Rarity Bay Partners v. Rarity Bay Community Association Inc.

08/23/2021
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
June 9, 2021 Session
RARITY BAY PARTNERS v. RARITY BAY COMMUNITY
ASSOCIATION INC. ET AL.
Appeal from the Chancery Court for Monroe County
No. 21-173 Jerri Bryant, Chancellor
___________________________________
No. E2021-00166-COA-R10-CV
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Members of a nonprofit corporation sought to compel production of election records from
the election of the corporation’s board of directors. The trial court ordered production of
the records pursuant to a protective order. This Court granted the Rule 10 appeal to
determine whether production of the election ballots is required under the Tennessee
Nonprofit Corporation Act, whether the members have a privacy right with respect to their
votes, and whether the trial court’s protective order protects that privacy right. We hold
that production of the ballots is required under the statute, members have a limited privacy
right with respect to their votes, and the protective order protects that right.
Tenn. R. App. P. 10 Extraordinary Appeal; Judgment of the Chancery Court
Affirmed
J. STEVEN STAFFORD, P.J., W.S., delivered the opinion of the court, in which KENNY
ARMSTRONG and CARMA DENNIS MCGEE, JJ., joined.
Dana S. Pemberton, Knoxville, Tennessee, for the appellants, Michael Ayres, Amy Ayres,
Clayton Wood, Doug Yoakley, Kris Schuh, Jeff Laws, Jim Atchley, Denzil Theis, and
Rarity Bay Community Association, Inc.
Adrienne L. Anderson and Shannon van Tol, Knoxville, Tennessee, for the appellee, Rarity
Bay Partners, fka Salem Pointe Capital Partners.
OPINION
FACTUAL AND PROCEDURAL HISTORY
Plaintiff/Appellee Rarity Bay Partners1 (“Plaintiff”) is a general partnership that
owns lots in a subdivision known as Rarity Bay. Plaintiff is a member of the property
association2 for the subdivision, Rarity Bay Community Association, Inc. (“RBCAI”).
RBCAI is a nonprofit corporation, and Plaintiff owns more than five percent of the voting
power of RBCAI. In August 2020, Plaintiff filed a complaint against RBCAI and other
parties, including RBCAI’s Board of Directors (“the board”) and its members,3 in the
Chancery Court for Monroe County (the “trial court”). The complaint sought, inter alia, to
compel production of RBCAI’s records from the 2019 board election, after one of
Plaintiff’s nominees lost by a narrow margin. In September 2020, Plaintiff filed a motion
to require production of the records pursuant to the Tennessee Nonprofit Corporation Act,
Tennessee Code Annotated § 48-66-101, et seq.4 RBCAI opposed the motion, which was
heard by the trial court on January 20, 2021. Following the hearing, the trial court granted
Plaintiff’s motion. The trial court did not specifically explain why it granted Plaintiff’s
motion, but ruled that RBCAI would be required to produce to Plaintiff the records related
to the 2019 board election, “including, but not limited to, records reflecting the identity of
members who voted in the 2019 election and the number of votes cast by each, . . . the
ballots cast in the election, and any ballots rejected by [RBCAI] that it did not include in
the election results.” Additionally, the trial court ruled that these records would be
produced pursuant to a protective order prohibiting disclosure of how members cast their
votes, except as necessary for litigation.
Defendants filed a motion asking the court to reconsider its ruling, which was
denied. In denying the motion, the trial court found, inter alia:
1. . . . The Records and Reports chapter of the Tennessee Nonprofit
Corporation Act, found at Code Ann. § 48-66-101, et seq. requires the
production of the Defendant nonprofit Association’s election records
requested by Plaintiff in this action, including all election ballots in un-
1
Rarity Bay Partners was formerly known as Salem Pointe Capital Partners.
2
The parties refer to RBCAI as a “property association” and a “homeowner’s association.” Neither
party argues that there is a material distinction between those two terms. We will refer to RBCAI as a
“property association” solely for ease of reference.
3
Of the parties that Plaintiff originally filed the complaint against, only RBCAI and the board
members are parties to this appeal, and therefore they will be referred to collectively as “Defendants.”
