Legal Action

F. Events following the March 23, 2019 Special Meeting

76. In May 2019, Plaintiffs retained counsel to advise as to the legality of the Board's conduct.
77. By letter dated June 10, 2019, Plaintiffs' counsel contacted counsel for the RAA, detailing the above events and describing the ways in which the Board's conduct violated its Charter, bylaws, and the N-PCL. Plaintiffs' counsel concluded the letter by requesting an opportunity to meet with the RAA's counsel and Board Chairman Muhammad "to see if a resolution of our clients' concerns can be reached without the need for litigation to correct the obvious illegalities documented … and to prevent their recurrence."
78. On July 16, 2019, representatives of both Plaintiffs and Defendant, as well as their counsel, participated in a conference call in order to try and resolve the issues raised in the June 10, 2019 letter. Board Chairman Muhammad participated as one of RAA's representatives, and Mr. Krob and Mr. Criss were among those participating on behalf of Plaintiffs.
79. During the call, Plaintiffs' counsel explained that the bylaws needed to be amended in order to comply with the RAA's Charter and the N-PCL. He also described a number of specific bylaw amendments that Plaintiffs sought to have the Board adopt.
80. Following the call, Plaintiffs' counsel emailed a set of proposed amended bylaws to counsel for the RAA for the Board to review.
81. The RAA's bylaws currently in place state that amendments to the bylaws can be made "at a meeting of the Board by approval of two-thirds of the Board provided that thirty (30) days' notice of such amendments has been given to each Trustee."
82. N-PCL § 602(e) states that "[i]f any by-law regulating an impending election of directors is adopted, amended or repealed by the board, there shall be set forth in the notice of the next meeting of the members for the election of directors the by-law so adopted, amended or repealed, together with a concise statement of the changes made."
83. If the Board were to provide notice of the next Annual Meeting via e-mail or first-class mail, notice would have to be given no less than ten days prior to the meeting, and if the Board planned to provide notice through any other class of mail, notice would to be given no less than thirty days prior to the meeting.
84. The RAA's next Annual Meeting of Members is scheduled for September 27, 2019, at which time an election to fill Board vacancies and expired terms is to be held. In light of the above notice requirements, Plaintiffs' counsel asked that the Board commit to adopting the proposed bylaw amendments no later than Friday, July 26, 2019. This was to ensure that the proposed changes, if accepted by the Board, would be in effect and applicable to the upcoming September election.
85. By letter dated July 29, 2019, Defendant's counsel advised Plaintiffs' counsel that the Board would not amend the RAA's bylaws.
86. Defendant justified its refusal to amend the election procedure, set forth in the bylaws, by stating "[i]t is the position of the RAA that its current voting procedure, in effect since at least 2001, is valid. In particular, Section 613(a) of the NFPCL provides that 'except as otherwise provided in the by-laws', directors shall be elected by a plurality of votes. Furthermore, Section 602(e) of the NFPCL contemplates that the Board may adopt by-laws which regulate the election of directors."
87. Defendant further stated that the RAA's Charter "specifically and solely vests the ability to adopt bylaws with the Board of the RAA. The Board of Regents has specifically imposed this limitation on the RAA in granting the approval of its Absolute Charter." Neither the bylaws, nor the RAA's Charter, however, prohibit Members from amending the bylaws, nor do they vest the right to do so solely with the Board.
88. Additionally, N-PCL § 602 specifically states that subject to an exception not applicable hereto, "by-laws may be adopted, amended or repealed by the members at the time entitled to vote in the election of directors and, unless otherwise provided in the certificate of incorporation or the by-laws adopted by the members, by the board." Section 602 further allows members to amend or repeal any bylaw adopted by the Board, "and, unless otherwise provided in the certificate of incorporation or the by-laws adopted by the members, any by-law adopted by the members may be amended or repealed by the board." Therefore, even if bylaws adopted by the Board gave it the sole power to adopt, amend or repeal the RAA's bylaws, it would be invalid since N-PCL § 602 gives Members the right to do so as well, and more importantly, gives Members the right to prevent the Board from amending or repealing any bylaw adopted by Members—not the other way around.

