First published: Aug 2024
Rules for Thee But Not for Me
TAKEAWAY: While a jury or judge will decide if there was unlawful racial discrimination here, this case highlights the complications that may arise when a first-floor cooperative or condominium unit, previously utilized as a doctor’s office, becomes vacant. Substantial renovations may be necessary to convert a medical office back to residential use, and such renovations would likely necessitate an amendment to the building’s certificate of occupancy. In the course of that process, the NYC Department of Buildings may inspect the entire building, and any resulting violations or required updates will result in extra costs to all unit owners or shareholders. In this case, however, the board’s decision to deny a medical office lease to an otherwise qualified African-American applicant while simultaneously allowing two other medical offices to operate in similar units exposed the condominium and the board to liability for unlawful racial discrimination.
ELANGO MEDICAL PLLC V. TRUMP PALACE CONDOMINIUM
WHAT HAPPENED: Dr. Peggy-Rose Elango, an African-American woman, is a licensed physician and the sole owner of Elango Medical PLLC. In January 2018, she viewed a potential office on the first floor of the Trump Palace Condominium at 200 East 69th Street in Manhattan. The listing described the space as a doctor’s office with a lobby/waiting area and two examination rooms. Despite some signs that use as a medical office might not be legally authorized, the space had been used for that purpose for more than 20 years and was outfitted for such use when Elango visited it.
When the plaintiffs made an offer to lease the space subject to board approval, the Trump Corporation, as agent for the board, rejected the application on the grounds that, under the condominium’s governing documents, the unit is supposed to be used only for residential purposes.
IN COURT: Dr. Elango sued the condominium and the board, as well as five other co-defendants, on claims including unlawful discrimination by the condominium in violation of the New York City and New York State Human Rights laws. After discovery, the condominium and the board moved for summary judgment.
The court said that the condominium defendants were entitled to dismissal of claims for aiding and abetting fraud because the conduct alleged against them – allowing the unit to be listed as an office, failing to advise Dr. Elango of the non-conforming use, and allowing the owner to rent the unit as a medical office in the past – was passive, rather than the affirmative assistance required to support a claim for aiding and abetting fraud.
However, the court said that the condominium was not entitled to dismissal of the claims for racial discrimination. Dr. Elango sufficiently alleged that she is a member of a protected class, that she sought and was qualified to lease the unit, that she was rejected, and that the denial of her application occurred under circumstances giving rise to an inference of discrimination, because the unit was consistently used as a medical office from 1993 until mid-2017, and that other similar units in the condominium were used as medical offices, despite the certificate of occupancy prohibiting such use.
The condominium defendants argued that the allegedly discriminatory rejection of the plaintiff’s application was taken not by themselves but by the Trump Corporation. The court rejected that defense saying that the condominium defendants are responsible for the Trump Corporation’s actions made as agents for the board.