4
This motion and the order granting the Rule 10 application in this case, discussed infra, cite to
Tennessee Code Annotated section 48-66-101, et seq., when referencing the Tennessee Nonprofit
Corporation Act. However, the entirety of the Tennessee Nonprofit Corporation Act is contained in
Tennessee Code Annotated section 48-51-101, et seq. (“the Nonprofit Act”). We will refer to the entirety
of the Nonprofit Act, not only section 48-66-101, et seq., in conducting our analysis. See Eastman Chem.
Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004) (citation omitted) (“The statute must be construed in
its entirety, and it should be assumed that the legislature used each word purposely and that those words
convey some intent and have a meaning and a purpose.”).
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redacted form, subject to the Protective Order entered by the Court.
2. There is nothing stated on the exemplar written ballot or in the election
procedures that states the Association’s elections are secret.
3. There is no way for the Plaintiff to make any sort of determination in this
case without the appropriate discovery. The unredacted ballots are
discoverable and should be produced.
4. The Protective Order entered by the Court adequately protects the interests
of the voters and there has been no showing that it would be to anyone’s
detriment to reveal the ballots under the Protective Order.
This Court granted Defendants’ motion for an extraordinary appeal under Rule 10
of the Tennessee Rules of Appellate Procedure on March 18, 2021. This Court ultimately
also ordered all proceedings in the trial court to be stayed pending the outcome of this
appeal, with the exception of allowing the trial court to rule upon a motion for an injunction
not at issue in this appeal.
ISSUES PRESENTED
This Court granted review of the following issues:
1. Whether the Nonprofit Act requires the production of election ballots; and if so,
2. Whether the voters have a right to privacy with respect to their votes and, if so,
whether the protective order entered by the Trial Court protects that right.
DISCUSSION
I.
We begin with the first issue on appeal: whether the Nonprofit Act requires
production of election ballots. “Questions regarding the interpretation of a statute . . .
involve issues of law. [T]herefore, the applicable standard of review is de novo, affording
no presumption of correctness to the legal conclusions reached by the cour[t] below.” U.S.
Bank, N.A. v. Tennessee Farmers Mut. Ins. Co., 277 S.W.3d 381, 386 (Tenn. 2009)
(citations omitted). “When interpreting statutes, a reviewing court must ascertain and give
effect to the legislative intent without restricting or expanding the statute’s intended
meaning.” Id. (citation omitted). “When the statutory language is clear and unambiguous,
we must apply its plain meaning in its normal and accepted use, without a forced
interpretation that would limit or expand the statute’s application.” Eastman Chem. Co.,
151 S.W.3d at 507 (citations omitted). “Furthermore, every word in a statute is presumed
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to have meaning and purpose.” Tennessee Farmers Mut. Ins. Co., 277 S.W.3d at 386(citations omitted). “Only if the plain language of a statute is ambiguous must the Court
look beyond the statutory language to determine the legislature’s intent.” State v. Jennings,
130 S.W.3d 43, 46 (Tenn. 2004) (citations omitted). In that event, “we may consider ‘the
broader statutory scheme, legislative history, and other sources’ in discerning the
legislative intent.” In re Bentley D., 537 S.W.3d 907, 912 (Tenn. 2017) (citation and
internal quotation marks omitted).
Defendants argue that the Nonprofit Act does not require the production of election
ballots, but rather it requires that the only election record RBCAI maintain is a member
list, pursuant to section 48-66-101(c). Section 48-66-101(c) states, “A corporation or its
agent shall maintain a record of its members in a form that permits preparation of a list of
the names and addresses of all members, in alphabetical order by class showing the number
of votes each member is entitled to vote.” Defendants also rely on the case of Sigel v.
Monarch Condo. Ass’n, Inc., No. W2011-01150-COA-R3-CV, 2012 WL 2499551 (Tenn.
Ct. App. June 29, 2012). In that case, a member of a condominium association ran in the
election for the association’s board of directors. Id. at *1. When he lost, he argued he was
entitled to inspect the ballots under the Nonprofit Act and the Tennessee Condominium
Act (“the Condominium Act”). Id. at *2.