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AS AND FOR A FIRST, SEPARATE AND COMPLETE CAUSE OF ACTION, PLAINTIFFS ALLEGE AS FOLLOWS:

89. Plaintiffs repeat and reallege all the foregoing paragraphs of this Complaint as if fully set forth herein.
90. The bylaws of the RAA violate its Charter, the Education Law and the N-PCL in that:
    • Article III, § 2, stating that Members can only call a special meeting upon the written request of 10% of the RAA's membership, was designed to prevent Members from exercising their right to call special meetings by making it virtually impossible for them to do so;
    • Article III, § 4, purporting to define a quorum as 100 Members, violates N-PCL § 608 in that it was not approved in accordance with subdivision (c) thereof "at a special meeting of members at which the quorum requirements applicable to the corporation immediately prior to the effective date" of the N-PCL or by the Supreme Court through intervention sought in accordance with subdivision (e).
    • Article IV § 1, purporting to allow a minimum of 3 Trustees, violates Education Law § 226(1) and the RAA's Charter, both which require a minimum of 5 Trustees, and violates Education Law § 226(10) and N-PCL § 602(f) since it contravenes the RAA's Charter;
    • Article III, §1, Article IV § 3, Article V, § (1)(c), and Article VI, § 2 give the Board the sole power to elect Trustees and Officers and fill Board vacancies arising between Annual Meetings, thereby divesting Members of their rights under the RAA's Charter to elect Trustees and fill vacancies arising between annual elections and violating Education Law § 226(10) and N-PCL §§ 602(f) and 712(a)(b),(f);
    • Article XI, § 1, to the extent it purports to give the Board the sole power to adopt, amend, or repeal the RAA's bylaws, violates N-PCL § 602, which gives Members the right to do so as well, and gives Members the power to limit the Board's ability to exercise this right.

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PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully request that this Court:

