Plaintiff New Jersey Association for Children with Learning Disabilities (NJACLD) is a nonprofit corporation of the State of New Jersey having as its object the assistance and conduct of educational programs for children affiliated with certain types of learning disabilities or difficulties. It was originally incorporated as the New Jersey Association for the Brain-Injured Children. The name was changed in 1970 when it received a charter from the Association for Children with Learning Disabilities, a nonprofit corporation with national membership.
Prior to 1969 certain local associations or groups were formed, among them a Burlington County Section, which sought and obtained affiliation with the NJACLD. The genesis of the Burlington County Section was entirely local. One of the prime organizers was Mrs. Josette Melman of Mount Holly, who, in 1965, having a child who was diagnosed as having "minimal cerebral dysfunction," or as being "brain-injured," and seeking help for the child, learned of the existence of the New Jersey Association and set about organizing the group which as stated became known as the Burlington County Section of NJACLD.
At this time the State Association was but recently organized. It had a small headquarters staff, and four or five
other sections had previously been organized throughout the State.
The organization of the NJACLD consisted and still consists of a central headquarters presently located in Convent Station, Morris County, New Jersey, and chapters or sections organized in a number of counties. The Burlington County Section was financed locally. This appears to have been true of the other sections as well. There is no evidence that the State Association had any independent financing, or any revenues at all except such as were contributed, as prescribed by the by-laws by the several operating sections.
The activities of Burlington County Section, initially consisting of a teen-age theatre workshop and a summer camp established on land in Rancocas State Park, the use of which was granted to the Burlington County Section by the State of New Jersey, were all undertaken and financed without assistance from the state organization. The success of the camp and other activities led the Burlington County Section to conceive the starting of a school.
Again, with the leadership of Mrs. Melman and a few others, the use of a church facility in Lumberton was obtained and a school was started which grew into and became the Midway School, which was approved by the State Department of Education, with local boards of education authorized to send and pay the tuition of children qualified and having the need to participate in its programs.
During the years 1968 to 1976 the Burlington County Section, although operating autonomously, adhered to the constitution and by-laws of the State Association and was recognized as a part thereof. Nevertheless, all its activities were organized and conducted with little supervision or assistance from the State Association. The only assistance rendered by the central organization was the furnishing of certain textbooks and school supplies. A portion of the dues of members of local sections was paid to the central organization.
Sometime prior to 1976 the constitution and by-laws of the State Association were revised. Among other changes in
the organization there was instituted what is referred to as central banking. Prior to this the Burlington County Section maintained its own records and its own bank accounts, received its own revenues and paid its own expenses, including all salaries and operating expenses of its camp and school activities. With the advent of central banking the Section was required to remit all revenues to the State Association, which, in turn, paid all bills of the local sections. The purpose of this system was ostensibly administrative efficiency and the avoidance of multiple book and record keeping by the local sections. However well conceived in theory, the system developed difficulties in practice. There was testimony that considerable revenues received by the Burlington County Section and transmitted to the State Association were not accounted for, and some important expenses of the Section, when forwarded to the State Association, were either paid tardily or were not paid at all.
Dissatisfaction with the operation of the state organization at length led the Burlington County Section to reach the decision that it should sever its association with the State Association and become wholly independent thereof. At a special meeting of the Section membership, called February 27, 1976, the members present unanimously adopted a resolution to "disassociate" from the NJACLD. From that time forward the local organization has discontinued all connection with the New Jersey Association. A nonprofit corporation, Burlington County Association for Children with Learning Disabilities (BCACLD), was formed in June 1976 and has since operated the various continuing ...