Ultimately, this Court decided that the Condominium Act controlled, because the
association’s by-laws essentially stated as much. See id. at *5. We also noted that the
Nonprofit Act was broader than the Condominium Act, and thus the more specific statute
took precedence. See id. The petitioner argued that the ballots should be produced pursuant
to the section of the Condominium Act mandating that the association’s meeting minutes
be produced. Id. at *7. He “reason[ed] that the ballots [we]re the only complete recordings
of the actions taken by the Association members in the election, as the tally sheets d[id]
not disclose which unit owners voted for which candidates.” Id. This Court rejected that
argument, instead deciding that the use of the term “minutes” in the Condominium Act was
unambiguous and, as such, should be applied according to its plain meaning. Id. We
concluded, “Black’s Law Dictionary defines ‘minutes’ as ‘memoranda or notes of a
transaction, proceeding, or meeting.’ Black’s Law Dictionary 1087 (9th ed. 2009). We
agree . . . that the term ‘minutes’ in Section 503(5) [of the Condominium Act] does not
include the Association’s written election ballots.”
The petitioner in Sigel also relied on another section of the Condominium Act in
arguing he was entitled to the ballots, which made reference to “financial and other
records.” Id. at *8. We concluded that the term “other records” was ambiguous, and thus
we “turned to the entire statutory scheme and elsewhere to ascertain the legislative intent
and purpose.” Id. (citations and internal quotation marks omitted). After examining the
Condominium Act’s legislative history and employing principles of statutory construction,
we declined to accept the petitioner’s contention that the term “other records” included
ballots. Id. at *8–9. We also based this conclusion on the reasoning that “such a
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construction would [not] be consonant with the expectations and intent of our Legislature
in interpreting the Tennessee Condominium Act.” Id. at *10. We explained that “[w]e
consider the Legislature’s intent in light of the fundamental expectation of privacy and
secrecy in voting by written ballot, as opposed to viva voce voting, voting by a show of
hands, or other such public voting methods.” Id. (citations omitted). And while “we
decline[d] to extend the [state] constitutional right to secrecy of the ballot to an election for
the board of directors for a condominium association,” we still “interpret[ed] the intent of
the legislature in enacting the Tennessee Condominium Act” against the backdrop of “the
historic, fundamental right to secrecy of the ballot under the Tennessee Constitution.” Id.
at *11. We noted that “[o]ur interpretation would no doubt be different if Tennessee’s
Legislature were to state explicitly that a condominium association must disclose its
election ballots. It has not.” Id. Therefore, we concluded that “we [did] not believe that the
Tennessee Legislature would have expected or intended written election ballots to be
included in the documents available to condominium unit owners on demand pursuant to”
the second section of the Condominium Act that the petitioner relied on. Id. Consequently,
the petitioner was not granted access to the ballots.
The parties obviously disagree as to the application and effect of Sigel on the case-
at-bar. Defendants contend that the language employed by the Nonprofit Act requiring
production of “minutes” and “accounting records” is substantially similar to language
employed in the Condominium Act and insufficient to require productions of ballots.
Plaintiff, on the other hand, argues, inter alia, that the language of the Nonprofit Act is
distinguishable from the Condominium Act and requires production of election ballots. In
order to resolve this dispute, we must first turn to the statutory language at issue. Cf.
Reynolds v. Gray Med. Invs., LLC., 578 S.W.3d 918, 920 (Tenn. Ct. App. 2018) (citing
Mills v. Fulmarque, Inc., 360 S.W.3d 362, 368 (Tenn. 2012)) (“In determining legislative
intent, we first must look to the text of the statute . . . .”).
First, Plaintiff points to section 48-66-101(b), which states that “[a] corporation
shall maintain appropriate accounting records.” Plaintiff argues that because RBCAI is
governed by the board, and the board exercises all power over RBCAI’s finances, RBCAI’s
obligation to maintain accounting records under the Nonprofit Act includes maintaining
records demonstrating that the board members have been elected validly. Moreover,
Plaintiff avers that sections 48-66-102(b) and (c) provide the vehicle by which Plaintiff is
entitled to inspect RBCAI’s accounting records. Section 48-66-102(b) provides as follows:
(b) A member is entitled to inspect and copy, during regular business hours
and at a reasonable location specified by the corporation, any of the following
records of the corporation if the member meets the requirements of
subsection (c) and gives the corporation written notice at least five (5)
business days before the date on which the member wishes to inspect and
copy:
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(1) Excerpts from any records required to be maintained under § 48-66-
101(a), to the extent not subject to inspection under subsection (a);
(2) Accounting records of the corporation; and
(3) Subject to § 48-66-105, the membership list.
