Ex parte Caribe Resort Condominium Association Board of Directors PETITION FOR WRIT OF MANDAMUS: (In re: Robert Simmons v. Caribe Resort Condominium Association Board of Directors) (Baldwin Circuit Court: CV-22-900789).

Rel: December 13, 2024

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern

Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,

300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other

errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

SUPREME COURT OF ALABAMA

OCTOBER TERM, 2024-2025

_________________________

SC-2023-0624

_________________________

Ex parte Caribe Resort Condominium Association Board of

Directors et al.

PETITION FOR WRIT OF MANDAMUS

(In re: Robert Simmons et al.

v.

Caribe Resort Condominium Association Board of Directors et

al.)

(Baldwin Circuit Court: CV-22-900789)

STEWART, Justice.

SC-2023-0624

The Caribe Resort Condominium Association Board of Directors

("the board"), Larry Wireman, and Judy Wireman (collectively referred

to as "the board defendants"), as well as Caribe Realty, Inc., Caribe, Inc.,

and Sentinels, LLC (collectively referred to as "the Wireman companies"),

seek a writ of mandamus directing the Baldwin Circuit Court ("the trial

court") to grant their motion to dismiss the derivative claims asserted by

Robert Simmons, among others (see note 1, infra), on behalf of the Caribe

Resort Condominium Association ("the Caribe association"). For the

reasons explained below, we grant the petition in part, deny the petition

in part, and issue the writ.

Facts and Procedural History

The Caribe association is a nonprofit corporation that was formed

under the Alabama Nonprofit Corporation Act ("the Nonprofit act"), § 10-

3-1.01 et seq., Ala. Code 1975. Its bylaws provide that it was organized

for the purposes of providing for the acquisition, management,

maintenance, and care of Caribe Resort, a 608-unit condominium in

Orange Beach. The Caribe association was organized pursuant to the

provisions of the Alabama Uniform Condominium Act ("the

Condominium act"), § 35-8A-101 et seq., Ala. Code 1975. The Caribe

2

SC-2023-0624

association's affairs are generally managed by the board, whose president

is Larry Wireman. Judy Wireman, the secretary and treasurer of the

board, is an officer of the Caribe association and is responsible for its

record keeping and financial affairs. The Caribe association has

contracted with the Wireman companies, which are all owned by Larry

Wireman, to perform repairs and other services for Caribe Resort.

Simmons and other condominium-unit owners ("the Caribe

members"),1 purporting to act on behalf of the Caribe association, sued

the board defendants and the Wireman companies (in addition to the

Caribe association, as a nominal defendant), asserting the following

claims:

1. Claims against the board defendants for

(a) breaching duties allegedly owed to the Caribe association

pursuant to the Caribe associations' bylaws and articles of

incorporation, the Condominium act, and the Nonprofit

act, by:

(i) wasting corporate assets, resulting in the lack of

1The condominium members are Simmons, Dolores Baudo, Brian

Collins, Sandee Collins, Kevin A. Cross, Fred Drews, Jerry Drews, Jay

Gates, Danny Chase, Sharon Chase, Deborah Strevy, and David Strevy.

3

SC-2023-0624

maintenance and upkeep of Caribe Resort's common

areas;

(ii) negligently and wantonly entering into inflated self-

dealing contracts with the Wireman companies; and

(iii) misappropriating insurance proceeds and other

corporate funds to pay for the Wiremans' privately

owned marina.

2. Claims against the Wireman companies for

(a) conspiring in the board defendants' breaches of duties by

contracting for services in excessive amounts;

(b) failing to perform their work and services in a

workmanlike manner, resulting in damage to Caribe

Resort's common areas; and

(c) invoicing for services not provided.

The board defendants and the Wireman companies moved to

dismiss the Caribe members' claims, arguing that Alabama law does not

recognize derivative actions on behalf of nonprofit corporations. The trial

court denied the motion, and this petition followed.

