Hi-Country Prop. Rights Group v. Emmer

Plaintiffs, property owners in a development, filed a derivative suit against Defendants, the directors of the non-profit homeowners association that provided road maintenance and other services to the development, alleging that the directors favored their own properties in their allocation of road construction and maintenance funds. Instead of defending the suit on the merits, Plaintiffs appointed an independent committee to evaluate whether maintenance of the derivative suit was in the best interest of the nonprofit corporation pursuant to Utah Code 16-6a-612(4). Based on the committee's report, the district court dismissed the suit. The Supreme Court reversed, holding that the district court erred in concluding that the members of the committee, all of whom owned property allegedly receiving preferential treatment, were "independent" under section 612(4). Remanded to allow the district court to assess whether the directors were independent, applying the definition of independence clarified by the Court in this opinion. View "Hi-Country Prop. Rights Group v. Emmer" on Justia Law