And section 48-66-102(c) states:
(c) A member may inspect and copy the records identified in subsection (b)
only if:
(1) The member’s demand is made in good faith and for a proper purpose;
(2) The member describes with reasonable particularity the purpose and the
records the member desires to inspect; and
(3) The records are directly connected with the purpose for which the demand
is made.
Defendants’ brief contains little argument directly addressing whether the
requirement to disclose “accounting records” includes the obligation to disclose election
ballots. Instead, Defendants merely state that “accounting records” should be interpreted
the same as “minutes” and “financial and other records” were interpreted under Sigel, as
“insufficient to require the production of elections ballots.” More broadly, Defendants
argue that Sigel imposes a bright-line requirement that election ballots are not required to
be produced unless the term “ballot” is “expressly included by the state legislature.”
Respectfully, we cannot agree with Defendants’ broad argument. Importantly, our
reading of Sigel reveals that it did not impose such a requirement. In Sigel, we ultimately
held that the Condominium Act did not require disclosure of election ballots after a deep
and detailed analysis of the language of the statute, its legislative history, and the policy
surrounding the issue. Sigel, 2012 WL 2499551, at *8–11. Certainly, such an analysis
would have been unnecessary had we simply held that an explicit requirement in the statute
to disclose “ballots” was necessary, under any circumstances, to require their disclosure.
Instead, the only instance when we discussed the absence of an explicit mention of the term
“ballots” occurred when we hypothesized that had the Legislature chosen to use the term
“ballot” in the provisions regarding disclosure, the privacy interests considered would “no
doubt” give way to the plain language utilized by the statute. Id. at *11. This statement
does not, however, suggest that an explicit mention of ballots is the only method of
requiring their disclosure.
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Moreover, the Sigel panel’s statement that the statute would be interpreted
differently had different words been employed by the Legislature fully comports with our
familiar rules of statutory construction, in which unambiguous language is given primacy.
See Friedmann v. Marshall Cty., TN, 471 S.W.3d 427, 433 (Tenn. Ct. App. 2015) (quoting
Mills v. Fulmarque, Inc., 360 S.W.3d 362, 368 (Tenn. 2012) (citations omitted)) (“The
text of the statute is of primary importance, and the words must be given their natural and
ordinary meaning in the context in which they appear and in light of the statute’s general
purpose.”). In contrast, Defendants’ laser focus on the omission of a single word in the
statute does not. Specifically, Tennessee law provides that the meaning of a statute is not
be determined “from special words in a single sentence or section, but from the statute
taken as a whole and viewing the legislation in light of its general purpose.” State ex rel.
Bastnagel v. City of Memphis, 224 Tenn. 514, 519, 457 S.W.2d 532, 534 (Tenn. 1970).
As a result, the omission of the word “ballot” from the list of documents required to be
disclosed does not resolve this dispute, if other language in the statute unambiguously
mandates disclosure. Nor does the Nonprofit Act’s reference to “accounting records”
control the outcome here if other language unambiguously requires disclosure.
And we conclude that unambiguous language indeed provides for the disclosure of
ballots in this case. In particular, Plaintiff also relies on section 48-66-101(e)(4), which
states, “[a] corporation shall keep a copy of . . . . [t]he minutes of all meetings of members
and records of all actions approved by the members for the past three (3) years [at its
principal office.]” Plaintiff claims that under RBCAI’s governing documents, the annual
members meeting is the only mandatory meeting for members, and the only action the
members take at that meeting is electing the directors, which Defendants do not appear to
dispute. Therefore, Plaintiff contends, 48-66-101(e)(4) mandates that RBCAI “keep
records showing members voted in approval of the specific directors that [RBCAI] claims
won the director election.” Plaintiff argues that it is thus entitled to inspect the records of
actions approved by members and the board’s minutes under section 48-66-102(a), which
says:
Subject to § 48-66-103(c), a member is entitled to inspect and copy, during
regular business hours and at a reasonable location specified by the
corporation, any of the records of the corporation described in § 48-66-101(e)
if the member gives the corporation a written demand at least five (5)
business days before the date on which the member wishes to inspect and
copy.