Standard of Review

4

SC-2023-0624

A writ of mandamus is an extraordinary remedy available only

when the petitioner can demonstrate: " '(1) a clear legal right to the order

sought; (2) an imperative duty upon the respondent to perform,

accompanied by a refusal to do so; (3) the lack of another adequate

remedy; and (4) the properly invoked jurisdiction of the court.' " Ex parte

Nall, 879 So. 2d 541, 543 (Ala. 2003) (quoting Ex parte BOC Grp., Inc.,

823 So. 2d 1270, 1272 (Ala. 2001)). Although the denial of a motion to

dismiss is generally not reviewable by a petition for a writ of mandamus,

this Court will review the denial of a motion to dismiss that is premised

on whether the plaintiff can assert a derivative action. See Ex parte

4tdd.com, Inc., 306 So. 3d 8 (Ala. 2020).

This Court has explained:

"In reviewing the denial of a motion to dismiss by means

of a mandamus petition, we do not change our standard of

review. Id. … Under Rule 12(b)(6), Ala. R. Civ. P., a motion to

dismiss is proper when it is clear that the plaintiff cannot

prove any set of circumstances upon which relief can be

granted. Cook v. Lloyd Noland Found., Inc., 825 So. 2d 83, 89

(Ala. 2001). ' "In making this determination, this Court does

not consider whether the plaintiff will ultimately prevail, but

only whether [she] may possibly prevail." ' Id. (quoting Nance

v. Matthews, 622 So. 2d 297, 299 (Ala. 1993)). We construe all

doubts regarding the sufficiency of the complaint in favor of

the plaintiff. [Ex parte ]Butts, 775 So. 2d [173,] 177 [(Ala.

2000)]."

5

SC-2023-0624

Ex parte Haralson, 853 So. 2d 928, 931 (Ala. 2003).

Analysis

The board defendants and the Wireman companies argue that the

trial court erred in denying their motion to dismiss because, they

contend, Alabama does not authorize derivative actions on behalf of

nonprofit corporations. In support of that argument, they note that,

although certain provisions of the Alabama Business and Nonprofit

Entities Code, Title 10A of the Alabama Code, expressly authorize

derivative actions on behalf of for-profit corporations, see § 10A-2A-7.41,

Ala. Code 1975 ("A stockholder may commence or maintain a derivative

action in the right of a corporation to enforce a right of the corporation

...."), limited-liability companies, see § 10A-5A-9.02(a), Ala. Code 1975

("A member may commence or maintain a derivative action in the right

of a limited liability company .…"), and limited partnerships, see § 10A-

9A-9.02, Ala. Code 1975) ("A partner may commence or maintain a

derivative action in the right of a limited partnership .…"), there are no

similar provisions authorizing members of a nonprofit corporation to

commence a derivative action on behalf of the nonprofit corporation. That

omission, they argue, shows that the Legislature intended to preclude

6

SC-2023-0624

derivative actions for nonprofit corporations. The board defendants and

the Wireman companies further note that this Court has never

recognized the right of a member of a nonprofit corporation to bring a

derivative action on its behalf, and, indeed, we have located no cases in

which this Court has recognized such a right.

To further drive home their point that Alabama has made an

intentional policy decision against derivative actions for nonprofit

corporations, the board defendants and the Wireman companies note the

recent enactment of the Alabama Nonprofit Corporation Law. See Ala.

Acts 2023, Act No. 2023-503 (codified at § 10A-3A-1.01, Ala. Code 1975).

That act adopted the American Bar Association's Model Nonprofit

Corporation Act of 2021 almost in full. Notably, however, the Legislature

rejected the chapter of the model act concerning "Derivative

Proceedings," which would have allowed for derivative claims on behalf

of nonprofit corporations generally. Thus, the board defendants and the

Wireman companies argue, the Legislature's intentional omission of the

entire "Derivative Proceedings" section from the Alabama Nonprofit

Corporation Law indicates a policy disfavoring derivative actions for

nonprofit corporations. See 2B Norman J. Singer & J.D. Shambie

7

SC-2023-0624

Singer, Statutes and Statutory Construction § 52:5 (7th rev. ed. 2012)

("[W]hen a legislature models a statute after a uniform act, but does not

adopt particular language, courts conclude the omission was 'deliberate,'

or 'intentional,' and that the legislature rejected a particular policy of the

uniform act.").

