Petty v. Hospital Service Ass'n of Northeastern Pennsylvania

CONCURRING OPINION BY

Judge FRIEDMAN.

Like the majority, I would affirm the decision of the Court of Common Pleas of Lackawanna County (trial court) to grant the preliminary objections of the Hospital Service Association of Northeastern Pennsylvania, d/b/a Blue Cross of Northeastern Pennsylvania, (Northeastern Blue Cross) and dismiss the complaint filed by Robert Petty and R.G. Petty Masonry, on behalf of themselves and all others similarly situated, (collectively, Petty) for lack of standing.

I write separately to address Petty’s argument that, as a subscriber, he has standing under section 5793(a) of the Pennsylvania Nonprofit Corporation Law of 1988 (Nonprofit Law)¹ to challenge Northeastern Blue Cross’s corporate action. That provision provides, “Upon petition of any person whose status as, or whose rights or duties as, a member, director, member of an other body, officer or otherwise of a nonprofit corporation are or may be affected by any corporate action, the court may hear and determine the validity of such corporate action.” 15 Pa. C.S. § 5793(a). Petty asserts that section 5793(a) confers standing because, under the Bylaws, the corporation is run solely by subscribers. (Petty’s brief at 21 n. 15; Petty’s reply brief at 6.)

Section 1.1 of the Bylaws states that the “membership of the Corporation shall consist of no less than forty (40) nor more than one hundred (100) persons who are subscribers.... ” (O.R., Plaintiffs supp. brief, ex. D(A) at 1.) Section 2.4 of the Bylaws states that “[a]ll Directors of the Corporation shall be subscribers.... ” (O.R., Plaintiffs supp. brief, ex. D(A) at 3.) Section 3.1 of the Bylaws requires the Board of Directors to establish Area Advisory Councils, “who shall be subscribers.... ” (O.R., Plaintiffs supp. brief, ex. D(A) at 7.)

Thus, all members, directors and members of the area advisory councils of Northeastern Blue Cross are subscribers. However, not all subscribers are members, directors or members of the area advisory councils. Thus, Petty’s argument that the corporation is run by subscribers is misleading. Northeastern Blue Cross is run by subscribers who have been elected members, directors or members of the area advisory councils. Petty is a subscriber, but Petty has not been elected a member, director or member of an area advisory council. Thus, Petty does not now have standing to challenge corporate action. However, as a subscriber, Petty may seek election to membership at the next annual meeting, and, if elected, Petty would have standing.

Judge SIMPSON joins in this concurring opinion.

1 . 15 Pa.C.S. § 5793(a).