| Tae Hwa Yoon v New York Hahn Wolee Church, Inc. |
| 2008 NY Slip Op 09380 [56 AD3d 752] |
| November 25, 2008 |
| Appellate Division, Second Department |
| Tae Hwa Yoon, Appellant, v New York Hahn WoleeChurch, Inc., et al., Respondents. |
—[*1] Eileen West, Pleasantville, N.Y., for respondents.
In an action, inter alia, pursuant to Not-For-Profit Corporation Law § 621 to compelthe production of certain books and records of the defendant New York Hahn Wolee Church,Inc., pursuant to Not-For-Profit Corporation Law § 720 to compel the defendants ChungWhan Kim, Jung Ho Choi, Hun Kyu Kim, and Jee Ho Kim to account for certain allegedmisconduct, and for a judgment declaring that the defendants Chung Whan Kim, Jung Ho Choi,Hun Kyu Kim, and Jee Ho Kim engaged in certain unlawful conduct, the plaintiff appeals, aslimited by his brief, from so much of an order and judgment (one paper) of the Supreme Court,Westchester County (Lefkowitz, J.), dated July 31, 2007, as, upon a decision of the same courtdated July 11, 2007, in effect, granted that branch of the defendants' motion which was pursuantto CPLR 3211 (a) (2) to dismiss the complaint, dismissed the complaint, and declared, inter alia,that the alleged conduct of the defendants Chung Whan Kim, Jung Ho Choi, Hun Kyu Kim, andJee Ho Kim was not unlawful.
Ordered that the order and judgment is modified, on the law, (1) by deleting the provisionthereof, in effect, granting that branch of the defendants' motion which was pursuant to CPLR3211 (a) (2) to dismiss so much of the first cause of action as was pursuant to Not-For-ProfitCorporation Law § 621 to compel the production of certain books and records of thedefendant New York Hahn Wolee Church, Inc., and substituting therefor a provision denying thatbranch of the motion, and (2) deleting the provision thereof declaring, inter alia, that the allegedconduct of the defendants Chung Whan Kim, Jung Ho Choi, Hun Kyu Kim, and Jee Ho Kim wasnot unlawful; as so modified, the order and judgment is affirmed [*2]insofar as appealed from, without costs or disbursements, and somuch of the first cause of action as was pursuant to Not-For-Profit Corporation Law § 621to compel the production of certain books and records of the defendant New York Hahn WoleeChurch, Inc., is reinstated, severed, and converted into a special proceeding pursuant toNot-For-Profit Corporation Law § 621 to determine whether the plaintiff is entitled to theproduction of those books and records.
In November 2006, the plaintiff, a member and former trustee and officer of the defendantnot-for-profit corporation New York Hahn Wolee Church, Inc. (hereinafter the Church),commenced the instant action against the Church, its pastor, and several of its trustees. Allegingthat the individual defendants diverted or misappropriated Church funds, the plaintiff assertedcauses of action, inter alia, pursuant to Not-For-Profit Corporation Law § 621 to compelthe production of the Church's books and records, pursuant to Not-For-Profit Corporation Law§ 720 to compel the individual defendants to account for their alleged misconduct, toenjoin the individual defendants from accessing certain Church funds, and for a judgmentdeclaring, among other things, that the election of the trustee who replaced him and theinstallation of a new Church pastor were accomplished in violation of the Church's bylaws.
The defendants moved, inter alia, pursuant to CPLR 3211 (a) (2), (3) and (5) to dismiss thecomplaint. The Supreme Court essentially concluded that it lacked subject matter jurisdictionover this action because the issues presented could not be resolved by resort to neutral principlesof law (see Matter of Congregation Yetev Lev D'Satmar, Inc. v Kahana, 9 NY3d 282,286 [2007]). Thus, in the order and judgment appealed from, the Supreme Court, in effect,granted that branch of the defendants' motion which was pursuant to CPLR 3211 (a) (2) todismiss the complaint, dismissed the complaint, and declared, inter alia, that the alleged conductof the defendants Chung Whan Kim, Jung Ho Choi, Hun Kyu Kim, and Jee Ho Kim was notunlawful. We modify.
