In Re: Mosdos Chofetz Chaim Inc.

Background

The appeal concerned a March 7, 2022 order by Bankruptcy Judge Robert D. Drain. That order granted summary judgment—a decision entered without a trial when the court finds no genuine dispute over a legally important fact and the moving party is entitled to judgment under the law—to Yom T. Henig, Samuel Markowitz, Steven Green, Daniel Green, and Yehudah Blumenfeld.

The underlying plaintiffs were Aaron D. Gewirtzman, Bent Philipson, Daniel Rosenblum, Joseph Grunwald, Mark Blisko, Shimon Zaks, and Rabbi Mayer Zaks. They claimed that they constituted and controlled Congregation Radin Development Inc. (CRDI), a not-for-profit religious corporation that purchased property from Mosdos Chofetz Chaim under a bankruptcy reorganization plan. They sought a declaration that they were CRDI’s legitimate trustees and that the defendants were not.

The appellants alleged that they had elected themselves as CRDI trustees at meetings held on May 25 and September 1, 2021. Their position depended on their claim that they were members of CRDI under New York Religious Corporations Law § 195 and CRDI’s bylaws. The defendants argued that the appellants were members of the Mosdos congregation, not CRDI, and had no authority to elect CRDI trustees.

Issues on Appeal

The appellants raised three principal arguments: that the bankruptcy court lacked subject-matter jurisdiction; that factual disputes prevented summary judgment; and that the bankruptcy court improperly refused to allow additional discovery before ruling on the motion.

Jurisdiction

Judge Halpern held that the bankruptcy court had subject-matter jurisdiction. The dispute concerned the effect and enforcement of the bankruptcy court’s prior orders, including an injunction restricting the appellants’ access to the property. The district court reasoned that a ruling for the appellants could undermine the bankruptcy reorganization plan and the prior orders concerning CRDI’s ownership and control.

Membership and Summary Judgment

The district court agreed with the bankruptcy court that the appellants were not CRDI members as a matter of law. Section 195 recognizes two relevant ways to qualify as voters in a religious corporation: being members in good standing under the corporation’s rules, or being regular worship attendees who regularly contributed financial support to that corporation.

Under CRDI’s bylaws, membership was open to people meeting specified religious requirements, but the court ruled that merely claiming to meet those requirements did not automatically create membership. The court also concluded that the appellants’ prior adversarial relationship with CRDI and their repeated litigation against it undermined their claim to be members in good standing. Their membership in the Mosdos congregation did not legally become membership in CRDI.

The appellants also could not qualify under the second part of Section 195 because CRDI owned and maintained property but did not itself conduct religious services. The services on the property were conducted by Chofetz Chaim, Inc. (CCI), and the appellants’ attendance at services associated with Rabbi Mayer Zaks did not establish attendance at CRDI services. The court further found that the appellants’ unsupported personal statements were insufficient to create a genuine factual dispute.

Because the appellants were not CRDI members, they lacked the legal ability to challenge the election of CRDI’s trustees. The court therefore held that disputes about how the meetings were called, who CRDI’s other members were, and related matters were not material to the outcome. It also held that additional discovery could not change the result because the appellants’ membership theory failed as a matter of law.

Disposition

The district court affirmed the Bankruptcy Court’s March 7, 2022 order granting summary judgment to the respondents and dismissing the underlying adversary proceeding. The clerk was directed to terminate the district-court case.