|Johnson v Black Equity Alliance, Inc.|
|2010 NY Slip Op 50178(U) [26 Misc 3d 1219(A)]|
|Decided on January 21, 2010|
|Supreme Court, New York County|
|Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.|
|This opinion is uncorrected and will not be published in the printed Official Reports.|
Joyce S. Johnson, Plaintiff,
Black Equity Alliance, Inc., DR. BILLY E. JONES, in his individual and representative capacity, KARL B. RODNEY, in his individual and representative capacity, EMORY BROOKS, in his individual and representative capacity, DR. JAMES R. DUMPSON, in his individual and representative capacity, MONIQUE MYLES, in her individual and representative capacity, STEPHANIE PALMER, in her individual and representative capacity, MARY D. REDD, in her individual and representative capacity, BRENDA SCOTT, in her individual and representative capacity, CHERYLE A. WILLS, in her individual and representative capacity, and DR. RANDY CREW, in his individual and representative capacity, Defendants.
In this pre-answer motion, defendants Dr. Billy E. Jones, Karl B. Rodney,
Emory Brooks, Dr. James R. Dumpson, Stephanie Palmer, Mary D. Redd, Brenda Scott, Cheryle
A. Wills, and Dr. Randy Crew (collectively, Individual Defendants) move, pursuant to CPLR
3211 (a) (7) and (a) (11), to dismiss the complaint as against them, and defendant Black Equity
Alliance, Inc. (Black Equity) moves, pursuant to CPLR 3211 (a) (7), to dismiss the third and
fourth causes of action as against it.
Plaintiff Joyce S. Johnson is the former President and Chief Executive Officer of Black Equity, as well as one of its directors. The Individual Defendants are all members of the board of directors of Black Equity, which is a not-for-profit organization.
Plaintiff, who has a long history of political involvement, [*2]was hired by Black Equity on or about March 3, 2008, as an at-will employee (see, Jones reply aff. Exhibit "D"). On or about March 21, 2009, plaintiff indicated her intention to support Mayor Michael Bloomberg, in her individual capacity, in his bid for a third mayoral term. Thereafter, on March 22, 2009, plaintiff appeared with other individuals at a press conference when they announced their support for Mayor Bloomberg. Plaintiff alleges that she specifically refused to speak at the press conference to ensure that there would be no confusion about the fact that she was supporting Mayor Bloomberg in her personal capacity, and that it was not an endorsement of the Mayor by Black Equity. However, the press reports of the event identified plaintiff's affiliation with Black Equity.
After the press conference, plaintiff was informed by several of the Individual Defendants that it would not "look good" for Black Equity to endorse Mayor Bloomberg because he is white and Jewish. Complaint, ¶ 37. Black Equity is primarily an African-American organization. Plaintiff was later informed by defendant Karl B. Rodney that he would recommend to the board that plaintiff's employment be terminated. Allegedly, defendant Mary D. Redd indicated to plaintiff that plaintiff's endorsement of Mayor Bloomberg might jeopardize Black Equity's tax exempt status as an organization organized under section 501 (c) (3) of the Internal Revenue Code, which prohibits such entities from engaging in political activities.
On March 25, 2009, the board of directors held an emergency meeting for the purpose of discussing plaintiff's employment. Plaintiff states that, although she was a board member, she was excluded from this meeting (see Complaint, ¶ 45). At this meeting, the board decided to suspend plaintiff's employment. On April 1, 2009, plaintiff was allegedly offered up to one month's salary if she agreed to resign her position voluntarily (see Complaint, ¶ 48). Plaintiff refused to resign, and she was notified in writing on April 3, 2009, that her employment was terminated. Allegedly, this letter failed to indicate any reason for plaintiff's termination (see Complaint, ¶ 50).
The complaint alleges four causes of action: (1) violation of New York Labor Law §
201-d, unlawful termination because of plaintiff's endorsement of Mayor Bloomberg; (2) failure
to pay wages due from April 1, 2009 to April 3, 2009; (3) unlawful discrimination under the
New York City Human Rights Law; and (4) aiding and abetting violations of the New York City
Human Rights Law, asserted against the Individual Defendants only.
Individual Defendants contend that, as voluntary, uncompensated directors of a charitable organization, they are immune from being held liable for actions undertaken by them in their charitable volunteer capacities. [*3]
Black Equity asserts that its reasons for terminating
plaintiff were not discriminatorily based on her association with Mayor Bloomberg, but were
based on its view that her political endorsement could have negative consequences for the
organization's federal tax exempt status.
As stated in Ladenburg Thalmann & Co., Inc. v Tim's Amusements, Inc. (275 AD2d 243, 246 [1st Dept 2000]),
"the court's task is to determine only whether
the facts as alleged, accepting them as true
and according plaintiff every possible favorable
inference, fit within any cognizable legal theory
(Leon v Martinez, 84 NY2d 83, 87-88 ).
Dismissal pursuant to CPLR 3211 (a) (1) is
warranted only if the documentary evidence
submitted conclusively establishes a defense to
the asserted claims as a matter of law (id., at 88)."
To defeat a pre-answer motion to dismiss pursuant to CPLR 3211, the opposing party need only assert facts of an evidentiary nature which fit within anycognizable legal theory (see Bonnie & Co. Fashions, Inc. v Bankers Trust Co., 262 AD2d 188 [1st Dept 1999]). Further, if any question(s) of fact exists with respect to the meaning and intent of the contract in question, based on the documentary evidence supplied to the motion court, a dismissal pursuant to CPLR3211 is precluded (see Khayyam v Doyle, 231 AD2d 475 [1st Dept 1996]).
