Marinello Case: Decision of Judge Horowitz dated January 10, 2005



Index No. 2004-7739




Petitioner Sam Sloan moved, by Order to Show Cause, for an order:

(1) freezing the United States Chess Federation (USCF)'s bank account, which contained $513,000, realized as proceeds of the sale of the USCF's headquarters building in New Windsor, Orange County, during September 2004;

(2) granting a temporary restraining order, and permanent injunction, enjoining Respondents Marinello, Hanke, Shutt, and Shuaghnessy, from taking any actions, including hiring, or firing, employees, entering into contracts, or otherwise using any USCF's funds;

(3) granting a temporary restraining order, a preliminary injunction, and a permanent injunction. restraining USCF, and its agents, from effectuating its move to Crossville, Tennessee, or anywhere else, without leave of this Court;

(4) enjoining Respondents Marinello and Hanke from signing any checks or transferring USCF funds;

(5) enjoining Respondent Chadwell (corporation counsel for Crossville, Tennessee) from "harassing" the USCF Board, by filing, or threatening to file, any litigation to compel USCF to move to Crossville, Tennessee.

(6) removing Respondents Marinello, Hanke, Shutt, and Shaugnessy, from the USCF Executive Board, and barring them from election to the USCF Executive Board, in the future, and

(7) such other relief as the Court may find just and proper.

Opposing the requested relief, the Respondents cross moved. for an order dismissing the petition, and denying the Petitioner's motion for preliminary injunction and order of attachment, pursuant to CPLR ??404(a) and Rule 3211, on the grounds that

(1 ) this Court lacks personal jurisdiction, over the Respondents, by reason of the Petitioner's failure to effectuate lawful service of process;

(2) this Court lacks personal jurisdiction, pursuant to CPLR ??302, over the Respondents (other than Goichberg), as non-domiciliaries (see, International Shoe Co. v. Washington, 326 US 310 [1945]);

(3) Petitioner failed to state a cause of action, for which this Court can grant relief.

The Respondents also seek an award of attorneys' fees and costs, pursuant to Part 137 of the Rule of the Chief Administrator of the Courts.

The following papers, numbered 1 to 6, were read on this motion and cross motion:

Order to Show Cause, Petition, Memorandum of Law 1
Affidavit of Sam Sloan with attachment 2
Notice of Cross Motion and Affirmation in Opposition 3
Respondent's memorandum of law 4
Reply Affidavits (2; 5
Correspondence from the Attorney General 6

Based on the above papers, the various branches of the Petitioner's motion are DENIED; and the Respondents' Cross Motion is GRANTED, in part, and DENIED, in part.


The instant action involves an internal dispute between the USCF and certain members, concerning the USCF's Executive Board's decisions to sell certain real property located in Orange County and move the organization's headquarters outside of New York State. The dispute involves certain business decisions that the Executive Board made concerning the location of the corporate headquarters and the sale of certain corporate assets.

Respondent USCF is an Illinois corporation, doing business in New York State. It is a foreign Not-for-Profit Corporation, functioning within this state. The corporation lists no Registered Agent, with the Secretary of State, and maintains its managing office in Orange County.

As the immediate cause of this action, the Petitioner objects to the fact that the corporate Respondent sold its Orange County real estate, without the approval of the New York State Attorney General. Further. the Petitioner maintains that the Respondents have set out on a series of willful unauthorized activities, that will result in moving the corporate headquarters out-of-state.

The Respondents maintain, that as a foreign corporation, USCF is not required to obtain the permission of the New York State Attorney General to sell its real property in New York State. While not a party, the Attorney General, by November 29, 2004, letter, advised that no notice was given to the Attorney General, prior to the sale of this real property (see, Not for Profit Corporation Law ????510 and 511). The Attorney General also pointed out that the Petitioner raised a number of procedural and substantive question regarding membership and board approval, as well as placement of the proceeds in an escrow account.

A hearing was held, in this matter, on November 30, 2004. At that time, the Respondents were temporarily enjoined from, among other things, transferring certain funds that the USCF had received from the sale of the Orange County real property.

Legal Discussion

Before determining the various substantive issues that the Petitioner raised, concerning this foreign not-for-profit corporation's actions, this Court must initially deal with a jurisdictional issue raised in the Respondent's cross motion, i.e., that this Court lacks jurisdiction because the Petitioner failed to personally serve the various Respondents.

Respondents maintain that the Pro Se Petitioner never personally served his petition upon the various Respondents and served the Order to Show Cause delinquently without supporting papers.

On review of this record, the Court agrees with the Respondents that personal jurisdiction has not been obtained over either the corporation or the individual Respondents.

Concerning personal service, the Petitioner admitted, in his "Reply to the Affidavit of Bill Goichberg," that the Petitioner maintains that it was impossible to personally serve the Respondents, since at least two of them were in Spain at the time service was required. The Plaintiff felt that serving the Respondents, at the USCF's headquarters, was sufficient to obtain jurisdiction, because the Respondents failed to list other addresses in the various corporate web sites and other publications. Further, the Petitioner felt mailing a copy of the papers to 27 individuals was adequate notice, together with e-mail, because all twenty seven individuals would have known about this litigation (Sloan's Goichberg Affidavit TT 5 to 12).

The Court reviewed the various Affidavits of Service, and related papers. and concludes that those affidavits involve service of the Order to Show Cause only, not service of the notice of petition or the petition. Further, Respondent Goichberg's affidavit denies that Goichberg receiving timely personal service of either the Petition, or the Order to Show Cause.

In the Order to Show Cause, this Court required that the Order to Show Cause be served by personal service, on or before November 22, 2004. The Petitioner made no attempt at personal service until November 23, 2004, and only the order itself appears to have been attempted to be served.

Because of this Court's determination concerning personal jurisdiction, there is no purpose in examining the Petitioner's various issues, or the Attorney General's correspondence, concerning the failure to request his office's approval of the sale. Likewise, the Court will express no opinion concerning the Respondents' other arguments, involving the Respondents' status as non-domiciliaries, under CPLR ??302.
Relying on the foregoing, any preliminary relief, awarded to the Petitioner, is revoked and cancelled.

Nevertheless, this Court's decision here must not be viewed as approval, of the sale of the USCF's real property, or as sanctioning that organization's move out of New York State.

Part 137 Attorneys Fees and Costs

Finally, the Respondents, under Part 137 of the Rules of the Chief Administrator of the Courts, request attorney fees and costs in this matter. This relief is not appropriate here (see generally Rules of the Chief Administrator of the Courts ??137.1)

WHEREFORE, based on the foregoing, it is

ORDERED that all branches of the Petitioner motion, in this matter, are DENIED, and it is

ORDERED that any preliminary relief, awarded to the Petitioner, is CANCELED and REVOKED, and it is

ORDERED that the branch of the Respondents' cross-motion, seeking dismissal of this action, for failure to obtain personal jurisdiction over the Responsents, is GRANTED, and it is

ORDERED that the branch of the Respondent's cross motion seeking attorney fees and costs, pursuant to Part 137 of the Rules of the Chief Administrator of the Courts, is DENIED, and it is

ORDERED that the remaining branches of the Respondents' cross motion are DENIED, as moot.

The foregoing constitutes the decision of this Court.

Dated: Goshen, New York
January 10, 2005


Sam Sloan
Petitioner Pro Se
331 Beach 32nd Street, Apt. MK
Far Rockaway, New York 11691

Michael J. Matsler, Esq.
Counsel for Respondents
650 Little Britain Road
New Windsor NY 12550

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