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Elks Building Corporation of Norwood v. Benevolent and Protective of Elks of United States of America

United States District Court, D. Massachusetts

May 3, 2016

ELKS BUILDING CORPORATION OF NORWOOD, Plaintiff,
v.
BENEVOLENT AND PROTECTIVE OF ELKS OF THE UNITED STATES OF AMERICA, Defendant.

MEMORANDUM

Indira Talwani United States District Judge

I. Introduction

This case involves a dispute between Plaintiff Elks Building Corporation of Norwood (“Building Corporation”) and Defendant Benevolent and Protective Order of Elks of the United States of America (“BPOE”) over the right to control property in Norwood, Massachusetts, (“the Norwood Property”). The Building Corporation alleges that it owns the Norwood Property and that BPOE is engaged in a coordinated scheme to wrongfully commandeer and otherwise interfere with the Building Corporation’s use and enjoyment of the Norwood Property. BPOE contends that the Building Corporation is subject to BPOE’s internal rules. Presently before the court is BPOE’s Motion for Summary Judgment [#69]. For the following reasons, the motion is DENIED.

II. Facts[1]

BPOE is a national fraternal organization. It issues charters to local lodges. Def.’s Statement of Undisputed Material Facts, ¶¶ 1-4 [#70] [hereinafter Def.’s Facts]. The Norwood Lodge, located in Norwood, MA, is one such local lodge chartered by the BPOE. Amend. Verified Compl. ¶ 6 [#51]; Def.’s Answer ¶ 6 [#52]. BPOE has internal rules including a Constitution and Statutes (known as the “Laws of the Order”). Def.’s Facts, ¶ 3 [#70]; Decl. Michael Zellen Supp. Def.’s Mot. Summ. J. ¶4 [#71] (“Zellen Decl.”). Members of the Norwood Lodge have sworn to obey the BPOE statutes, rules, and regulations, and Norwood Lodge Bylaws. Def.’s Facts ¶ 3; Aff. Michael Brown Opp’n Def.’s Mot. Summ. J. (“Brown Aff.”) Ex. I [#85].

In 1922 (and 1923), the BPOE’s Laws of the Order stated that “[a] Lodge may establish and maintain a home or club, for the social enjoyment of its members” and that “control of and membership in such home or club, whether incorporated or not, shall be limited exclusively to the members in good standing in the Lodge establishing the same; provided, however, that the governing body of any such home or club may elect, as associate members, on such terms as it may prescribe and for a limited period of time, members in good standing other of Lodges of the Order.” Decl. Bryan Klatt Supp. Def.’s Mot. Summ. J. (“Klatt Decl.”) Attach. A, B [#73]. Section 208 of the BPOE’s 1922 and 1923 Laws of the Order provided further that “a subordinate lodge may, in its discretion, have such home or club incorporated, separately from the Lodge, but a majority of the officers, directors, or managing board of such corporation shall at all times be selected from the elective officers and the Past Exalted Ruler of the Lodge.” Id. Section 208 of the BPOE’s 1922 and 1923 Laws of the Order provided further that any Articles of Incorporation, by-laws, rules and regulations of such corporation be submitted to the Chairman of the Judiciary. Id.

On August 11, 1923, the Building Corporation was incorporated under Mass. Gen. Laws ch. 180 as a Massachusetts non-profit corporation.[2] Pl.’s Statement of Undisputed Material Facts ¶ 1 [#86] [hereinafter Pl.’s Facts]. Pursuant to its Certificate of Organization, the Building Corporation was formed

for the purpose of promoting the educational, literary and fraternal needs and desires of the members thereof, and of any person or persons affiliated therewith as a member or members of Norwood Lodge No. 1124, Benevolent and Protective Order of Elks, and for the purpose aforesaid may acquire by purchase or otherwise, and maintain, any and all real estate and personal property, essential and necessary therefor.

Decl. James Ewbank Supp. Def.’s Mot. Summ. J. (“Ewbank Decl.”) Attach. A [#72]. On August 21, 1923, the Building Corporation acquired title to property located at 152-158 Winslow Avenue, Norwood, Norfolk County, MA. Def.’s Facts ¶ 8 [#70]; Am. Verified Compl. Ex. B [#51-2] (Quitclaim Deed). Since 1923, the Building Corporation has leased the property on a yearly basis to Norwood Lodge. Pl’s Facts ¶¶ 15, 18 [#86]; Def.’s Facts ¶ 9 [#70].

BPOE’s statutes have been revised at various times. In 1950, the BPOE statutes were amended and purported to place further restrictions on action, without Grand Lodge permission, with respect to lodge property, regardless of whether the property was held by a separate corporation. Def.’s Facts ¶ 14.

In 1986, the Commonwealth of Massachusetts dissolved the Building Corporation for not filing required reports pursuant to Mass. Gen. Laws ch. 180, § 26A. Pl.’s Facts ¶ 102 [#86]. In March 1988, Norwood Lodge gave notice to its members that the Commonwealth of Massachusetts had dissolved the Building Corporation in 1986 for failing to file required reports and Norwood Lodge then voted to dissolve the Building Corporation and to take over the expenses and operations of the property. Def.’s Facts ¶¶ 22-23 [#70]. Several months later, however, Norwood Lodge moved to reestablish the Building Corporation. Id. ¶¶ 24, 27 [#70].

At some point before December 1988, the BPOE statutes were again amended. Id. ¶ 24 [#70]. This version of the statutes, still in place today, includes a provision, Section 16.030, stating that, if a lodge’s separate building corporation dissolves, “all property owned, held or controlled by it shall be transferred and distributed by its Board of Directors to the Lodge or other non-profit organization, fund, corporation or trust forming a part of or controlled by the [BPOE].” Id. ¶ 25 [#70]. The statutes further provide that all articles of incorporation and bylaws of a lodge’s separate building corporation, and any amendments thereto, must be approved by BPOE’s Committee on Judiciary in order to be effective. Id. ¶ 26 [#70].

The Building Corporation received a Revival Certificate from the Commonwealth of Massachusetts in March 1989. Decl. Philip L. Sullivan Supp. Def.’s Mot. Summ. J. (“Sullivan Decl.”) Attach. A 13 [#74]. The revival certificate states,

[i]n compliance with the provisions of section 108 of Chapter 156B of Massachusetts General Laws, application in proper form having been seasonably made upon me, the Secretary of the Commonwealth, for revival of Elks Building Corporation of Norwood a domestic corporation organized August 11, 1923 under the authority of Chapter 180 of the Massachusetts General Laws, and dissolved under the provision of Chapter 180 Sec. 26A of the Massachusetts General Laws, and the required fee having been received and all other requirements of the Statutes having been complied with, I hereby declare that Elks Building ...

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