• Enter a judgment declaring Article III, §§1, 2, 4; Article IV, §§ 1, 3; Article V, § (1)(c), Article VI, §2; and Article XI, § 1 of the RAA's bylaws null and void insofar as they violate the RAA's Charter, the N-PCL, and the Education Law;
• Permanently enjoin Defendant, its agents, and others working under or pursuant to its direction and control from implementing any provision of the bylaws which violates the RAA's Charter, the N-PCL, or the Education Law;
• Issue an order directing that within 14 days thereof, the RAA Board amend the corporation's bylaws to conform to its Charter and the N-PCL by:
  • (a) Deleting Article III, § 1 ("Annual Meeting of Members") insofar as it only gives Members the right to vote on the slate of candidates selected by the Nominating Committee, and (b) amending it to ensure that Members are given the opportunity to meaningfully exercise their right to elect Trustees and Officers in accordance with the RAA's Charter;
  • Amending Article III, § 2 ("Special Meetings of Members") to provide, inter alia, that the Secretary shall call a special meeting of Members upon written request of the President, a majority of Trustees, or 100 Members;
  • (a) Deleting the first sentence of Article IV, § 1 ("Composition") insofar as it allows for a minimum of three (3) Trustees (in violation of the RAA's Charter and Education Law § 226(1)), and (b) amending it to state, inter alia, that the Board shall be composed of not less than five (5) Trustees;
  • (a) Deleting Article IV, § 3 ("Vacancy") insofar as it allows the Board or any committee thereof to fill Board vacancies arising between Annual Meetings of Members and elections held thereat, and (b) amending § 3 to ensure Members have the ability to exercise this right in accordance with the RAA's Charter;
  • (a) Deleting Article V, § 1(c) insofar as it allows the Executive Committee to fill vacant Officer seats arising between Annual Meetings of Members and elections held thereat; and (b) amending §(1)(c) to ensure Members have the ability to fill all Board vacancies arising between Annual Meetings of Members and elections held thereat, in accordance with the RAA's Charter;
  • Amending Article VI, § 2, to ensure that:
    • For each position to be filled, Members may submit names to Nominating Committee for consideration in selecting its slate of candidates;
    • The proposed slate selected by the Nominating Committee and approved by the Board will list one or more candidates for each position to be filled and be available for a reasonably sufficient time for Members review it prior to the Annual Meeting;
    • In addition to the slate approved by the Board, any Member may be nominated for any position to be filled upon: (a) the written petition of a reasonable number of members not to exceed ten (10) or (b) a nomination made from the floor at the Annual Meeting of Members. The ballot shall list each Trustee or officer position to be filled and list the name(s) of any such person(s) so nominated;
    • The election shall be conducted for each position separately, rather than for the 'slate' as a whole, and each candidate shall be elected based on a plurality of the votes from the Members present. To the extent that a position remains unfilled, the Trustee(s) then in office shall remain in office until their successor(s) are duly elected at a special meeting of Members called in accordance with New York State Not-For-Profit Corporation Law § 604.
  • (a) Deleting Article XI, § 1 insofar as it purports to give the Board the sole power to adopt, amend, or repeal the RAA's bylaws, and (b) amending Article XI, § 1 to ensure that:
    • Any proposed amendments to the bylaws may be made at a meeting of the Board by approval of two-thirds of the Board, provided that: (a) such proposals are made at least forty-five (45) days before an Annual or Special Meeting of the Members, and (b) any such proposed amendment(s) shall go into effect only after approval by a majority vote of Members in attendance at such meeting and only if written notice of the amendment(s) was provided to Members at least thirty (30) days prior to that Annual or special meeting;
    • Proposed amendments to these Bylaws may be initiated by the written petition of a reasonable number of Members not to exceed twenty (25) provided that: (a) such petition is made at least thirty (30) days before an Annual or special meeting of the Members and (b) any such proposed amendment(s) shall go into effect only after approval by a majority vote of Members in attendance at such meeting. The Secretary shall provide notice to Members of any proposed amendment at least twenty (20) days prior to such Annual or special meeting;
• Enjoin the Defendant from holding any election of Trustees or Officers until such time as the bylaws are so amended, approved, adopted and implemented;
• (a) Issue an order directing that within 14 days thereof, the Board call a special meeting of Members for the purpose of allowing Members to approve an amendment to the bylaws, pursuant to N-PCL § 608(b)-(c), that defines a quorum at any Annual Meeting or special meeting of the Association as one-hundred Members; and (b) direct that the Board, if and when Members approve of such amendment, revise the bylaws accordingly; and
• Award such other further and different relief as it deems warranted, including, but not limited to, legal fees to Plaintiffs and/or their counsel, along with the costs and disbursements associated with this action.

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DATED: August 10, 2019

Yours, etc.

O'CONNELL AND ARONOWITZ

By:
Courtney L. Alpert, Esq.
Attorneys for Petitioners
Office and P.O. Address
54 State Street
Albany NY 12207-2501
(518) 462-5601

STATE OF CONNECTICUT	)
	)ss.:
COUNTY OF FAIRFIELD	)

JOHN A. KROB, being duly sworn, deposes and says that I am one of the Plaintiffs in this action, and that I have read the foregoing Complaint and that the same is true, except as to matters therein stated to be upon information and belief, and such belief is founded on my review of the correspondence and exchanges between the parties herein and my review of the bylaws and the minutes of meetings of the Defendant.

John A. Krob

Sworn to before me this
10 day of Aug, 2019.

Notary Public, State of Connecticut

DEONIE A. YOUNG
NOTARY PUBLIC OF CONNECTICUT
MY COMMISSION EXPIRES 04/30/2022

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