Unpaid directors are immune from suit under the New York Not-For-Profit Corporation Law (N-PCL) § 720-a and CPLR 3211 (a) (11), absent allegations of their gross negligence or intention to [*4]cause harm. Thus, as to plaintiff's causes of action alleged against the individual directors, they are properly dismissed (see Pontarelli v Shapero, 231 AD2d 407, 410 [1st Dept 1996]).
"On a CPLR 3211 (a) (11) motion, Supreme Court is obligated
to determine whether the defendant is entitled to the
benefits conferred by N-PCL 720-a and, if it so finds, then
it must ascertain whether there is a reasonable probability
that the specific conduct of the defendant fell outside
the protective shield afforded by N-PCL 720-a [citation1
omitted]" (see Martin v Columbia Greene Humane Society, Inc.,
17 AD3d 839, 842 [3d Dept 2005]).
The Individual Defendants all serve as directors of Black Equity without compensation for their directorial services, and it is undisputed that Black Equity is a charitable organization that is tax exempt pursuant to section 501 (c) (3) of the Internal Revenue Code.
In her opposition, plaintiff asserts that defendant Cheryle A. Wills (Wills) receives compensation from Black Equity; however, Wills' compensation is not based on her service as a director, but is paid pursuant to a separate consulting contract with Black Equity, by which she is engaged to develop a business plan for potential funding sources. Plaintiff does not allege that any of the other directors receive compensation, but contends that since they receive certain perquisites, such as Black Equity paying for their attendance at various events, they should not be considered to fall within the protective umbrella of N-PCL § 720-a.
The legislative intent of section 720-a of the N-PCL is "to curtail litigation against persons engaged in nonpaid charitable activities..." (see Rabushka v Marks, 229 AD2d 899, 900 [3d Dept 1996]). Here, the complaint alleges wrongdoing against Wills perpetrated in her capacity as a nonpaid director of Black Equity, not in her role as a compensated consultant. Moreover, plaintiff did not cite any case or statutory reference that the perquisites stated by plaintiff constitute the type of compensation that would take the Individual Defendants out of section 720-a of the N-PCL. Therefore, with respect to the Individual Defendants, the court finds that they are entitled to N-PCL §720-a protection, provided that the actions complained of do not constitute gross negligence or intentional harm.
In order to prevail against an assertion of immunity, the plaintiff must demonstrate a "reasonable probability" that the Individual Defendants' conduct constitutes either gross negligence or was intended to cause harm. Thome v The Alexander & Louisa Calder Foundation, ___ AD3d ___, 890 NYS2d 16 (1st Dept 2009). The conclusory averments of plaintiff appearing in her complaint and opposition papers fall far short of satisfying this burden (see Pontarelli v Shapero, 231 AD2d 407, supra ). [*5]
The court notes that the cases cited by plaintiff in opposition to this portion of the instant motion all concern directors of for-profit corporations, rather then uncompensated officers, directors or trustees of charitable organizations. Therefore, based on the foregoing, defendants' motion seeking dismissal as against the Individual Defendants is granted.[FN1]
The third cause of action alleges that plaintiff was unlawfully terminated "on the basis of her known relationship and/or association with Mayor Michael Bloomberg ..." (See Complaint, ¶ 73). "Specifically, Defendants have discriminated against Plaintiff by suspending and terminating her employment in response to her decision to publicly endorse a white and Jewish candidate for Mayor of New York City" (see Complaint, ¶ 74).
In his affidavit supporting the instant motion, Black Equity's Chairperson, defendant Dr. Billy E. Jones, states that the reason for plaintiff's termination was her endorsement of a political candidate, which the board felt would jeopardize Black Equity's tax-exempt status. According to Internal Revenue regulations, in order to preserve tax exemption, an organization exempt under the provisions of section 501 (c) (3) of the Internal Revenue Code may not participate in any campaign activities for or against political candidates.
At this preliminary stage, when an answer has yet to be filed and no discovery has taken place, it would be premature to grant dismissal of a cause of action when the defendant's intent is evidenced by contradictory affidavits (see Prigorac v Park, 20 AD3d 363 [1st Dept 2005]). Moreover, defendant Black Equity's motion to dismiss the 4th cause of action as against them, is denied. The 4th cause of action is asserted against the Individual Defendants only, not against Black Equity. Accordingly, it is
ORDERED that the portion of defendants' motion seeking to dismiss the action as against defendants Dr. Billy E. Jones, Karl B. Rodney, Emory Brooks, Dr. James R. Dumpson, Monique Myles, Stephanie Palmer, Mary D. Redd, Brenda Scott, Cheryle A. Wills and Dr. Rudy Crew, is granted and this action is dismissed as against said individually named defendants; and it is further
ORDERED that the portion of defendants' motion seeking to dismiss the third and fourth causes of action as against defendant Black Equity Alliance, Inc., is denied; and it is further [*6]
ORDERED that the sole remaining defendant, Black Equity Alliance, Inc. Shall serve and file an answer within 20 days from the date of entry of this Order; and it is further
ORDERED, that the parties appear for a preliminary conference on March 4, 2010 at 9:30 a.m. in Room 304 at 71 Thomas Street. Dated: January 21, 2010
Joan M. Kenney, J.S.C.