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Iossa v. North Stars, Inc.

A-3792-01T3 (N.J. Super. App. Div. 2003) (Unpublished)

ASSOCIATIONS—Courts should avoid interfering with the internal affairs of voluntary associations, intervening only if a statute or public policy is violated or the association’s rules work an unconscionable hardship or contravene natural justice.

A member and treasurer of a private social club apparently, “contrary to the by-laws, engaged in misconduct in connection with entertainment at a bachelor party on the premises of the club, had improperly removed historical records belonging to the club and had engaged in other behavior deemed by the board of directors to be disruptive to the club, the board issued [the member] written notice that he was being suspended from his position as the treasurer.” He was given an opportunity to appear at a hearing and was given two alternative dates. He was advised that failure to appear would result in automatic termination. The member responded that his attorney was not available to attend and threatened legal repercussions if any action were taken against him. He appeared at the hearing as scheduled, but refused to return club property. The board terminated his membership and his position as treasurer. He filed suit seeking reinstatement and other restraints. The lower court heard arguments and held that: “If ever there was a case for judicial abstention, this is it. The Court declines to intervene in the internal affairs of the private social club… . No statute or public policy of the State of New Jersey was violated by defendants in this dispute among members of a voluntary association.” The Court held that terminating the officership and membership “had neither worked an unconscionable hardship, nor contravened ‘natural justice.’” The lower court also cited that member’s “defiant recalcitrance in the face of a clear, unmistakable and justifiable demand by the Board for the club’s books and records.” The Appellate Division agreed with the lower court’s decision and reasoning. It pointed out that the lower court “correctly recognized that it would be inappropriate for the court to entertain the matters in dispute as [the member] demanded. Courts are traditionally “‘hesitant’ to interfere with the internal affairs of voluntary associations – intervening only if a statute or public policy is violated or the governing rules work[] an unconscionable hardship or contravene[] natural justice.”

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