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Delspina v. Woscha Inc.

Decided: January 19, 1988.

NICHOLAS DELSPINA, PLAINTIFF-APPELLANT-CROSS-RESPONDENT,
v.
WOSCHA, INC., ANTHONY J. MINNITI, COUNCIL PRESIDENT OF TOWNSHIP OF WEST ORANGE, JOSEPH P. BRENNAN, JR., PETER DUNN, TOBY KATZ AND GLENN V. SORGE, AS TOWNSHIP COUNCIL, DEFENDANTS-RESPONDENTS, AND NEW JERSEY HOUSING & MORTGAGE FINANCE AGENCY, UNITED STATES OF AMERICA, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, DANIEL WEISS, ALFRED SHARKEY, CAROL COPPOLA, ELEANOR SORGE, NATHANIEL GREEN, ROBERT M. MANGINO AND COUNCILMAN PETER DUNN, DEFENDANTS, AND SAMUEL A. SPINA, MAYOR OF TOWNSHIP OF WEST ORANGE, DEFENDANT-RESPONDENT-CROSS-APPELLANT



On appeal from Superior Court of New Jersey, Law Division, Essex County.

Brody, Long and Scalera. The opinion of the court was delivered by Brody, J.A.D.

Brody

Plaintiff commenced this action to declare invalid a resolution of the Council of the Township of West Orange that purports to replace him as a "trustee" of the West Orange Senior Citizens Housing Association (WOSCHA). Defendant Samuel A. Spina, Mayor of West Orange, asserting in a "Sixth Separate Defense" that he alone has the authority to appoint trustees to WOSCHA, sought a declaration of that authority "should the Court determine that appointments are to be made as a result of the within litigation." The trial judge decided in a letter opinion that the Council properly appointed plaintiff's successor. Plaintiff and Spina appeal. We affirm.

The tangled history of this dispute begins in 1970 when the Town (West Orange later became a Township) Council decided that certain land, then owned by the Town, should be used for the construction of moderate income senior citizen housing (the project). The Council wanted the project to be privately operated in order to spare the Town financial, operational and liability responsibilities. At the same time, it wanted to be sure that the project's sponsors and managers would reflect the views of the West Orange electorate.

These objectives were expressed in a resolution the Council adopted in November 1970 that created an "Association" of seven members. The Association was free to undertake the project by organizing "in corporate or non-corporate form as its members hereafter determine." In order to maintain the

project's "community-oriented, broadly-representative" character, the resolution provided that two members of the Association be chosen by the Mayor and five by the Council. Members were to serve for stated terms after which their successors would be appointed in the same manner. The Council amended the resolution in 1976 to provide that the Mayor appoint one member and the Council appoint the other six, one of whom must be a councilman. The 1970 resolution contained the following provision which was "ratified and confirmed" in the 1976 resolution:

Any articles of incorporation, by-laws, or other documents governing the affairs of the Association shall be consistent with all the provisions contained herein.

By a companion resolution to the 1970 resolution, the Mayor and the Council appointed the Association's first seven members. Shortly thereafter the Association members formed a nonprofit corporation, The West Orange Senior Citizens Housing Association (WOSCHA), under the provisions of N.J.S.A. 15:1-1 et seq. That statute, superseded in 1983 by N.J.S.A. 15A:1-1 et seq., denominated the governing body of a nonprofit corporation the board of trustees. WOSCHA's certificate of incorporation named the original Association members as its Board of Trustees. The trustees promptly applied to the New Jersey Housing Finance Agency (HFA) for financing.

For reasons apparently related in part to HFA financing, the members of the Association abandoned WOSCHA and in 1972 formed another corporation, WOSCHA, Inc., under the Limited-Dividend Nonprofit Housing Corporations or Associations Law, N.J.S.A. 55:16-1 et seq. That statute denominates the governing body of a limited dividend corporation the Board of Directors. The original members of the Association became WOSCHA, Inc.'s first Board of Directors.*fn1

The present dispute arises out of a conflict between provisions in WOSCHA, Inc.'s certificate of incorporation and provisions in its by-laws, adopted in 1976, regarding the manner of appointment to its Board of Directors. Article V of the certificate provides:

The corporation shall have between five (5) and nine (9) directors, as fixed by the By-Laws who shall be elected by the common stockholders*fn2 at their regular annual meetings and who shall serve as such until their successors are duly chosen and qualified. The incorporators shall serve as ...


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