The Supreme Court erred in dismissing so much of the first cause of action as was pursuantto Not-For-Profit Corporation Law § 621 to compel the production of the Church's booksand records. Not-For-Profit Corporation Law § 621 authorizes any person who is amember of a not-for-profit corporation for at least six months immediately preceding anunsuccessful demand to inspect the corporation's books and records to commence a specialproceeding to compel the production of those books and records (see N-PCL 621 [b],[d]). Contrary to the Supreme Court's determination, the issue of whether the plaintiff, who seeksto enforce a statutory right, is entitled to the production of the Church's books and records, can bedetermined by resort to neutral principles of law (see CPLR 3211 [a] [2]; Matter ofCongregation Yetev Lev D'Satmar, Inc. v Kahana, 9 NY3d at 286; First Presbyt. Churchof Schenectady v United Presbyt. Church in U.S. of Am., 62 NY2d 110, 116-118 [1984];cf. Watson v Christie, 288 AD2d 29 [2001]). Furthermore, while the defendants relied ona decision from a particular tribunal, which, they essentially asserted, was decisive of that issue,under the circumstances, that decision is not entitled to any res judicata or collateral estoppeleffect (see CPLR 3211 [a] [5]; cf. First Presbyt. Church of Schenectady v UnitedPresbyt. Church in U.S. of Am., 62 NY2d at 121). Finally, we note that the defendants didnot contest the plaintiff's standing to maintain a cause of action pursuant to Not-For-ProfitCorporation Law § 621 (see CPLR 3211 [a] [3]; cf. Matter of Smith v CalvaryBaptist Church, 35 AD3d 749, 750 [2006]).
However, we find that the remainder of the first cause of action, as well as the second andthird causes of action, were properly dismissed, albeit for reasons different from those relied onby the Supreme [*3]Court. In this regard, the defendantsestablished that the plaintiff lacked standing to assert the remaining causes of action (seeCPLR 3211 [a] [3]). Since the record clearly demonstrates that the plaintiff seeks tovindicate the Church's rights by asserting those causes of action, the causes of action had to be,but were not, asserted in the context of a derivative action brought by at least 5% of the Church'smembers (see N-PCL 623 [a]; 720; Clark v Trois, 21 AD3d 439, 439-440 [2005];Bernbach v Bonnie Briar Country Club, 144 AD2d 610 [1988]). In addition, thecomplaint fails to set forth with particularity the efforts of the plaintiff to secure the initiation of aderivative action by the Church's Board of Trustees or the reason for not making such effort(see N-PCL 623 [c]; Clark v Trois, 21 AD3d at 440; Tomczak v Trepel,283 AD2d 229, 229-230 [2001]; see also Bansbach v Zinn, 1 NY3d 1, 8-9 [2003];Marx v Akers, 88 NY2d 189, 199-200 [1996]).
Although the plaintiff did not bring this action as a special proceeding pursuant toNot-For-Profit Corporation Law § 621 to compel the production of the Church's books andrecords, "[g]enerally, where an action or proceeding is brought in the wrong form or under aninappropriate statute, the court, in its discretion, may deem it brought in a proper fashion, thusavoiding a dismissal" (Matter of Schmidt [Magnetic Head Corp.], 97 AD2d 244, 250[1983]; see CPLR 103 [c]; see also Port Chester Elec. Constr. Corp. v Atlas, 40NY2d 652, 653 [1976]). Accordingly, we convert this action into a special proceeding pursuantto Not-For-Profit Corporation Law § 621 to determine whether the plaintiff is entitled tothe production of the Church's books and records (cf. Esformes v Brinn, 52 AD3d 459,462-463 [2008]).
The plaintiff's remaining contentions are without merit. Santucci, J.P., Covello, Leventhaland Belen, JJ., concur.