We find the above arguments to be well taken and conclude that

Alabama law does not recognize derivative actions for nonprofit

corporations generally.

In their answer, the Caribe members do not argue that this Court

should recognize a general right of members of a nonprofit corporation to

assert derivative actions. Rather, they contend that their derivative

action is permitted under the Condominium act. Specifically, they

contend that, because the Caribe association was organized pursuant to

the Condominium act, and because the Condominium act imposes upon

elected board members and officers of a condominium association the

duty of exercising ordinary and reasonable care when acting on the

condominium association's behalf, see § 35-8A-303(a), Ala. Code 1975, the

Condominium act necessarily authorizes derivative actions to enforce

that duty of care. Section 35-8A-303(a) of the Condominium act states, in

8

SC-2023-0624

pertinent part, that, "[i]n the performance of their duties, the officers and

members of the board are required to exercise … ordinary and reasonable

care." The Alabama Commentary to that section further provides that,

"[s]ince incorporation of the association is required, an action can still

exist for breach of fiduciary duty against a director elected by unit owners

under corporate law theory (i.e.[,] self dealing or conflict of interest).

Ingalls Iron Works v. Ingalls Foundation, 262 Ala. 656, 98 So. 2d 30

(1957)."

The Condominium act, however, does not expressly or impliedly

provide the members of a condominium association with a derivative

form of action. Rather, as indicated by the above-quoted commentary,

condominium associations are -- like other corporate entities -- subject to

Alabama "corporate law." Indeed, § 35-8A-301, Ala. Code 1975, provides

that a condominium association "must be organized as a profit or

nonprofit corporation." As explained by the Alabama Commentary to

that section, the reason for requiring incorporation is that the drafters of

the Condominium act considered it "desirable" that condominium

associations be subject to "the well-developed body of corporate law

existing in the State of Alabama." As explained above, however,

9

SC-2023-0624

Alabama's corporate law does not generally authorize a member of a

nonprofit corporation to bring a derivative action. Thus, under Alabama

law, members of a nonprofit corporation do not have the authority to

bring a derivative action on behalf of the nonprofit corporation against

third parties, such as the Wireman companies.

Nevertheless, the Nonprofit act does provide members of a

nonprofit corporation the limited ability to seek judicial relief on behalf

of the nonprofit corporation. Section 10A-3-2.44(2), Ala. Code 1975,

authorizes "a proceeding by the nonprofit corporation, whether acting

directly or through a receiver, trustee, or other legal representative, or

through members in a representative suit, against the officers or

directors of the nonprofit corporation for exceeding their authority."

(Emphasis added.) The Caribe members argue that their claims against

the board defendants "alleged the [board defendants] exceeded their

authority as board members and officers …," Answer at 20, and, indeed,

their claims generally assert that the board defendants' actions violated

standards of care imposed by statute and the Caribe association's bylaws.

Thus, the Caribe members contend that the board defendants' actions

were ultra vires acts, and that § 10A-3-2.44, therefore, authorized them

10

SC-2023-0624

to assert their claims in a "representative suit" against the board

defendants.

In Carmichael v. Tarantino Properties, Inc., 604 S.W.3d 469 (Tex.

App. 2020), a Texas Court of Appeals addressed a similar argument. In

Carmichael, several members of a nonprofit condominium association

brought claims on behalf of the association against three directors of the

association and other third-party companies that had entered into

management or joint-use agreements with the association. Among other

things, the association members contended that the directors had

exceeded their authority in entering the management and joint-use

agreements. The trial court in Carmichael dismissed the action on the

basis that the association members lacked standing to bring derivative

claims on behalf of the association.

On appeal, the court in Carmichael agreed that, under Texas law,

members of a nonprofit corporation did not generally have the right to

assert a derivative action on behalf of the nonprofit corporation.

