Congregation Yetev Lev D'Satmar of Kiryas Joel, Inc., et al. v. Congregation Yetev Lev D'Satmar, Inc., et al.

This action involves a dispute over the ownership of a
cemetery located in the Town of Monroe, New York, for members of
the Satmar community, a distinct sect of Orthodox Judaism. The
cemetery was originally acquired by plaintiff Congregation Yetev Lev D'Satmar of Kiryas Joel, Inc. ("Monroe Congregation") in
1981. It contains the grave of the Grand Rabbi Joel Teitelbaum,
founder of the Satmar movement. As such, the property holds
significant religious import for all Satmar followers. The
cemetery was conveyed to defendant Congregation Yetev Lev
D'Satmar, Inc. ("Brooklyn Congregation") in 1988, and thereafter
jointly operated by the two congregations.

Some time thereafter, the Brooklyn Congregation split
into two rival factions over matters concerning leadership of the
Satmar community. The feud resulted in each faction conducting
separate elections of the board of directors and officers for the
Brooklyn Congregation. On January 14, 2001, Berl Friedman,
purporting to act as President of the Brooklyn Congregation,
convened a board meeting at which he authorized the transfer of
an undivided one-half interest in the cemetery property to the
Monroe Congregation. A deed, executed by Berl Friedman on
January 19, 2001 and conveying the one-half interest in the
cemetery property for nominal consideration, was later recorded
in the Orange County Clerk's Office.

At approximately the same time, Jacob Kahan and other
members of the rival faction held a meeting at which they
designated themselves the true officers of the Brooklyn
Congregation. They sought to restrict the use of the cemetery
property by filing a so-called "declaration" with the Orange
County Clerk providing that only those designated officers could mortgage, sell or otherwise encumber the property.

In 2005, plaintiffs commenced this action against
defendants seeking, among other things, a declaration that the
transfer of the one-half interest in the property was lawful
under the Real Property Law or, in the alternative, to obtain
nunc pro tunc approval of that transfer pursuant to Religious
Corporations Law § 12. Defendants answered and asserted
counterclaims against plaintiffs alleging, among other things,
that Berl Friedman was not authorized to execute the 2001 deed
because he had been expelled from the Brooklyn Congregation.

Supreme Court awarded summary judgment to plaintiffs,
upholding the validity of the transfer executed by Berl Friedman
and vacating the declaration. The Appellate Division reversed,
in part, finding that questions of fact existed concerning the
conveyance, and that those questions "involve ecclesiastical
issues that are beyond the competence of the courts" (31 AD3d
480, 482 [2d Dept 2006]). Upon searching the record, the court
voided the conveyance pursuant to the Religious Corporations Law,
finding that plaintiffs failed to establish that the transfer
promoted the interests of the grantor by furthering a religious
or charitable object generally (id. at 483). The Appellate
Division subsequently granted leave and certified the following
question to us: "Was the decision and order of this Court dated
July 11, 2006 properly made?" We now affirm.

We conclude that support in the record exists for the Appellate Division's finding that the transfer was not in the
best interests of the Brooklyn Congregation. Thus, plaintiffs
were not entitled to retroactive judicial approval of the
transfer. A religious corporation may "not sell . . . its real
property without applying for and obtaining leave of the court"
(Religious Corporations Law § 12 [1]). When a religious
corporation fails to obtain the necessary judicial approval
before transferring the real property, the corporation may seek
retroactive judicial approval in order to validate the
transaction (see Religious Corporations Law § 12 [9]). Where, as
here, a religious corporation seeks to "convey the whole or any
part of its real property to another religious corporation" for
nominal consideration, the corporation must show that "religious
and charitable objects generally" would be conserved by the
conveyance of the property (Religious Corporations Law § 12 [8]).
Here, where the transfer was at least in part plainly designed to
advance one side of the factional dispute, the Appellate Division
justifiably found that no such showing was made. We need reach
no other issue.

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http://www.courts.state.ny.us/ctapps/decisions/nov07/143opn07.pdf