November 11, 2019 News

Morrison Cohen Defeats Synagogue Members’ Claims against Chelsea Rabbi

November 11, 2019 – Morrison Cohen attorneys Christopher Milito and Michael Mix obtained the complete dismissal of a complaint brought against a Rabbi accused of breach of contract, fraud, and other torts in connection with a historic West 23rd Street synagogue.

The plaintiffs (a small minority of congregants) filed a derivative action seeking more than $5 million in compensatory and punitive damages, alleging breaches of the lease with the synagogue; that the synagogue was fraudulently induced to enter into the lease; and that the Rabbi converted the synagogue’s property. 

Morrison Cohen moved to dismiss the complaint because the plaintiffs did not meet the statutory requirements to make a demand upon the synagogue’s board of trustees or to plead why such a demand would have been futile.  The plaintiffs pointed to a hodgepodge of communications to individual board members complaining about various actions taken by the Rabbi, but Morrison Cohen argued that such communications did not meet the statutory requirement because the plaintiffs did not request that the board take legal action and did not state that litigation would result from an improper refusal to sue.

The Court agreed with the firm’s argument.  On November 8, 2019, Justice Carol R. Edmead issued a Decision and Order dismissing the complaint for failure to meet the statutory demand requirement.  The Court reasoned that “plaintiffs merely urged a number of the trustees to prevail upon [the Rabbi] to act in the manner that plaintiffs demanded that [the Rabbi] act.”  According to the complaint, the failure of those trustees was not a failure to commence an action, but a failure “to do anything.”  The Court concluded that the plaintiffs’ failure to make a demand to initiate litigation required dismissal of the complaint. The decision was reported as a “Decision of Interest” in the article “Congregation Board Members Granted Dismissal of Complaint by Congregants (Gersten v. Wolff)“ in the November 21, 2019 issue of the New York Law Journal.