§ 58-24-35. No personal liability.
§58‑24‑35. No personal liability.
(a) The officers andmembers of the supreme governing body or any subordinate body of a societyshall not be personally liable for any benefits provided by a society.
(b) Any person may beindemnified and reimbursed by any society for expenses reasonably incurred by,and liabilities imposed upon, such person in connection with or arising out ofany action, suit or proceeding, whether civil, criminal, administrative orinvestigative, or threat thereof, in which the person may be involved by reasonof the fact that he or she is or was a director, officer, employee or agent ofthe society or of any firm, corporation or organization which he or she servedin any capacity at the request of the society. A person shall not be soindemnified or reimbursed (1) in relation to any matter in such action, suit orproceeding as to which he or she shall finally be adjudged to be or have beenguilty of breach of a duty as a director, officer, employee or agent of thesociety or (2) in relation to any matter in such action, suit or proceeding, orthreat thereof, which has been made the subject of a compromise settlement;unless in either such case the person acted in good faith for a purpose theperson reasonably believed to be in or not opposed to the best interests of thesociety and, in a criminal action or proceeding, in addition, had no reasonablecause to believe that his or her conduct was unlawful. The determinationwhether the conduct of such person met the standard required in order tojustify indemnification and reimbursement in relation to any matter describedin subpoints (1) or (2) of the preceding sentence may only be made by thesupreme governing body or board of directors by a majority vote of a quorumconsisting of persons who were not parties to such action, suit or proceedingor by a court of competent jurisdiction. The termination of any action, suitor proceeding by judgment, order, settlement, conviction, or upon a plea of nocontest, as to such person shall not in itself create a conclusive presumptionthat the person did not meet the standard of conduct required in order tojustify indemnification and reimbursement. The foregoing right ofindemnification and reimbursement shall not be exclusive of other rights to whichsuch person may be entitled as a matter of law and shall inure to the benefitof his or her heirs, executors and administrators.
(c) A society shallhave power to purchase and maintain insurance on behalf of any person who is orwas a director, officer, employee or agent of the society, or who is or wasserving at the request of the society as a director, officer, employee or agentof any other firm, corporation, or organization against any liability assertedagainst such person and incurred by him or her in any such capacity or arisingout of his or her status as such, whether or not the society would have thepower to indemnify the person against such liability under this section.
(d) A person serving asan officer or a member of a supreme governing body of a society shall be immuneindividually from civil liability for monetary damages, except to the extentcovered by insurance, for any act or failure to act, except where the person:
(1) Is compensated forhis services beyond reimbursement for expenses,
(2) Was not actingwithin the scope of his official duties,
(3) Was not acting ingood faith,
(4) Committed grossnegligence or willful or wanton misconduct that resulted in the damage orinjury,
(5) Derived an improperpersonal financial benefit from the transaction,
(6) Incurred theliability from the operation of a motor vehicle, or
(7) Is sued in an actionthat would qualify as a derivative action if the organization were a for‑profitcorporation or as a member's or director's derivative action under G.S. 55A‑28.1or G.S. 55A‑28.2 if the organization were a nonprofit corporation.
The immunity in thissubsection is personal to the individual officers and members of the supremegoverning body and does not immunize the organization for the acts or omissionsof those officers or members. (1987, c. 483, s. 2, c. 799,s. 2.)