In our view, section 48-66-101(e)(4)’s requirement that corporations keep for
inspection “records of all actions approved by the members” is “sufficient” to provide for
the disclosure of ballots in this case. Again, Defendants’ brief mentions this requirement,
but provides no specific argument as to the proper interpretation of this language. Unlike
the phrase “other records” as used in the Condominium Act, however, we conclude that
the phrase “records of all actions approved by the members” is clear and unambiguous.
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Importantly, the phrase “approved by the members” is a defined term in the
Nonprofit Act, as follows:
As used in chapters 51-68 of this title, unless the context otherwise requires:
‘Approved by (or approval by) the members’ means approved or ratified by
affirmative votes that exceed the number of negative votes represented and
voting at a duly held meeting at which a quorum is present or by a written
ballot or written consent in conformity with chapters 51-68 of this title or by
the affirmative vote, written ballot or written consent of such greater
proportions, including the votes of all the members of any class, unit or
grouping as may be provided in the charter, bylaws or chapters 51-68 of this
title for any specified member action[.]
Tenn. Code Ann. § 48-51-201(1). Consequently, when 48-66-101(e)(4) refers to “records
of all actions approved by the members,” it explicitly and specifically refers to records of
all actions voted for by members, including those actions voted for by written ballot over
the past three years. (Emphasis added). In other words, the records referred to necessarily
include election records, because the election of board members is an action that is
approved by member votes. It would be absurd to hold that while the Nonprofit Act requires
corporations to maintain records from its elections, these records do not include the ballots
utilized to affect the election. See State v. Flemming, 19 S.W.3d 195, 197 (Tenn. 2000)
(citing State v. Legg, 9 S.W.3d 111, 116 (Tenn. 1999)) (“[W]e will not apply a particular
interpretation to a statute if that interpretation would yield an absurd result.”).
Indeed, the definition of “approved by the members” explicitly mentions the use of
written ballots, indicating that ballots were contemplated as documents involved in the
approval of actions by members. And section 48-66-101(e)(4) states that records involved
in that approval are subject to preservation, with no provisions excluding ballots from the
ambit of that preservation requirement. Therefore, we interpret section 48-66-101(e)(4) as
a broad and unambiguous directive that corporations must maintain all records of an
election, including written ballots. Moreover, under section 48-66-102(a), a member is
entitled to inspect and copy “any of the records of the corporation described in § 48-66-
101(e),” subject to certain restrictions not at issue here. (Emphasis added). Taken together,
the Nonprofit Act’s use of the words “any” and “all” in sections 48-66-102(a) and 48-66-
101(e)(4) amounts to a broad preservation requirement and a correspondingly broad right
of inspection of records relating to elections.
In sum, the language of the Nonprofit Act is materially different from that found in
the Condominium Act, namely in that it is unambiguous. The Sigel panel’s resort to
legislative history and policy to determine whether disclosure of ballots was mandated by
the Condominium Act is therefore not warranted in this case. For the aforementioned
reasons, the logical reading of the Nonprofit Act is that the Legislature intended for
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nonprofit corporations to keep records of all actions voted for by members, including
ballots, and for members to be entitled to inspect those records using the procedure outlined
in section 48-66-102(a).5
Therefore, we affirm the trial court’s decision to compel the production of the 2019
election records, including ballots. We agree with the trial court’s reasoning with respect
to the Nonprofit Act in its order on Defendants’ motion to reconsider, i.e., “[t]he Records
and Reports chapter of the [] Act, found at Code Ann. § 48-66-101, et seq.[,] requires the
production of the Defendant nonprofit Association’s election records requested by Plaintiff
in this action, including all election ballots in un-redacted form . . . .”6
II.
