What records must Utah nonprofit corporations disclose to members? Walker I Investments v. Sunpeak Association Explained

In Walker I Investments v. Sunpeak Association, the Utah Court of Appeals addressed the scope of member inspection rights under the Utah Revised Nonprofit Corporation Act, providing important guidance for practitioners representing both nonprofit corporations and their members.

Background and Facts

Walker I Investments owned property in a Park City subdivision and was consequently a member of Sunpeak Association, a nonprofit corporation. During ongoing litigation between the parties, Walker demanded access to various Association records, including annual meeting records, insurance policies, contracts, and notably, a membership list with email addresses and phone numbers. Walker asserted multiple purposes, including facilitating property sale, verifying legal compliance, and communicating with other members about Association operations. The Association produced some documents but refused to provide members’ contact information beyond names and addresses.

Key Legal Issues

The central issue was whether the Utah Revised Nonprofit Corporation Act required the Association to provide members’ email addresses and phone numbers when Walker had a proper purpose for accessing membership records. The secondary issue concerned whether Walker was entitled to attorney fees when the Association refused to produce certain records.

Court’s Analysis and Holding

The Court of Appeals applied correctness review to the statutory interpretation question. The court held that Utah Code Section 16-6a-1603(4) allows nonprofit corporations to satisfy membership record demands by furnishing a list containing “the name and address of all members.” Since the Association provided names and addresses, it complied with the statutory requirement without needing to disclose email addresses or phone numbers. Regarding attorney fees, the court applied clear error review to the district court’s good faith finding and affirmed the denial of fees, concluding the Association had a reasonable basis for doubt about Walker’s inspection rights.

Practice Implications

This decision establishes important boundaries for nonprofit corporation record access. The Act creates three categories of records with different access requirements, and practitioners must carefully analyze which category governs their client’s request. Judge Voros’s partial dissent provides valuable insight into the “directly connected” standard for accessing broader corporate records under section 16-6a-1602(2). For nonprofit corporations, this decision provides some protection against overly broad member demands, while for members, it emphasizes the need to precisely tailor record requests to applicable statutory provisions.