However, relying on a statute similar to § 10A-3-2.44, which authorized

members of a nonprofit corporation to assert a representative suit

against an officer or director of the nonprofit corporation for

11

SC-2023-0624

unauthorized acts, the Carmichael court concluded that the association

members could assert claims on the association's behalf against the

directors alleging that the directors' actions had amounted to ultra vires

acts. Thus, the Carmichael court reversed the judgment to the extent

that it had dismissed the claims asserting that the directors had acted

beyond their authority in entering into the management and joint-use

agreements.

Here, the Caribe members have alleged that the board defendants

have entered into contracts with entities owned and/or controlled by

Larry Wireman, allegedly for the purpose of wrongfully diverting the

Caribe association's funds to Wireman and other board members. The

Caribe members have further alleged that such actions are violations of

the Nonprofit act and the Caribe association's bylaws and articles of

incorporation. For instance, the complaint alleged that the board

defendants' actions violated Article III of the Caribe association's articles

of incorporation, which, they stated, provided that income received by the

Caribe association may be applied only to the purposes and objectives of

the Caribe association and that "no part of the net earning thereof shall

inure to the benefit of any private member, officer, director, or

12

SC-2023-0624

individual." 2 We note that, in determining whether a complaint is

sufficient to withstand a motion to dismiss, this Court must accept the

allegations in the complaint as true. See, e.g., Zinn v. Till, 380 So. 3d

1026, 1028 (Ala. 2023). Further, we note that the board defendants have

not directly addressed the Caribe members' assertion that their lack-of-

authority claims against the board defendants may be asserted on the

Caribe association's behalf under § 10A-3-2.44.3 Accordingly, we

conclude that, to the extent that the Caribe members' claims challenge

2Thearticles of incorporation are not included in the materials

submitted by the parties.

3In their reply brief, the board defendants do not respond directly

to the argument made by the Caribe members in their answer that they

have alleged that the board defendants "exceeded their authority" and

that their acts were therefore "ultra vires." In fact, the board defendants

included only a single sentence in the mandamus petition arguing that

"[n]one of the claims sought to invalidate any transaction made by the

Association as ultra vires acts under § 10A-3-2.44, Ala. Code 1975."

Petition at 8. It is the burden of the petitioners to establish a " 'clear legal

right' " in order to obtain a writ of mandamus. Ex parte Nall¸879 So. 2d

541, 543 (Ala. 2003) (citation omitted). Given the failure of the board

defendants to explain why each of those claims were not alleging that the

officers and directors were "exceeding their authority," the board

defendants have not met their burden at this point. Moreover, they do

not explain why they believe that § 10A-3-2.44 applies only to claims that

seek "to invalidate [a] transaction" when other language in that statute

appears to include claims beyond those that seek "to invalidate" a

transaction.

13

SC-2023-0624

the board defendants' authority to engage in particular conduct, the

board defendants have not established a clear legal right to the dismissal

of such claims.

The board defendants and the Wireman companies also contend

that the Caribe members have not complied with Ala. R. Civ. P. 23.1

because, they argue, the owners of 8 condominium units cannot fairly and

adequately represent the interests of the owners of 608 units. Rule 23.1

states, in pertinent part, that "[t]he derivative action may not be

maintained if it appears that the plaintiff does not fairly and adequately

represent the interests of the shareholders or members similarly situated

in enforcing the right of the corporation or association."

The board defendants and the Wireman companies insist that their

adequacy challenge is a challenge to the Caribe members' "standing" and

thus raises a "question of jurisdiction" that this Court should reach now

-- at the pleading stage. Petitioners' reply brief at 11. They are mistaken.

