Council of Chinese Am. Assns., Inc. v American Shaanxi Gen. Chamber of Commerce Inc.
Annotate this CaseDecided on October 3, 2011
Supreme Court, Queens County
Council of Chinese American Associations, Inc., Plaintiff,
against
American Shaanxi General Chamber of Commerce Inc. et al., Defendant.
6794/2011
For the Plaintiff:
The Law Offices of Perry Ian Tischler, P.C., by Perry Ian Tischler, Esq., 38-39 Bell Blvd., Bayside, New York 11361
For the Defendants:
Law Office of Mark C. Fang, by Mark C. Fang, Esq., 75 South Broadway, White Plains, New York 10601
Charles J. Markey, J.
Plaintiff Council of Chinese-American Associations, Inc. ("CCAA") is a not-for- profit [*2]corporation which acts as an umbrella organization for numerous Chinese-American civic and professional associations based in New York. The organization has 34 members, including the 19 defendants. CCAA's by-laws state that the Presidium, composed of the President, Chairman, or similar official from the member organizations, "shall be the highest executive authority of the Council."
Zhu Lichuang was elected executive chairman of CCAA in March, 2009, and the defendants subsequently became dissatisfied with his leadership.
The bylaws of CCAA, as translated by the defendants, in relevant part, provide:
Article 8. Election
1. An Annual Members' Meeting of the Council shall be held in November of each year. The Members Meeting shall nominate and elect an Election Committee to be composed of 3 to 5 members to take charge of specific election affairs.
* * * * *
3. Representatives of members must be present at Members' Meeting in person to cast a vote in elections.
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5.More than half of the members of the Council must be present in the election meeting in order to constitute a quorum for elections.
6. A candidate shall be elected by votes of more than half of those present in the election meeting.
* * * * *
Article 10. Meetings
1. Members' Meetings (i.e., meetings of the Presidium) shall be held not less than once each year.
2.The Executive President may call upon a Members' Meeting when necessary.
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4. A Notice of Members' Meeting or Meeting of the Board of Directors shall be distributed by the Secretariat one week in advance (except for extraordinary situations). . . .
No election was called for November, 2010, and 22 members of CCAA decided to hold a special meeting and election on January 31, 2011. The Court notes that the dissident faction did not resort to an Article 78 proceeding in the nature of mandamus to compel the holding of a meeting and election (see, Silver v. Farrell, 113 Misc 2d 443 [Sup Ct Monroe County 1982]). A written notice was sent one week prior to the special meeting and election to every member of CCAA. Twenty-two members of CCAA attended the January 31, 2011 meeting, and they purportedly elected Dian Kui "David" Su as Executive President of CCAA, "Jimmy" Ji Jun Yi as Executive Vice President, and Ye Dong as a second Executive Vice President.
After the election, Zhu Lichuang's attorney sent a letter dated March 7, 2011, to the defendants, purporting to suspend their membership in CCAA for failure to pay their membership dues.
On March 20, 2011, the faction opposing the defendants purportedly held an election for offices in CCAA, but only 11 individuals attended the meeting, and allegedly only six of the 11 were authorized to represent members of CCAA. Those members attending the meeting purportedly elected Gang "Gary" Xie as Chairman, Da Kai Xu as vice chairman, and Mei Chen as a second vice chairman.
Plaintiff CCAA has moved for a preliminary injunction, inter alia, prohibiting the defendants from identifying themselves as members of CCAA. Defendants have made a cross motion, as construed by the Court, seeking summary judgment on their counterclaim for a declaratory judgment.
Section 618 of the Not-for-Profit Corporation Law, entitled "Power of supreme court respecting elections," provides:
Upon the petition of any member aggrieved by an election and upon notice to the persons declared elected thereat, the corporation and such other persons as the court may direct, the supreme court at a special term held within the judicial district where the office of the corporation is located shall forthwith hear the proofs and allegations of the parties, and confirm the election, order a new election, or take such other action as justice may require.
See, Jackson v. First Dist. Dental Soc., 240 AD2d 265 [1st Dept. 1997].
This Court, pursuant to Not—for—Profit Corporation Law section 618, has the authority to determine the validity of the corporate elections held by the rival CCAA factions
(Esformes v. Brinn, 52 AD3d 459 [2nd Dept. 2008]). This Court also has the authority to set aside a corporate election if not conducted in accordance with corporate by-laws or statutory requirements or other legalities (see, Trustees of Gallilee Pentecostal Church, Inc. v. Williams, [*4]65 AD3d 1221 [2nd Dept. 2009]; Application of Kaminsky, 251 App. Div. 132 [4th Dept. 1937], aff'd, 277 NY 524 [1938]; Singh v. 74th Street Merchants Ass'n, Inc., 25 Misc 3d 1224(A), 2009 WL 3790203, 2009 NY Slip Op 52286(U) [Sup Ct Queens County 2009] [decision by the undersigned]; Azzi v. Ryan, 120 Misc 2d 121 [Sup Ct Queens County 1983]). Indeed, "the court has broad equitable powers and may direct a new election where the election under review is so clouded with doubt or tainted with questionable circumstances that the standards of fair dealing require the court to order a new, clear and adequate expression'" (Faraldo v. Standardbred Owners Ass'n, Inc., 63 AD2d 1010 [2nd Dept. 1978] [quoting cases].
The motions and claims before the Court, on the foregoing papers, cannot be determined without examining the legality of the rival elections held on January 31, 2011, and March 20, 2011. Indeed, the defendants' first counterclaim expressly demands a declaratory judgment concerning the validity of the meeting and election conducted on January 31, 2011, and the rival election conducted on March 20, 2011. The defendants' second counterclaim, based on Not-for-Profit Corporation Law section 618, seeks a judgment determining the validity of the two elections. Not-for-Profit Corporation Law section 618 requires notice to "the persons declared elected" (see, Esformes v. Brinn, 52 AD3d 459, supra; In re Uranian Phalanstery 1st New York Gnostic Lyceum Temple, 155 AD2d 302 [1st Dept. 1989]). No less notice is required because the parties have chosen to utilize procedural forms other than the special proceeding contemplated by Not-for-Profit Corporation Law section 618. Those individuals purportedly elected at the rival elections should be given notice by being joined as parties.
The plaintiff's motion, accordingly, is denied without prejudice to renewal upon the joinder as defendants of those purportedly elected on January 31, 2011. The defendants' cross-motion is denied without prejudice to renewal upon the joinder as counterclaimants of those purportedly elected on January 31, 2011, and, as counterclaim defendants of those purportedly elected on March 20, 2011.
The foregoing constitutes the decision, order, and opinion of the Court.
J.S.C.
Dated: October 3, 2011
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