We now turn to the issue of whether voters in this case have a right to privacy with
respect to their votes. Defendants argue that there is a fundamental expectation of privacy
in voting by written ballot, as this Court explained in Sigel. See 2012 WL 2499551, at *10
(citing 29 C.J.S. Elections § 322 (2012); 26 Am.Jur.2d Elections § 307 (2012)). Defendants
also argue that the Tennessee Constitution recognizes the right to vote secretly in elections,
5
We can find nothing else in the Nonprofit Act restricting the availability of election records,
including ballots, for inspection by members. Nowhere in the Nonprofit Act are the terms “ballot” or
“records” specifically defined. Section 48-57-108 specifies the contents of a ballot, but makes no reference
to whether ballots must be produced:
A ballot must:
(1) Be in the form of a document;
(2) Set forth each proposed action;
(3) Provide an opportunity to vote for, or withhold a vote for, each candidate for election
as a director; and
(4) Provide an opportunity to vote for or against or abstain from each proposed action.
Tenn. Code Ann. § 48-57-108(b).
6
We view the Nonprofit Act and the rules of discovery contained in the Tennessee Rules of Civil
Procedure as independent vehicles by which production of records may be sought (though, of course, the
rules of discovery only apply if records are sought in the course of litigation). Moreover, our review of the
first issue on this appeal is limited to an examination of the Nonprofit Act. Therefore, to the extent that the
trial court relied on the rules of discovery as grounds upon which production of the records in this case is
required, we express no opinion on that and affirm the trial court only based on the grounds explained
supra. See Barner v. Boggiano, 32 Tenn. App. 351, 222 S.W.2d 672, 677 (1949) (“It is well settled that if
there is any ground upon which a decree before the appellate court on a broad appeal can be affirmed, it
will be done, even though it be a different ground from that upon which the chancellor bases his decree.”).
Consequently, any issues or arguments raised by the parties regarding whether the rules of discovery require
production of the ballots are pretermitted.
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and that is the backdrop against which statutes should be interpreted, as this Court also
stated in Sigel. Id. at *10, 11. Defendants point to an example of another state court holding
that voters in a homeowners’ association had a right to privacy in their votes under the state
constitution, despite a state statute that gave a director on the association’s board the
“absolute right” to inspect “all . . . records and documents of every kind.” Chantiles v.
Lake Forest II Master Homeowners Assn., 37 Cal. App. 4th 914, 925, 45 Cal. Rptr. 2d 1,
7 (1995). Defendants concede, however, that in Sigel, this Court declined to follow the
Chantiles court and “extend the constitutional right to secrecy of the ballot to an election
for the board of directors for a condominium association.” 2012 WL 2499551, at *11
(citation omitted).
Plaintiff argues, inter alia, that the Nonprofit Act does not create privacy rights in
votes in director elections. Instead, because the Nonprofit Act allows, for example, voting
agreements between members, voting by proxy, and corporations to reject votes if there is
a reasonable basis to doubt that the signature on the vote is valid, Plaintiff argues that that
demonstrates that votes are not to be cloaked in secrecy. See Tenn. Code Ann. §§ 48-57-
205, -208, and -301. Additionally, Plaintiff avers that RBCAI’s governing documents also
do not create a privacy right in votes, as they do not require secret ballots; at most, the by-
laws authorize the board “to adopt election policies and procedures regarding the methods
of casting votes, such as written ballots, secret ballots, or computer access.” In addition,
Plaintiff points to section 48-66-102(d) of the Nonprofit Act, which states, “The right of
inspection granted by this section may not be abolished or limited by a corporation’s
charter or bylaws.” Plaintiff also avers that the 2019 ballots contained no indication that
they were confidential. However, according to Plaintiff, even if voters have a privacy
interest in their votes, the trial court’s protective order adequately protects that interest.
We begin our analysis of this issue by addressing Defendants’ constitutional
arguments. The provision of the Tennessee Constitution that Defendants rely on has been
utilized only to preserve a right to privacy in voting in state-sponsored elections: “In all
elections to be made by the General Assembly, the members thereof shall vote viva voce,
and their votes shall be entered on the journal. All other elections shall be by ballot.” Tenn.
