Marinello Case: Official Transcript of November 30, 2004 hearing

5 Index#7739-04

8 ...............................................X

9 Orange County Gvt. Center
Goshen, NY 10924
10 November 30, 2004


12 B E F O R E:
13 Supreme Court Justice

16 Pro Se

Attorneys for Defendant




22 Neil Bostock, RPR-CM

23 Official Court Reporter



Neil Bostock, RPR-CM

Proceedings 2

1 MR. SLOAN: Samuel H. Sloan of 331 East 32nd

2 Street, Apartment 19K, Far Rockaway, New York 11691.

3 MR. MATSLER: Michael Matsler, of Rider,

4 Weiner, and Frankel, New Windsor, representing the

5 United States Chess Federation, and the other

6 respondents. Your Honor, this is an Order to Show

7 Cause brought by Mr. Sloan. The Order specified

8 that service, personal service was to be made on the

9 respondents no later than November 22nd. It was

10 not. There was apparently service by mail at least

11 on USCF, and the executive director in New Windsor

12 that was received on Friday, and was the only

13 attempt at service.

14 THE COURT: Let's cut to the chase. Do we have

15 Affidavits of Service?

16 MR. SLOAN: Yes, I do, Your Honor.

17 THE COURT: For everybody?

18 MR. SLOAN: You have to understand that the

19 individual respondents, one is in Tennessee, one is

20 in California, one is in Florida, one is in --

21 THE COURT: With all due respect, I don't have

22 to understand. My Order to Show Cause says personal

23 service is to be made by the 22nd of November. What

24 is it that I have to understand other than there is

25 an order in black and white?

Neil Bostock, RPR-CM

Proceedings 3

1 MR. SLOAN: One of them was in Spain. It's

2 impossible.

3 THE COURT: I understand that but don't you

4 have an obligation to say to the court, you know,

5 gee, when you sign the Order to Show Cause, here is

6 my problem, because I write this down, and this is

7 the first I'm hearing, you know, that somebody is in

8 Spain, somebody is here and somebody is there. What

9 am I supposed to do? You didn't conform to the

10 order.

11 MR. SLOAN: All the people received the notice

12 by regular mail, by certified mail, by e-mail, by

13 web site, all received it five different times.

14 THE COURT: That is fine. So when you get

15 elected judge you can write your orders. Second

16 call.

17 (Second Call.)

18 MR. MATSLER: Again, Mike Matsler for the US

19 Chess Federation. I have prepared a motion to

20 dismiss. I would like to serve it on Mr. Sloan.

21 There are four or five grounds, including the

22 failure to serve, in accordance with your Order, and

23 also including lack of jurisdiction, as a matter of

24 law, and a few other matters.

25 I have a copy I'd like to serve on Mr. Sloan

Neil Bostock, RPR-CM

Proceedings 4

1 now, if it please the court.

2 THE COURT: That's fine.

3 MR. MATSLER: And a notice of motion, with

4 affidavits and memorandum of law.

5 THE COURT: Mr. Sloan, I assume you'd like to

6 respond to that?

7 MR. SLOAN: Well, of course I haven't had time

8 --

9 THE COURT: I am not suggesting you respond to

10 it now. Are you going to want time to respond to

11 it?

12 MR. SLOAN: Yes.

13 THE COURT: How much time would you like?

14 MR. SLOAN: A short time, because it's of

15 great urgency.

16 THE COURT: What are you looking for?

17 MR. SLOAN: I have to ask my wife, but I guess

18 we could come back tomorrow.

19 THE COURT: I don't think you're going to be

20 able to properly fashion a response to a memorandum

21 in that time, but if you want tomorrow, do you need

22 time to talk to your wife now?

23 MR. SLOAN: She went outside with the baby.

24 THE COURT: Is she counsel to you?

25 MR. SLOAN: No, but I have to take care of the

Neil Bostock, RPR-CM

Proceedings 5

1 baby. We don't have a babysitter.