The question whether the Caribe members will fairly and adequately

represent the Caribe association is a fact inquiry that is not a

14

SC-2023-0624

jurisdictional matter.4 Roberts v. Alabama Power Co., 404 So. 2d 629

(Ala. 1981) (holding that the determination of adequacy of representation

rests largely in the discretion of the trial court and will not be overturned

except for an abuse of that discretion). In fact, the board defendants and

Wireman companies admit that their adequacy challenge is a factual one,

and they assert that they are "challeng[ing] the merits of [the] allegation"

that the Caribe members are fair and adequate representatives.5

Petitioners' reply brief at 12. Moreover, here, the trial court did not make

a determination that the class representatives are (or are not) adequate,

4Likewise, there is "a heightened pleading standard" in derivative

actions, although that heightened standard does not implicate standing

or jurisdiction. Ex parte 4tdd.com, Inc., 306 So. 3d 8, 16 (Ala. 2020)

("Questions pertaining to the heightened pleading requirements of Rule

23.1[, Ala. R. Civ. P.,] do not invoke the plaintiff's standing to bring the

substantive claims and do not implicate the trial court's subject-matter

jurisdiction."). We need not reach the question whether there might be

any requirements that could be "jurisdictional" in derivative actions.

5The relevant text of Rule 23.1, Ala. R. Civ. P., is virtually identical

to the text of Rule 23(a)(4), Ala. R. Civ. P., which states that "the

representative parties will fairly and adequately protect the interests of

the class." This requirement is usually determined at the time of class

certification -- not at the pleading stage. See generally Ala. Code 1975, §

6-5-641(e) (setting certain prerequisites for any class-certification order).

While Rule 23 does not foreclose the possibility of making this

determination only on the pleadings, the failure of a trial court to do so

is certainly not grounds for mandamus relief.

15

SC-2023-0624

and thus we cannot reach the question whether such a determination

would be an abuse of discretion. Given that the determination of

adequacy of representation is not jurisdictional and instead involves the

trial court's discretion, and given that the trial court has not even made

the determination, the board defendants and the Wireman companies

have not met their burden with regard to their adequacy challenge.

Conclusion

For the reasons stated above, we agree that, under Alabama law,

members of a nonprofit corporation have no general right to bring a

derivative action on behalf of the nonprofit corporation. Nevertheless,

such members do have the ability to bring a derivative action "against

the officers or directors of the nonprofit corporation for exceeding their

authority." § 10A-3-2.44(2). Thus, in this case, we conclude that the

Caribe members' claims asserted against the Wireman companies on

behalf of the Caribe association were due to be dismissed, and, as to those

claims, we grant the petition and issue the writ. However, the Caribe

members' claims against the board defendants are based on assertions

that the board defendants acted beyond their authority. As to those

claims, we conclude that the board members have not established a clear

16

SC-2023-0624

legal right to an order of dismissal, and we therefore deny the petition in

part.

PETITION GRANTED IN PART AND DENIED IN PART; WRIT

ISSUED.

Parker, C.J., and Mitchell and Cook, JJ., concur.

Shaw, J., concurs in part and concurs in the result, with opinion.

Bryan, J., concurs in the result.

Sellers. J., concurs in part and dissents in part, with opinion, which

Wise and Mendheim, JJ., join.

17

SC-2023-0624

SHAW, Justice (concurring in part and concurring in the result).

I concur in the portion of the main opinion granting the petition in

part and issuing the writ. Specifically, I agree that Alabama law,

generally, does not provide for derivative actions relating to nonprofit

corporations; thus, there is no authority for members of a nonprofit

corporation to bring a derivative action on behalf of the nonprofit

corporation against third parties.

However, § 10A-3-2.44, Ala. Code 1975, does allow certain types of

"representative" actions. As pertinent to the arguments in this case, that

Code section provides:

"No act of a nonprofit corporation and no conveyance or

transfer of real or personal property to or by a nonprofit

corporation shall be invalid by reason of the fact that the

corporation was without capacity or power to do an act or to

make or receive a conveyance or transfer, but lack of capacity

or power may be asserted:

"….

"(2) In a proceeding by the nonprofit corporation, …

through members in a representative suit, against the officers

or directors of the nonprofit corporation for exceeding their

authority."

(Emphasis added.) The type of "proceeding" that Code section allows

"through members in a representative suit" is limited and would appear

18

SC-2023-0624

to allow only a challenge to whether an "act" was "invalid" because

"officers or directors" were "exceeding their authority."