Const. art. IV, § 4 (emphasis added); see also, e.g., Mooney v. Phillips, 173 Tenn. 398,
118 S.W.2d 224, 225 (1938) (discussing the state constitutional right to a secret vote,
created by Section 4 of Article 4 of the Tennessee Constitution, in the context of a state
statute that dealt with state elections). That is not what we have here. Instead, at issue is a
private nonprofit corporation’s election of its board of directors. Therefore, the state
constitutional right to a secret vote does not appear to apply. Indeed, a different panel of
this Court in Sigel “decline[d] to extend the constitutional right to secrecy of the ballot to
an election for the board of directors for a condominium association[.]” 2012 WL 2499551,
at *11 (citation omitted). We do the same here. We see no material difference between the
election for the board of directors of a condominium association, as was the case in Sigel,
and that of a property association, as is the case here, for the purpose of deciding whether
there is a privacy interest in the votes. They are each nongovernmental, private
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organizations, and the votes are not for public office. Therefore, we hold that the voters in
this case do not have a constitutional right to privacy with respect to their votes.
Nor do we interpret the Nonprofit Act as creating an absolute right of privacy in
election ballots. As we explained supra, the Nonprofit Act requires production of election
records, including ballots, for members’ inspection, pursuant to section 48-66-102(a).
Therefore, there is necessarily no absolute privacy right attached to those records.
However, section 48-66-102(a) only allows for members, not just any individual or entity,
to inspect the records. Thus, there is a privacy right attached to the election records, to an
extent. Other portions of the Nonprofit Act confirm this conclusion. For example, the
Nonprofit Act allows for inspection of ballots by inspectors appointed by the corporation:
(a) A corporation with members may appoint one (1) or more inspectors to
act at a meeting of members and make a report in the form of a document of
the inspectors’ determinations. Each inspector shall execute the duties of
inspector impartially and according to the best of the inspector’s ability.
(b) The inspectors shall:
(1) Ascertain the number of members and their voting power;
(2) Determine the members present at a meeting;
(3) Determine the validity of proxies and ballots;
(4) Count all votes; and
(5) Determine the result.
(c) An inspector may, but need not, be a director, member, officer, or
employee of the membership corporation. A person who is a candidate for
office to be filled at the meeting shall not be an inspector.
Tenn. Code Ann. § 48-57-209. This section clearly demonstrates that, if necessary, votes
can be inspected by multiple appointed people, from inside or outside of the corporation,
for the very purpose Plaintiff seeks the ballots here—to determine their validity. Thus, an
absolute privacy right does not attach to the votes, but there are also restrictions on what
the inspectors may do with the records. Along the same lines, section 48-66-104(a) states:
(a) If a corporation does not allow a member who complies with § 48-66-
102(a) to inspect and copy any records required by that subsection to be
available for inspection, a court of record having equity jurisdiction in the
county where the corporation’s principal office (or, if none in this state, its
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registered office) is located may summarily order inspection and copying of
the records demanded at the corporation’s expense upon application of the
member.
* * *
(d) If the court orders inspection and copying of the records demanded, it
may impose reasonable restrictions on the use or distribution of the records
by the demanding member.
This demonstrates an acknowledgement that privacy or other interests may require a court
to tailor the production of records, including ballots showing who members voted for.
These sections of the Nonprofit Act clearly show that the voters here do not have an
absolute right to privacy with respect to their votes, but that there are some constraints on
how the records of their votes may be used, and by whom. Thus, voters have a limited
privacy right with respect to their votes.
RBCAI’s governing documents likewise do not serve as a source of a privacy right.
Even if, arguendo, RBCAI could create an absolute right of privacy in the votes at issue,
it has not done so. But see Tenn. Code Ann. § 48-66-102(d) (prohibiting a corporation’s
governing documents from limiting members’ record inspection rights under section -102);
Section II, supra (explaining the clear legislative intent in the Nonprofit Act to create only
a limited privacy right in votes within a nonprofit corporation). Article 7.7 of RBCAI’s
bylaws provides, in pertinent part:
The Board may adopt policies and procedures regarding methods of casting
votes, such as written ballots, secret ballots, or computer access.
The fact that this article of the bylaws provides the option, but not a mandate, for votes to
be secret, shows that RBCAI’s governing rules do not afford voters an automatic right to
absolute privacy in their vote. In fact, the board apparently adopted an election policy and
procedure in 2012 in a document entitled Policy Resolution 10, where it specified, inter
alia, that voting would take place via ballots, but it did not specify that it would take place
by secret ballots. RBCAI argues that the term “ballot” denotes secrecy, but its own bylaws
specify that a ballot can be secret, meaning ballots are not necessarily secret solely by virtue
of being ballots. RBCAI also attempts to argue that the 2019 board election was, in fact,
secret, stating:
The procedures set out that a Member is first asked to sign in a book for each
lot the voting Member owns. A ballot is then given to the voting Member,
and the Member is directed to a voting room. A staff person is present in the
voting room to make sure no one enters unless there is an open voting area.
