GARRY, J.
In 1963, a group of parents in Chenango County formed a group for the purpose of improving opportunities for the education, care, and vocational training of their developmentally disabled children. Shortly thereafter, the group became the Chenango County Chapter of NYSARC, Inc. (hereinafter Chapter), by affiliating with defendant, a not-for-profit corporation with the principal purpose of assisting developmentally disabled individuals in New York State. The Chapter has since been providing services to Chenango County's developmentally disabled residents through operations including, among other things, community residences, day habilitation and respite
Defendant recently reevaluated its corporate structure because of concerns about the potential that defendant or its chapters could be held responsible for liabilities of another chapter. The Chapter objected to defendant's proposed restructuring and, instead, sought defendant's approval to incorporate separately while continuing a relationship with defendant on a contractual basis. Defendant refused to approve this plan and plaintiff, the Chapter's president, then commenced the instant action seeking, among other things, a judgment declaring that the Chapter is a separate and distinct entity from defendant and that the Chapter can incorporate, and directing defendant to transfer any assets held in defendant's name for the benefit of the Chapter to the newly incorporated organization. Defendant answered, raising several counterclaims and asserting affirmative defenses, including plaintiff's lack of standing and capacity to sue. After discovery, both parties moved for summary judgment. Supreme Court granted defendant's motion on the ground that plaintiff lacked capacity to sue and, therefore, it declined to decide, among other things, plaintiff's motion. Plaintiff appeals.
Supreme Court held that plaintiff lacked the capacity to sue, finding that the Chapter is merely an operational unit of defendant with no separate legal existence as an unincorporated association. We disagree. "[T]he word `association' is a broad term which may be used to include a wide assortment of differing organizational structures" (Mohonk Trust v Board of Assessors of Town of Gardiner, 47 N.Y.2d 476, 482-483 [1979]). An unincorporated association has been broadly defined as a "voluntary congregate entit[y]" (Community Bd. 7 of Borough of Manhattan v Schaffer, 84 N.Y.2d 148, 155 [1994]). Here, defendant undeniably exercises significant control over the Chapter, which operates under defendant's oversight and supervision pursuant to defendant's bylaws, chapter manual (hereinafter the manual), policies, and other documents governing the parties' relationship. The manual defines a chapter as "the basic organizational unit of [defendant], responsible within its territory for carrying out [defendant's] activities." The governing documents provide, among other things, that defendant's
In view of this determination, plaintiff asks that we address the substantive issues raised in the parties' motions regarding the Chapter's ability to sever its relationship with defendant and the consequences of such a severance. In the interest of judicial economy, we will exercise our authority to search the record and, insofar as possible, address the merits of the parties' respective summary judgment motions (see Nelson v Sweet Assoc., Inc., 15 A.D.3d 714, 716 n [2005]; Mazzocki v State Farm
We find no support within these documents for plaintiff's theory that the Chapter can sever its relationship with defendant by "disaffiliating" rather than by dissolving as a chapter. No provisions pertaining to disaffiliation appear in the manual or elsewhere in the governing documents. The termination of a chapter's status as such is addressed in a section of the manual entitled "Dissolving a Chapter." This provision states, among other things, that "[surrender] of [a chapter's] Certificate of Recognition is a voluntary dissolution of [the] [c]hapter by its members" and that a chapter's certificate may also be withdrawn by defendant's board of governors.
These provisions do not, however, permit a complete determination of the consequences such a severance may have on the Chapter's property and assets.
Nevertheless, the Chapter's ability to own and control property is strictly limited by other provisions in the governing documents. A provision of the manual entitled "Finance" states, in part, that "[a]ll funds and property given to or received by any [c]hapter shall belong to and be trust funds and property of [defendant], to be held for the beneficial use of people with mental retardation or other developmental disabilities in the area or sphere of activity of the [c]hapter." As to real property, the manual requires defendant's chapters to take title either as a chapter of defendant or, at the chapter's option, in the name of a holding company. Where property is titled in the name of a chapter of defendant, the manual provides that defendant must hold the property "for the beneficial use of the [c]hapter . . . unless the [c]hapter ceases to exist." In our view, the only reasonable interpretation of this provision is that property titled in this fashion is owned by defendant and that the Chapter is
However, not all of the Chapter's property is titled to defendant. The record indicates that the Chapter has also exercised its option to title some of its real property to its holding company. The manual provides chapters with a vehicle for separate local ownership of real property by authorizing them to form holding companies to take title to real property and establishes general requirements for the organization and operation of these corporations; however, it includes no provisions establishing the effect of a chapter's dissolution on its holding company or on property titled to the holding company. Nor does the record include the organizational documents of the Chapter's holding company, or other extrinsic evidence that might permit such a determination. The record is similarly inadequate with regard to any other funds, property or business assets that the Chapter may currently hold. Accordingly, this matter must be remitted to Supreme Court to determine the remaining questions in the action, including the effect that the Chapter's severance of its relationship with defendant, if it occurs, will have on ownership of real property titled to the Chapter's holding company, and any other personal property, funds or assets that may be currently owned or managed by the Chapter.
Ordered that the order is modified, on the law, without costs, by reversing so much thereof as partially granted defendant's motion for summary judgment and dismissed the complaint on the ground that plaintiff lacked capacity to sue; said motion denied to that extent, plaintiff's motion for summary judgment granted to the extent of declaring that plaintiff has capacity to commence this action, defendant's motion granted to the extent of declaring that the Chenango County Chapter of NYSARC, Inc. is required to abide by defendant's chapter manual, bylaws and other policies in the event that it withdraws from its status as a chapter of defendant, and matter remitted to the Supreme Court for further proceedings not inconsistent with this Court's decision; and, as so modified, affirmed.