April 28, 1994
NOTE: MODIFIED BY RULE 100.4(C)(3)(b)(i)
The Rules Governing Judicial Conduct were amended in 1996. Rule 100.4(C)(3)(b)(i) now provides as follows:
(b) A judge as an officer, director, trustee or non-legal advisor, or a member or otherwise:
(i) may assist such an organization [an organization devoted to the law, the legal system or the administration of justice or an educational, religious, charitable, cultural, fraternal or civic organization not conducted for profit] in planning fund-raising and may participate in the management and investment of the organization's funds, but shall not personally participate in the solicitation of funds or other fund-raising activities.
Digest: A full-time judge may serve as a member of a Board of Trustees of a not-for-profit condominium trust and receive nominal compensation, but may not render legal or investment advice or participate in decisions likely to lead to litigation. Compliance is required with the rules governing the reporting of extra-judicial compensation.
Rules: 22NYCRR100.2; 100.5(b); 100.5(c)(1),(2); 100.6; Code of Judicial Conduct, Canons 2A, 2B; Opinion 88-98, Vol. II.
A recently elected full-time judge asks whether it is permissible to remain a member of the Board of Trustees of an out-of-state, not-for-profit time share resort. The judge was elected to the three member Board of Trustees for this not-for-profit real estate trust which has general oversight over the operation of the trust run by a resort manager on a day-to-day basis. The condominium, totaling 20 units, is a combination of 12 whole owner condominiums and 8 time shared units, where each week is owned by individuals, with a maximum ownership of 408. The judge does not own a week in the time share but his two sisters and their husbands each own two weeks.
While the trust earns no income and the revenues consist entirely of maintenance fees paid by the owners, the by-laws do provide for reasonable compensation to the trustees while engaged in trust business. The current resolution in effect provides for a trustee to be compensated at the rate of $15/hour for time spent on trust business and travel to and from the resort. Presently the three trustees meet approximately three times per year to review trust business, with an annual meeting conducted in the Spring. The judge estimates this would involve 25 to 30 hours of time spent on trust business each year.
Under the circumstances presented, the committee concludes that in view of the absence of any rule explicitly forbidding such activity, the not-for-profit nature of the enterprise, and the nominal compensation involved, it would be ethically permissible for the judge to serve as a trustee of this non-profit organization, provided that neither legal nor investment advice is rendered and that the judge does not participate in decision likely to involve litigation.
We previously determined that a full-time judge could serve as a member of a residential cooperative board of directors (See Opinion 88-98, Vol. II).
In Opinion 88-98, supra, we stated:
“Several cautions are in order nevertheless. As already noted under section 100.5(b), the judge should not give legal or investment advice to the cooperative. Further, to avoid appearances of impropriety under section 100.2(a) and (c), and 100.5(c)(1), and Canons 2A and 2B of the Code of Judicial Conduct, the judge should avoid participating in decisions of the cooperative board which are likely to lead to litigation in any court. A cooperative board’s duty to approve prospective purchasers of apartments is particularly sensitive and the judge should not serve on the board unless he or she can arrange to abstain from voting on such approvals.” (See 22 NYCRR sections 100.2(c), 100.f(b), 100.5(c)(1), 100.5(c)(2), Canons 2A, 2B Code of Judicial Conduct).
The strictures referred to in Opinion 88-98 are equally applicable in this instance. Further, there must be compliance with the rules governing the reporting of extra-judicial compensation. See Section 100.6 of the Rules of the Chief Administrator.