The petition, which focuses on the meritorious issues upon which

this Court grants the writ, does not demonstrate to me that any claims

against the officers or directors named in the complaint cannot proceed

under § 10A-3-2.44. I thus express no opinion as to whether any of the

counts of the complaint might state a claim for purposes of § 10A-3-2.44,

and I concur in the result to the portion of the main opinion denying the

petition in part on this issue. 6 The trial court's decision that is challenged

in this matter is interlocutory; whether the respondents' claims can be

pursued under § 10A-3-2.44 awaits further litigation. Cf. Cutler v. Orkin

Exterminating Co., 770 So. 2d 67, 69 (Ala. 2000) ("[B]ecause of the

extraordinary nature of a writ of mandamus, the denial of relief by

mandamus does not have res judicata effect.").

6I concur with the portion of the main opinion concluding that the

petitioners' challenge regarding Rule 23.1, Ala. R. Civ. P., is premature

and denying the petition in part on that ground.

19

SC-2023-0624

SELLERS, Justice (concurring in part and dissenting in part).

I agree with the main opinion that the claims of Robert Simmons

and the other condominium-unit owners ("the Caribe members") against

the Caribe Resort Condominium Association Board of Directors, Larry

Wireman, and Judy Wireman ("the board defendants") fall within the

scope of the statute of the Nonprofit Corporation Act ("the Nonprofit act"),

§ 10A-3-1.01 et seq., Ala. Code 1975, allowing "representative suit[s]"

against officers and directors of a nonprofit corporation when they have

allegedly committed ultra vires acts, and, therefore, may be brought by

the Caribe members against board defendants. See § 10A-3-2.44, Ala.

Code 1975. Subsection (2) of that statute allows members of a nonprofit

corporation, like the Caribe members, to challenge board activity that

exceeds the power authorized by the corporation's bylaws. The ultra vires

doctrine has a broad reach and can apply even to torts. First Nat'l Bank

v. Henry, 159 Ala. 367, 49 So. 97 (1905). The claims against the board

defendants for wasting corporate assets, negligently entering into self-

dealing contracts with Caribe Realty, Inc., Caribe, Inc., and Sentinels,

LLC ("the Wireman companies"), and misappropriating insurance

proceeds could involve ultra vires activities and, if so, would be

20

SC-2023-0624

appropriately actionable under the Nonprofit act. See Richard A.

Thigpen, Alabama Corporation Law, § 7:6 (4th ed. 2012). Therefore, those

claims could be brought by the Caribe members under § 10A-3-2.44.

Accordingly, the board defendants do not have a clear legal right to the

dismissal of those claims, and I concur that the petition is properly denied

on that basis.

However, I disagree that Alabama law totally precludes derivative

actions brought by members of a nonprofit corporation against the

corporation's board. As the main opinion acknowledges, the Alabama

Business and Nonprofit Entity Code, Title 10A of the Alabama Code, does

not expressly authorize a derivative action for a nonprofit corporation

despite doing so for for-profit corporations, limited-liability companies,

and limited partnerships. See §§ 10A-2A-7.41, 10A-5A-9.02(a), 10A-

9A.902, Ala. Code 1975. And as the main opinion additionally recognizes,

the Legislature did not adopt the chapter pertaining to derivative actions

when it adopted the American Bar Association's Model Nonprofit

Corporation Act of 2021 ("the Model Nonprofit act").

Nevertheless, this dispute is not governed solely by the Nonprofit

act. The Alabama Uniform Condominium Act of 1991 ("the Condominium

21

SC-2023-0624

act"), § 35-8A-101 et seq., Ala. Code 1975, equally applies and, in some

situations, overrides the Nonprofit act. The Condominium act places a

duty of "ordinary and reasonable care" on the elected directors like the

board defendants. § 35-8A-303(a)(ii), Ala. Code 1975. 7 The Nonprofit act

applies generally to a variety of organizations in Alabama, including

charitable organizations, athletic clubs, country clubs, 8 and churches. 9

Its scope is exceedingly broad and applies to a plethora of organizations

that have little in common other than that their direct purpose is not to

make a profit for their members. See Henry B. Hansmann, Reforming

Nonprofit Corporation Law, 129 U. Pa. L. Rev. 497 (1981) (critiquing the

application of the same standards to nonprofit organizations that have

drastically different purposes); § 10A-3-1.03, Ala. Code 1975.

