DePrima v. Lark St. Neighborhood Dist. Mgmt. Ass'n, Inc.
| Decision Date | 10 October 2012 |
| Docket Number | No. 3234–12.,3234–12. |
| Citation | 961 N.Y.S.2d 357,2012 N.Y. Slip Op. 51999,37 Misc.3d 1211 |
| Parties | Robert A. DePRIMA, Petitioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules v. LARK STREET NEIGHBORHOOD DISTRICT MANAGEMENT ASSOCIATION, INC. f/k/a Lark Street Area District Management Association, Inc.; Matthew Badalucco; Christopher Schloss; Jerry Aumand; Mark Brogna; Elissa Halloran; and Mary Spinelli, Respondents. |
| Court | New York Supreme Court |
OPINION TEXT STARTS HERE
Law Office of John T. Keenan, III, Esq. by John T. Keenan, III, Esq., Albany, Attorneys for Petitioner.
Dowling Law PLLC by Joanmarie M. Dowling, Esq., Albany, Attorneys for Respondents.
Petitioner is a member of the Board of Directors of the Respondent Lark Street Neighborhood District Manangement Association Inc. f/k/a Lark Street Area District Management Association Inc. (hereinafter, DMA).Respondent Matthew Baddalucco is a former Director and immediate past Chairman of the DMA, Christopher Schloss is the current Chairman. Respondents Jerry Aumand, Mark Brogna, and Elissa Halloran currently serve as Directors and Officers of the DMA, and respondent Mary Spinelli served as its Executive Director.
On December 2, 2011, petitioner and Ms. Spinelli were involved in a “dispute” at the DMA offices, which are located next door to residential property managed by petitioner. According to petitioner, after he received a telephone call from a tenant who reported that there was a “strange man” on his fire escape, he called Spinelli, “to question her about any knowledge she may have about the trespasser”. After Spinelli “hung up the telephone on [him]”, petitioner went to the DMA office “to inquire as to the identity of the man who was on the fire escape and the reason for the trespass”. As petitioner explains it:
Spinelli loudly and repeatedly demanded that I leave the DMA office, and when I refused to do so until Spinelli answered my questions, Spinelli called the Albany Police complaining that I was trespassing at the premises and menacing her.
A Directors meeting was held on January 30, 2012. The meeting agenda included the item, “Events of Friday 12/2/2011”. Petitioner alleges that although another director told him that the meeting was scheduled and that the “dispute” was on the agenda, he was not provided notice of the meeting and did not receive the agenda until the day of the meeting. He retained an attorney to accompany him to the meeting and, over his objection based on insufficient notice, the Board proceeded with the meeting but ultimately decided not to address the “dispute” without first obtaining their own counsel.
On February 1, 2012, the DMA Board published notice of a Director's meeting to be held on February 9, 2012. Petitioner explains that because the agenda did not include an item titled “Events of Friday 12/2/2011”, he attended the February 9, 2012 meeting without counsel.The “dispute” was raised as “New Business” at the February 9, 2012 meeting. At that meeting, the Chairman made a motion “[t]o suspend [petitioner's] membership on the board for actions that were reckless and that the suspension would stay in place unitl the Board votes to overturn the suspension or the No Trespass Order is lifted” (Meeting Minutes).
Following the February 9, 2012 meeting, the petitioner and newly elected Chairman Schloss agreed to participate in non-binding mediation to attempt to resolve the dispute. Spinelli also attended the mediation held on April 1, 2012.Petitioner contends that as a result of the mediation, the participants agreed that he would be restored as Director and that he would be provided access to the DMA's records.There was no agreement with regard to petitioner's legal fees.At a Director's meeting on April 26, 2012, petitioner contends that he was identified as a “guest” and not allowed to vote on any resolutions. Schloss made a motion to “lift” petitioner's suspension on the condition that he agree to not contact the DMA staff, not access the DMA office, and to obtain prior approval before raising issues for discussion at Board meetings.Petitioner avers that he would not agree unless the conditions were placed on all other Directors. According to petitioner, in early May 2012, he learned that his name was removed from the list of Directors on the DMA's website and the DMA still had not allowed access to its records.
