Smooth Ashlar Grand Lodge v. Odom

Citations: 222 S.E.2d 614; 136 Ga. App. 812; 1975 Ga. App. LEXIS 1495Docket: 51136

Court: Court of Appeals of Georgia; November 12, 1975; Georgia; State Appellate Court

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The case involves an appeal by the Smooth Ashlar Grand Lodge and three individual defendants (Barton, Gray, and Newman) against a trial court's denial of their motions for summary judgment and dismissal. The Grand Lodge, a nonprofit fraternal society of York Masons incorporated in Georgia, faced scrutiny after a 1973 annual meeting where members raised concerns over discrepancies in an annual audit. The Grand Master and Grand Secretary could not adequately explain these discrepancies, leading members to demand a special audit.

Following this, plaintiffs (Odom and others) were appointed to seek clarification on the financial issues but were unsuccessful in contacting the Grand Master after multiple attempts. Consequently, they filed a lawsuit to compel an audit and access to the Grand Lodge's financial records. The defendants argued that the court should not interfere with the internal management of fraternal organizations, claimed that the plaintiffs had not exhausted internal remedies, did not represent a majority of the membership, and lacked individual property interests in the case.

The court noted that the main issue was whether it would interfere with the internal management of the Grand Lodge under these circumstances, emphasizing the lack of factual dispute.

Appellees, as plaintiffs, seek the right to inspect the financial records of a nonprofit organization under Georgia law (Ga. L. 1968, pp. 565, 750; Code Ann. 22-2612). The general principle established in *Golden Star of Honor v. Worrell* indicates that courts typically refrain from intervening in the internal operations of benevolent associations that act within their powers and in good faith. However, the court acknowledges that this principle may not apply to the current case, as the plaintiffs' request for record inspection does not interfere with the organization's internal affairs. The plaintiffs assert their legal right to access these records without intending to influence the organization's management or operations.

For the nonprofit to claim judicial noninterference, it must not violate any state laws regarding its relationship with members. The court finds no valid justification for the Grand Lodge to deny the plaintiffs' statutory rights. Additionally, the plaintiffs sought the appointment of an auditor to investigate the Grand Lodge’s accounts. The court cautions that this request would blur the lines of judicial interference in the organization's internal operations. 

The appellants argue that the plaintiffs must exhaust all internal grievance procedures before resorting to civil court, citing the Grand Lodge's constitution and by-laws. However, the court notes that these documents imply that legal recourse is ultimately available. The court will assess whether the plaintiffs should have pursued internal remedies or if legal intervention was justified. The trial court's decision to deny the appellants' motions is upheld.

Grievance procedures are outlined in part twelve of the constitution and by-laws, mandating that when disputes arise among subordinate lodges, their members, or with the Grand Lodge, the Grand Lodge or the Acting Grand Master must appoint commissioners to address these grievances. A distinction is made regarding disputes between a subordinate and the Grand Lodge, where the appointment of commissioners is at the Grand Master's discretion. During the Grand Lodge's annual meeting in September 1973, the Grand Master was aware of a motion approved by members to address discrepancies in the audit committee's report through a special audit. Appellants Barton and Gray committed to verifying records and reporting results following the meeting. Despite multiple attempts by appellee Odom to contact the Grand Master about these fiscal discrepancies, Barton did not return calls, and no audit report was provided. It was determined that a formal grievance was unnecessary since the issue was documented in the meeting minutes, essentially directing Barton to provide the requested information. The court concluded that requiring appellees to pursue further action, which was discretionary for the Grand Master, would be futile. Furthermore, a party cannot be compelled to undertake a fruitless endeavor to assert rights. The court emphasized that a benevolent association must comply with its own constitution and by-laws to avoid judicial intervention. As a result, the trial court's denial of motions for summary judgment, dismissal of the complaint, or judgment on the pleadings was affirmed.