7Alabama caselaw recognizes that this duty of care is distinct from

the ultra vires doctrine. Sellers v. Head, 261 Ala. 212, 216, 73 So. 2d 747,

750 (1954) (" '[Directors] are liable for losses of the corporation caused by

their willful and intentional departures from duty, their fraudulent

breaches of trust, their gross negligence, or their ultra vi res acts.' "

(citation omitted; emphasis added)).

8See Cartron v. Board of Governors of Valley Hill Country Club,

Inc., [Ms. SC-2023-0015, Nov. 3, 2023] __ So. 3d __ (Ala. 2023) (Cook, J.,

concurring specially).

9See Ex parte Board of Trs./Directors and/or Deacons of Old Elam

Baptist Church, 983 So. 2d 1079 (Ala. 2007).

22

SC-2023-0624

The Condominium act, on the other hand, is specific in scope and

effect. This Court has long recognized that, "[i]n the event of a conflict

between two statutes, a specific statute relating to a specific subject is

regarded as an exception to, and will prevail over, a general statute

relating to a broad subject." Ex parte Jones Mfg. Co., 589 So. 2d 208, 211

(Ala. 1991); Downing v. City of Russellville, 241 Ala. 494, 503, 3 So. 2d

34, 41 (1941) (opinion on rehearing). Based on this Court's precedents

and the unique aspects of condominium associations that do not apply to

other nonprofit corporations, the specific provisions of the Condominium

act should govern over the general provisions of the Nonprofit act. Thus,

I would interpret § 35-8A-303 to give effect to the statutorily imposed

duties and responsibilities of a condominium-association's board of

directors and allow condominium-association members to pursue an

action when the directors have not met those duties and

responsibilities. 10

10See Ironman Med. Props., LLC v. Chodri, 268 N.C. App. 502, 509-

11, 836 S.E.2d 682, 689-90 (2019) (recognizing that the North Carolina

Condominium Act, which is analogous to our own Condominium act and

is without a derivative-action section, places a fiduciary duty on the

directors of a condominium association to the unit owners who have

standing to sue when the directors violate that duty).

23

SC-2023-0624

The main opinion cites the Alabama Commentary to § 35-8A-301,

Ala. Code 1975, which explains that the Legislature's requirement that

condominium-owners' associations be organized as corporations was

intended to apply Alabama's well-developed corporate law to those

associations. However, the main opinion omits that the Legislature

enacted § 35-8A-301 in 1990, more than 30 years before the Legislature's

partial adoption of the Model Nonprofit act. Therefore, there is no reason

to conclude that, when it sought to apply Alabama's well-developed body

of corporate law to condominium-owners' associations, the Legislature

intended to deprive condominium-association members of the right to

challenge a director's breach of duty.

I am not convinced that the Legislature's omission of a derivative-

standing provision in an act that applies generally to thousands of

organizations in this state means that members of a specific type of

organization cannot enforce the duties statutorily owed to them. The

specific provisions of the Condominium act should supersede any

conflicting provisions of the more general Nonprofit act. Jones Mfg. Co.,

589 So. 2d at 211. While § 10A-3-2.44 of the Nonprofit act can provide

redress for some bad acts of a director, it does not give members a remedy

24

SC-2023-0624

when other members are ambivalent to the director's violation of the duty

of care or when the attorney general chooses not to intervene. See

Deborah A. DeMott, Shareholder Derivative Actions: Law and Practice §

2:12 (2024-2025) (discussing the weak enforcement mechanisms offered

by ultra vires statutes). I respectfully dissent from the main opinion's

conclusion that members of a condominium-owners' association are

unable to challenge a director's violation of his fiduciary duty of care.

Wise and Mendheim, JJ., concur.

25