THE RESOURCE CENTER v. NYSARC INC (2009)

After many months of attempting to resolve the issues underlying this action, and despite several conferences among the parties, their representatives and the Court, the parties recently advised the Court that further efforts in this regard would be futile.

Plaintiff, The Resource Center (“TRC”), was formed in September 1958 under the name “Parents and Friends of Retarded Children”. In November 1959, TRC affiliated with New York State Association for Retarded Children, now known as NYSARC, Inc. (“NYSARC”). As such, TRC became known as the Chautauqua County Chapter of NYSARC. TRC commenced this action seeking a declaration that: it is an unincorporated association; its members and directors control the Chapter's affairs; it has the right to, and has disaffiliated from NYSARC; and it owns the real property, facilities and equipment used to provide programs and services to individuals with developmental and mental disabilities in Chautauqua County.

In response, NYSARC seeks a declaration, inter alia, that if TRC intends to leave NYSARC, then it must abide by NYSARC's By–Laws and Chapter Manual regarding withdrawal and surrender of its Chapter Certificate of Recognition. In so doing, (NYSARC contends that) TRC must turnover all assets and programs in Chautauqua County, which NYSARC will then continue to use, and run for the benefit of those individuals previously served by TRC in Chautauqua County.

The parties have each moved for summary judgment on the a foregoing issues—each acknowledging no genuine issues of material fact exist, such as to preclude judgment as a matter of law.

A covenant to associate with a corporation, and in this case a decision made some forty-nine years ago, cannot be so easily dismissed. TRC, as a local Chapter (no matter what structure it might be and/or what efforts it put forth to develop programs and assets it operates for NYSARC), must be kept to the rules to which it agreed to abide. (See, Central N.Y. Bridge Ass'n v. Amer. Contr. Bridge League, Inc., 72 Misc.2d 271, 339 N.Y.S.2d 438 [Sup Ct. Oswego County 1972] ) If a Chapter decides to sever all ties with NYSARC, NYSARC's rules require the board of directors of that Chapter to surrender the Certificate of Recognition and deliver it to NYSARC.

Now, upon all the pleadings and proceedings had herein, and upon due deliberation thereon; it is hereby

ORDERED, that TRC's motion is denied, and NYSARC's motion is granted; and it is further

ORDERED, that all assets and programs shall be retained, and utilized by NYSARC in Chautauqua County, for the benefit of the children and adults formally served by TRC, in the event TRC continues in its efforts to disaffiliate; and it is further

ORDERED, that in the event TRC continues in its efforts to disaffiliate, it shall do so in accordance with this Decision and Order.

This constitutes the Decision and Order of this Court. Submission of an order by the Parties is not necessary. The mailing of a copy of this Decision and Order by this Court shall not constitute notice of entry.

TIMOTHY J. WALKER, J.