2 MR. MATSLER: If I may suggest a return date of

3 December Tenth at 9 a.m.

4 THE COURT: If he gets his answer in by the end

5 of the week, and you want to reply to that, I have

6 no problem with it being fully submitted by the

7 Tenth.

8 MR. MATSLER: Whatever you prefer, Your Honor.

9 THE COURT: Mr. Sloan, I'm going to give you

10 until the end of the week.

11 MR. SLOAN: May I address the underlying issue

12 here? This is a matter of great urgency.

13 THE COURT: I understand that but he's filing a

14 motion to dismiss. The Order to Show Cause was not

15 served in accordance with --

16 MR. SLOAN: I disagree. I think the Order was

17 served properly. I have an affidavit of service

18 here.

19 THE COURT: We already discussed the fact that

20 those parties were not served personally pursuant to

21 my Order.

22 MR. SLOAN: Wait a second. The office was

23 served. In fact it was served eleven days ago,

24 so --

25 THE COURT: We had this conversation when we

Neil Bostock, RPR-CM

Proceedings 6

1 started this. Unless all the named respondents were

2 served personally, pursuant to the CPLR and the

3 corporation, that might be a managing agency, but

4 certainly personally means personally, and the CPLR

5 is very, very clear on what that means.

6 MR. SLOAN: I believe that if they're out of

7 the state or out of the country that service by

8 certified mail is normal.

9 THE COURT: I don't think the CPLR says that.

10 If you think the CPLR says that, I suggest you

11 submit a memorandum of law.

12 MR. SLOAN: The listed address is the United

13 States Chess Federation. In Chess Life Magazine it

14 shows the address of the defendants, and they're all

15 listed --

16 THE COURT: Put that in your answering papers.

17 MR. SLOAN: The second thing I'd like to

18 address is the underlying issue, very briefly, if

19 you don't mind, Your Honor.

20 THE COURT: I'll hear you briefly.

21 MR. SLOAN: I have here a pamphlet which is

22 distributed by the Attorney General of the State of

23 New York, to all nonprofit corporations, telling

24 them what procedures need to be filed in order to

25 sell a building which is a principal asset of the

Neil Bostock, RPR-CM

Proceedings 7

1 corporation. This pamphlet clearly states that the

2 first thing they have to do is have a vote by the

3 board to sell the building. Secondly there has to

4 be a vote by the voting members, of which I am one,

5 to sell the building. Third, they have to notify

6 the Attorney General of the State of New York, and

7 fourth, they have to petition the court. They

8 didn't do any of these steps. They did not even

9 have a vote by the board. The board never voted to

10 sell the building. I have checked the minutes of

11 the meetings going back three years, and no board

12 has ever voted to sell the building, which is

13 located on Route 9W in New Windsor.

14 They sold the building without even a vote of

15 the board. They certainly didn't ask the members to

16 sell the building. They have taken the money, five

17 hundred and thirteen thousand dollars, and as a

18 matter of fact, Kim Hanky (phon), one of the

19 defendants, said on an Internet posting last week,

20 that he has put the money in a duffle bag, five

21 hundred and thirteen thousand, and he's carrying the

22 money around in the trunk of his car. He said it as

23 a joke, I realize, but nevertheless, the fact is

24 that we have got five hundred thousand dollars

25 sloshing around here, and nobody knows who has the

Neil Bostock, RPR-CM

Proceedings 8

1 money, or what they're going to do with it. It's a

2 not-for-profit corporation and the law says that

3 when a building is sold, the funds must be placed in

4 escrow, and that is what I'm asking you to do, is to

5 place these funds in an escrow account, under the

6 supervision of the court, so that these people

7 cannot literally run off with the money, because

8 that is exactly what they're planning to do.

9 Beatriz Marinello is not even a citizen of the

10 United States. She is going to Chile quite often,

11 and could take this five hundred thousand and run

12 with it down to Chile. There is nothing, absolutely

13 nothing stopping her from doing it right now,

14 because she has signing authority of the money. As

15 a matter of fact the reason why she hasn't done it,

16 I just found out yesterday, is because under the

17 Patriot Act she has to provide information to the

18 bank before they give her the five hundred thousand

19 dollars. That is why the bank hasn't given her the

20 money, Key Bank in --

21 THE COURT: Do you want to respond to any of

22 that?