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Once the voting Member has voted, the voter is to fold and place the
Member’s ballot into a ballot box.
(Internal citations omitted). Respectfully, this procedure does not necessarily lead to the
conclusion that voters have an absolute right to privacy with respect to their votes. The
actual act of voting may take place in private, or the voting procedure may create an
expectation of privacy in the act of voting, but that does not mean that after the election,
the votes shall remain forever private. Additionally, Plaintiff contends, and Defendants do
not dispute, that in the 2019 election, only thirty-two ballots out of 1,010 total were cast in
person, with the remainder being voted early and “given to Monica at the office.”
Therefore, the above voting procedure, which Defendants assert demonstrates that the
election occurred in private, did not apply to the vast majority of votes cast in the election
at issue. Nor have Defendants pointed to any other evidence that persuades us that RBCAI
has a clear policy of keeping votes secret.
Defendants cite no other controlling sources for the right to privacy that they
contend must be applied in this context. Therefore, we hold that the voters here do not have
an absolute privacy right with respect to their votes. To hold otherwise would lead to the
absurd result that no member could ever contest the validity of an election in a nonprofit
corporation. However, as we have explained, just because there is no absolute privacy right
does not mean that anyone can inspect election records for any reason. The inspection has
to be done in accordance with the terms of the Nonprofit Act, as set forth above.
III.
The final issue, given that we have determined there is a limited privacy interest in
the votes, is whether the trial court’s protective order protects this limited privacy right.
Again, section 48-66-104(d) of the Nonprofit Act says, “If the court orders inspection and
copying of the records demanded [under section 48-66-102], it may impose reasonable
restrictions on the use or distribution of the records by the demanding member.” Thus, that
section appears to vest courts with discretion to impose reasonable restrictions on how a
member may use records. The trial court here exercised that discretion in entering the
protective order. When reviewing a trial court’s discretionary decision, we uphold the
decision
so long as reasonable minds can disagree as to propriety of the decision made.
A trial court abuses its discretion only when it applie[s] an incorrect legal
standard, or reache[s] a decision which is against logic or reasoning that
cause[s] an injustice to the party complaining. The abuse of discretion
standard does not permit the appellate court to substitute its judgment for that
of the trial court.
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Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001) (citations and quotation marks
omitted). Cf. In re NHC–Nashville Fire Litig., 293 S.W.3d 547, 560 (Tenn. Ct. App. 2008)
(“Generally, the granting, denying, or modifying of a protective order relating to discovery
procedures under Rule 26.03 rests within the sound discretion of the trial court.
Accordingly, the decision of a trial judge on a protective order is reviewed on appeal for
an abuse of discretion.”). The trial court’s decision to issue a protective order prohibiting
disclosure of whom voters cast their votes for, except as necessary to the litigation, was
reasonable.
Defendants appear to advocate for at least redacting the ballots, so that the identities
of voters and the candidates they voted for remain confidential. But redacting the ballots
would defeat the purpose of requiring their production—if a member cannot examine who
voted in an election and how they voted, there can be no way of validating the election
results. Instead, the trial court’s prohibition on disclosure of votes, except as necessary to
the litigation, furthers the purpose of the litigation—to determine the validity of the 2019
election results—without unnecessarily disclosing information that may be considered
sensitive. Therefore, the trial court did not abuse its discretion, and the protective order
adequately protects the limited privacy right voters have with respect to their votes.
CONCLUSION
The decision of the Chancery Court for Monroe County is affirmed. Costs of this
appeal are taxed to Appellants Michael Ayres, Amy Ayres, Clayton Wood, Doug Yoakley,
Kris Schuh, Jeff Laws, Jim Atchley, Denzil Theis, and Rarity Bay Community Association,
Inc., for which execution may issue if necessary.
S/J. Steven Stafford
J. STEVEN STAFFORD, JUDGE
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