Petitioner commenced the instant proceeding to challenge the DMA's actions following the December 2, 2011 event. Specifically, he challenges the Resolution suspending him and the Resolution “lifting” the suspension with conditions. He also seeks an Order declaring that certain bylaws adopted by the DMA are invalid; directing the DMA to “re-insert petitioner's name as an active director of the corporation on all media in which the list of directors may appear”, and directing the DMA to allow petitioner to examine its books and records. Finally, petitioner seeks an award of legal fees.
In response to the petition, the respondents do not oppose petitioner's request for a declaration that Article III, Section 7(b) of its bylaws is invalid.Respondents also claim that the DMA Board acted in good faith when it temporarily suspended petitioner, and that petitioner's name has since been restored to the list of Directors on the DMA's website (Dowling Affirmation ¶ 4).Further, according to respondents, petitioner was reinstated as a Director at its April meeting, but there was no Resolution imposing conditions on his reinstatement as a Director. Respondents oppose petitioner's request for access to DMA's books and records and for attorneys fees. The crux of respondents' opposition to the petition is that petitioner lacks standing to challenge his suspension or demand access to the DMA's books and records.
The Respondent DMA is a domestic not for profit corporation organized pursuant to Article 6 of the Not for Profit Corporation Law (hereinafter NFPCL), “[t]o execute the responsibilities of a district management association as set forth in Article 19 A of the General Municipal Law” (see DMA Bylaws Exhibit A). In accordance with General Municipal Law § 980–m and NFPCL § 601, the DMA has five voting classes of membership, including, as relevant here, a Class D member, defined as a residential tenant who occupies real property located in the district pursuant to a lease (Bylaws Article II, Section 1(D)).In January 2010, petitioner, a class D member, was elected to serve as one of the fifteen directors on the DMA's managing Board of Directors.
The NFPCL requires non-profit corporations to keep
“correct and complete books and records of account and minutes of the proceedings of its members, board and executive committee ... [and] a list or record containing the names and addresses of all members, the class or classes of membership or capital certificates and the number of capital certificates held by each and the dates when they respectively became the holders of record thereof”
(NFPCL 621(a)).A qualified member is authorized, upon at least five days written demand, “to examine in person ... during usual business hours ... minutes of the proceedings of its members and list or record of members, and to make extracts therefrom” (NFPCL 621(b)). If, upon request, the non-profit refuses to allow inspection of its minutes or of the list of members, the requesting member may seek an Order directing the non-profit to allow inspection, “if it appears that the applicant is qualified and entitled to such inspection” (NFPCL 621(d)).Also, a member, upon written request, is entitled to receive “an annual balance sheet and profit and loss statement or a financial statement performing a similar function for the preceding fiscal year” (NFPCL 621(e)).
Now, respondent contends that petitioner is not entitled to inspect DMA's records under NFPCL 621 because, “upon information and belief, [he] has not established his eligibility for Class D membership” (Memorandum of Law Point I; Respondents' Verified Answer—Second Defense).Further, respondents argue that petitioner's request was made in “bad faith” and seek a protective order limiting petitioner's “ability to abuse this information”, that is, that he be prohibited from “record[ing] or copy[ing] social security numbers or bank account numbers and ... directed [to] use the information only in accordance with his fiduciary duties to the organization” (Memorandum of Law p. 20).
Based on the record before the Court, petitioner has demonstrated that he is a member of the DMA entitled to seek relief pursuant to NFPCL 621. The DMA's bylaws provide that a Class D membership of the Association is available for those “who are occupants pursuant to leases of residential spaces within the District” (Article II, Section 1(D)).A person seeking Class D membership, “shall be eligible for membership in the Corporation upon submission to the Secretary of evidence of such qualification satisfactory to the Board” (Article II, Section I(E)).Although specific documentary evidence with regard to petitioner's membership is not provided, he avers that he submitted an application for membership, together with a copy of his lease, prior to his election as a Director. Petitioner's application was granted, he was elected as Director, and the DMA has not sought to terminate his membership with the DMA or otherwise disqualify him from further participation as a member of the Board based on its belief that he lacks the requisite qualifications 1. By his affidavit, petitioner confirms that he is a tenant in the District, pursuant to the terms of a lease agreement that was produced when he initially applied for membership and has since expired.
As a member of the DMA, petitioner has standing to seek the requested relief, provided that his request was made in good faith and for a proper purpose (Smith v. Calvary Baptist Church, 35 AD3d 749 [2006];Watson v. Christie, 288 A.D.2d 29 [2006] ). Here, p...
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