articles or bylaws may set forth provisions relating to:
   1. The characteristics, qualifications, rights, limitations, and obligations of delegates, including their selection and removal;
   2. Calling, noticing, holding, and conducting meetings of delegates; and
   3. Carrying on corporate activities during and between meetings of delegates.

(Code 1981, §14-3-630, enacted by Ga. L. 1991, p. 465, § 1.)

COMMENT

This section is taken from the Model Act. It authorizes corporations to operate with delegates rather than, or in addition to, members or a self-perpetuating board. If the corporation has a board of directors, the board is bound by the provisions of Article 8. If delegates are given some or all of the powers of members or directors, they have analogous rights, duties and obligations.

ARTICLE 7 MEETINGS

RESEARCH REFERENCES

Am. Jur. 2d.

- 6 Am. Jur. 2d, Associations and Clubs, §§ 21, 22. 18A Am. Jur. 2d, Corporations, § 927 et seq. 66 Am. Jur. 2d, Religious Societies, § 27.

C.J.S.

- 7 C.J.S., Associations, § 19. 18 C.J.S., Corporations, §§ 442 et seq., 454. 77 C.J.S., Religious Societies, § 27 et seq.

ALR.

- Notice of meeting of voluntary association, 167 A.L.R. 1233.

PART 1 GENERAL PROVISIONS

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