Eastwood v. Horse Harbor Foundation, Inc., 241 P.3d 1256 (2010)

Citation: Eastwood v. Horse Harbor Foundation, Inc., 241 P.3d 1256 (2010)
Parent Document: Eastwood v. Horse Harbor Foundation, Inc., 241 P.3d 1256 (2010)
Jurisdiction: Washington (state)
Effective Date: 2010-11-04
Original Source: https://www.courtlistener.com/opinion/2372386/eastwood-v-horse-harbor-foundation-inc/ ↗

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¶ 36 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 failure to decide constitutes gross negligence." The question is whether the actions or omissions of the Dalings, acting as directors of *1268 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 directors' liability for a nonprofit corporation's breach of contract, and only torts could meet the "gross negligence" exception. Eastwood, 144 Wash.App. 1009, 2008 WL 1801332, at *2. 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." Id. 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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