Judges: JAMES D. \"BUDDY\" CALDWELL, Attorney General
Filed Date: 2/5/2009
Status: Precedential
Modified Date: 7/5/2016
Dear Mr. Konrad:
Our office received an opinion request from you concerning the Jefferson Parish Finance Authority ("Authority"), a public trust and corporation created pursuant to the provisions of the Louisiana Public Trust Act, La.R.S.
Your first question asks how many affirmative votes are required in order for the Trustees to act. Article VII, paragraph (5) of the Authority's Trust Indenture states:
The Trustees shall designate the time and place of all regular meetings. All actions by the Trustees pursuant to the provisions of this Trust Indenture shall be approved by the affirmative vote of at least a majority of the Trustees qualified to act as such under the provisions of this Trust Indenture . . .
You provide in your letter that there are eight (8) Trustees of the Authority.1 According to the Trust Indenture, approval by an affirmative vote of a majority of the Trustees qualified to act is required for the Trustees to act pursuant to the provisions of the Trust *Page 2 Indenture. You have provided that there are eight (8) Trustees qualified to act pursuant to the Trust Indenture. Therefore, the approval of a minimum of five (5) Trustees is required for the Authority to act pursuant to the provisions of the Trust Indenture.
Your second question addresses amendments to the By-laws of the Authority.2 Article VIII, entitled Amendments, provides:
These By-laws may be altered, amended or repealed by the affirmative vote of two-thirds of the Trustees present at the regular or special meeting, provided a quorum, as provided in these By-laws, be present and provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal, provided that any such alteration, amendment or repeal shall first be approved by the Jefferson Parish Council . . .
A quorum, as provided by Article IV, Section 4 of the By-laws, is:
A majority of the members of the Board of Trustees shall constitute a quorum, provided that if less than such majority of the Trustees is present at said meeting, a majority of the Trustees present may adjourn the meeting from time to time; and provided further that the Secretary shall notify any absent Trustee of the time and place of such adjourned meeting. The act of a majority of the members of the Board of Trustees shall be the act of the Board of Trustees.
Considering the above provisions of the By-laws, it appears that the By-laws may be amended by two-thirds of a quorum of Trustees present at a meeting (a quorum being five of the eight Trustees). This interpretation could potentially allow the By-laws to be amended by as few as four (4) members. As the Trust Indenture requires the approval of five (5) Trustees to act pursuant to the provisions of the Trust Indenture, and the By-laws allow the Trustees to alter the By-laws with less than five (5) Trustees, a conflict between provisions of the By-laws and the Trust Indenture is presented.
There appears to be nothing in the Louisiana Public Trust Act which addresses how to resolve a conflict between the By-laws and Trust Indenture. As provided for in La.R.S.
Words and phrases shall be read with their context and shall be construed according to the common and approved usage of the language. Technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning.
Additionally, Civil Code Article
The Trust Indenture for the Authority creates the actual trust and outlines the beneficiaries and public purpose the trust is serving.3
As a general matter, the Articles of Incorporation includes the purposes of formation for a corporation.4 For both a corporation and a non-profit corporation, the law provides that By-laws may contain provisions for the conduct of the corporation's affairs, provided the By-laws are "not inconsistent with law or the articles."5 Because the Trust Indenture serves a purpose for the Jefferson Parish Finance Authority, a public trust and corporation, similar to the purpose that the Articles of Incorporation would serve for a corporation, in accordance with La.R.S.
We hope that this opinion has adequately addressed the legal issues that you have raised. If our office can be of any further assistance, please do not hesitate to contact us.
With best regards,
JAMES D. "BUDDY" CALDWELL
ATTORNEY GENERAL
BY: __________________________
Emalie A. Boyce
Assistant Attorney General
JDC: EAB