Eastwood v. Horse Harbor Foundation, Inc., 170 Wash. 2d 380 (2010)

Citation: Eastwood v. Horse Harbor Foundation, Inc., 170 Wash. 2d 380 (2010)
Parent Document: Eastwood v. Horse Harbor Foundation, Inc., 170 Wash. 2d 380 (2010)
Jurisdiction: Washington (state)
Effective Date: 2010-11-04
Original Source: https://www.courtlistener.com/opinion/4909141/eastwood-v-horse-harbor-foundation-inc/ ↗

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¶40 RCW 4.24.264(1) provides that “a member of the board of directors or an officer of any nonprofit corporation is not individually liable for any discretionary decision or failure to make a discretionary decision within his or her official capacity as director or officer unless the decision or *401failure to decide constitutes gross negligence.” The question is whether the actions or omissions of the Dalings, acting as directors of the Horse Harbor nonprofit corporation, “constitute [d] gross negligence” within the meaning of RCW 4.24.264(1).6 The Court of Appeals held RCW 4.24.264 is a complete limitation on individual director’s liability for a nonprofit corporation’s breach of contract, and only torts could meet the “gross negligence” exception. Eastwood, 2008 WL 1801332, at *2,2008 Wash. App. LEXIS 916, at *4. According to the Court of Appeals, the trial court erred by holding the Dalings liable because the trial court made a nonprofit corporate director “individually liable where a breach of contract rose to gross negligence.” 2008 WL 1801332, at *2, 2008 Wash. App. LEXIS 916, at *6. But the trial court imposed liability on the Dalings only for gross negligence in permitting waste, not for breach of contract:

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