23 MR. MATSLER: Very briefly, Your Honor. The US

24 Chess Federation is an Illinois corporation. It is

25 duly authorized as a foreign corporation in New York

Neil Bostock, RPR-CM

Proceedings 9

1 State, and therefore under the Not-for-profit

2 Corporation Law, this is governed by Article 13 --

3 this is in our papers -- Article 13 makes several

4 provisions of the domestic not-for-profit

5 corporation law applicable, but not sections 510 and

6 511, which is what Mr. Sloan argues the court

7 should rely upon. We do not require approval of the

8 sale. The sale did take place by the way two months

9 ago.

10 THE COURT: Where is the money?

11 MR. MATSLER: In Key Bank in Newburgh. It is

12 there. It hasn't been moved. It's not going to be

13 moved.

14 MR. SLOAN: Can we then agree to stipulate

15 that until this matter is resolved the money will

16 stay on deposit in Key Bank and will not be removed?

17 MR. MATSLER: I would prefer to stipulate to

18 the money being on deposit in an FDIC insured

19 chartered financial institution. The United States

20 Chess Federation want to move to Tennessee. They're

21 getting free land. They're going to be getting free

22 office space. They have already started the move.

23 THE COURT: All right, you have just told me

24 they're not using this money, so I would say I have

25 no problem ordering the money stay in Key Bank at

Neil Bostock, RPR-CM

Proceedings 10

1 the current time. If they want to move it to an

2 FDIC insured bank, and they provide me with reason

3 why they want to do that, then, and I'm not saying

4 I'm going to, but they can argue for that, but right

5 now, at least until we get your papers and his

6 papers fully submitted, I am ordering the money stay

7 in the Key Bank.

8 MR. MATSLER: Okay, Your Honor, fine.

9 I just want to say, I was told it's in, and I

10 believe it's in a Key Bank, it's in bank accounts in

11 Newburgh, and whatever the bank accounts are, they

12 are, in Newburgh.

13 THE COURT: I will respect you as an officer of

14 the court, and so that if the money is in Newburgh,

15 it's going to stay in a bank in Newburgh, pursuant

16 to what I said earlier.

17 MR. MATSLER: Should I submit my papers through

18 the clerk's office with an affidavit of service?

19 THE COURT: The answer is yes but please urge

20 them to get us the papers as quickly as possible.

21 MR. MATSLER: Would you like a courtesy copy?

22 THE COURT: I would love one.

23 Mr. SLOAN, as I indicated, you have until

24 Friday the Third of December to get in your

25 response, and should you wish to reply you'll have

Neil Bostock, RPR-CM

Proceedings 11

1 your reply in by the tenth.

2 MR. SLOAN: Can I just say, because I did hire

3 a process sever, the papers were served on --

4 THE COURT: Mr. Sloan, there was a motion. I

5 have given you time to respond. Let's keep it in

6 the papers.

7 MR. SLOAN: Thank you very much. You gave me

8 what I'm asking for, which is the money to be kept

9 here in New York State before it goes to Tennessee.

10 THE COURT: I may ultimately rule, if they ask

11 me to, that the money can go to Tennessee.

12 If they are having land given to them, and they

13 are establishing a new office of the United States

14 Chess Federation in Tennessee I may authorize that

15 money to go to Tennessee.

16 MR. SLOAN: We understand that you may

17 authorize that, but we feel that the court should

18 make that decision, not Beatriz Marinello, who can

19 run to Chile with the money.

20 MR. MATSLER: Thank you.

21 THE COURT: I don't think it's going to Chile,

22 but okay.

23 MR. MATSLER: Thank you.



Neil Bostock, RPR-CM

Proceedings 12

1 CERTIFIED BY ME TO BE a true and accurate

2 transcript of the within proceedings,

3 _____________________________

4 Neil Bostock, RPR-CM

5 Official Court Reporter





















Neil Bostock, RPR-CM

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