Congregation Yetev Lev D’Satmar of Kiryas Joel, Inc. v. Congregation Yetev Lev D’Satmar, Inc., 9 N.Y.3d 300 (2007)
A religious corporation must obtain court approval before transferring real property, and retroactive approval will only be granted if the transfer demonstrably furthers religious or charitable objects generally, not merely the interests of one faction within the corporation.
Summary
This case concerns a dispute between two factions of the Satmar community over a cemetery. The Monroe Congregation sought a declaration that a transfer of a one-half interest in the cemetery property from the Brooklyn Congregation was lawful, or alternatively, for nunc pro tunc (retroactive) approval. The New York Court of Appeals affirmed the Appellate Division’s decision, holding that the transfer, made amidst a factional dispute and not clearly furthering religious or charitable objects generally, was invalid without prior court approval as required by Religious Corporations Law § 12.
Facts
The Monroe Congregation acquired a cemetery in 1981 which contained the grave of the Satmar movement’s founder, Grand Rabbi Joel Teitelbaum. The Monroe Congregation conveyed the cemetery to the Brooklyn Congregation in 1988, and they jointly operated it. A schism within the Brooklyn Congregation led to two rival factions with separate elections. One faction, led by Berl Friedman, transferred a one-half interest in the cemetery to the Monroe Congregation in 2001. The other faction, led by Jacob Kahan, attempted to restrict use of the cemetery by filing a declaration limiting who could encumber the property.
Procedural History
The Monroe Congregation sued the Brooklyn Congregation seeking a declaration that the 2001 transfer was valid, or for retroactive approval under Religious Corporations Law § 12. The Supreme Court granted summary judgment to the Monroe Congregation. The Appellate Division reversed, finding factual questions regarding the conveyance related to internal religious matters beyond court competence, and voided the conveyance because the Monroe Congregation did not establish that the transfer promoted the Brooklyn Congregation’s religious or charitable objects. The Court of Appeals granted leave to appeal.
Issue(s)
Whether the Appellate Division properly determined that the transfer of the cemetery property required court approval and that the Monroe Congregation was not entitled to retroactive approval of the transfer under Religious Corporations Law § 12.
Holding
Yes, because the transfer was not demonstrably in the best interests of the Brooklyn Congregation or furthering religious or charitable objects generally; rather, it appeared to advance one side of a factional dispute, making retroactive approval inappropriate.
Court’s Reasoning
The Court of Appeals based its reasoning on Religious Corporations Law § 12(1), which states that a religious corporation may not sell its real property without court approval. Furthermore, Section 12(8) dictates that when transferring property to another religious corporation for nominal consideration, the transferring corporation must show that “religious or charitable objects generally” would be conserved by the conveyance. The court emphasized that the transfer was “at least in part plainly designed to advance one side of the factional dispute.” Therefore, the Appellate Division was justified in finding that the transfer did not meet the statutory requirements for retroactive judicial approval. The court reasoned that allowing such a transfer would set a bad precedent, as it could be used as a tool in factional disputes rather than for genuinely furthering religious or charitable goals.