Case Notes by
Richard Siegler & Dale Degenshein, Stroock & Stroock & Lavan
Category
- Access
- Alterations
- Appeals
- Arbitration
- Assessment
- Attorney Fees
- Attorney-Client
- Authority to Sue
- Balcony/Terrace Rights
- Bike Lane
- Board of Directors
- Books and Records
- Breach of Lease
- Business Judgment Rule
- Bylaws
- Bylaws/House Rules
- Certificate of Occupancy
- Charges/Fees
- Commercial Unit
- Common Element
- Common Elements
- Companion Animal
- Constitutionality
- Construction Defects
- Contracts
- Conversion
- Defamation
- Discovery
- Discrimination
- Due Diligence
- Easement
- Elections
- Estate
- Eviction
- Eviction/Termination
- Fiduciary Duty
- Fines
- Foreclosure
- Fraud
- Governance
- Gym
- House Rules
- Indemnification
- Indemnification/Subrogation
- Injunction
- Insurance
- Labor Law
- Liability of Directors
- Licenses
- Liens
- Maintenance
- Malpractice
- Management
- Mechanic's Lien
- Misrepresentations
- Motion Practice
- Motion Practive
- Negligence
- Notice of Pendency
- Nuisance
- Occupancy Agreement
- Ownership
- Parking
- Partnership
- Personal Injury
- Pets
- Property Damage
- Proprietary Lease
- Reasonableness
- Receivership
- Release
- Repairs
- Representations
- Sales
- Sponsor
- Statute of Limitations
- Stock/Shares
- Stocks/Shares
- Sublets
- Succession Rights
- Tax
- Third-Party Liability
- Transfers
- Trespassing
- Trial Practice
- Violations
- Warranty of Habitability
- Yellowstone Injunction
- Zoning
First published: Mar 2012
NAR Apartments, LLC v. IppolitoAlthough this particular case is between a residential landlord and rental tenant, it is applicable to co-ops and condos and their apartment owners. Cases in which apartment residents who live in “no pet” buildings and request the right to maintain a pet as a reasonable accommodation because they serve as emotional support animals are often complicated. The matters are usually decided on a case-by-case basis, and the rules are evolving. In some matters, courts (and the State Division of Human Rights and city Commission on Human Rights – both venues where residents can file a complaint) may elect not to pursue an inquiry if the resident submits a letter from a doctor or psychologist asserting that the resident requires a pet as a reasonable accommodation and as an emotional support animal. Here, the court made clear that it was permitting the landlord to obtain discovery – both in the form of medical/psychological records and a deposition of the resident’s psychologist – so that the court could make an ultimate determination as to “the existence and/or extent of [the resident’s] purported disability, as well as the necessity of harboring a dog as an emotional support animal, assuming [the resident] is in fact disabled.” Further, this case raises an important issue for lessors and boards – to what extent can they rely on an agreement made with an occupant who later asserts that she is disabled and requires the very thing that they agreed to forego in the agreement as a reasonable accommodation. This issue, too, will be decided on a case-by-case basis, although we do not know the weight given by this court to the fact that the defendant signed the letter agreement without counsel. Nevertheless, it is apparent that, upon assertion of a claim of disability, the courts will allow further inquiry so that a resident may or may not be held to their agreement.
Read full articleFirst published: Feb 2012
Riverbay Corp. v. New York City CommissionOur experience has been that the courts have been somewhat inconsistent in determining what constitutes a reasonable accommodation and, more to the point, who gets to determine what is “reasonable” – the person requesting the accommodation or the building owner. The court here adopted the commission’s determination that, in a circumstance where material differences were found between gaining access through the front door and the side door and where the resident objected to access through the side door, it was improper for the cooperative corporation to fail to modify the front door. We are inclined to believe that, although it is only briefly mentioned in the decision, the statement made by Riverbay’s architect that access could have been obtained through the front entrance was an important factor in the commission’s decision to reject the administrative law judge’s recommendation and hold that Riverbay failed to provide a reasonable accommodation. We have found that courts often give weight to the opinions of a board’s professional, and further, that boards are often protected – both in the context of reasonable accommodation matters and claims of breach of fiduciary duty – when they act in accordance with the findings of their experts. Here, it appears as if Riverbay’s architect stated that access could be available through the front entrance at a cost of approximately $20,000, yet Riverbay elected to provide side-door access notwithstanding Rose’s objection. While case law is not entirely clear when it comes to reasonable accommodation requests, we do believe that a cooperative or condominium must consider the specific request of the resident and the advice of the building’s expert when making its determination concerning a reasonable accommodation.
Read full articleFirst published: Jan 2012
Hubshman v. 1010 Tenants Corp. and Carroll v. RadoniqiThese two cases discuss, among other things, a board’s duties to its apartment owners and, we believe, turn in part on procedural issues. The court in both of these actions (the same judge decided both within a month of each other) considered the procedural posture of the motions. Where a motion to dismiss is made, every favorable inference in the pleadings must be given to the plaintiff; when a motion for summary judgment is made, the court has the right to look beyond the pleadings and determine if there are any triable issues of fact that would preclude a grant of judgment. A motion to dismiss is a more difficult standard for a defendant, whereby a motion for summary judgment allows the court to search the record. In addition, the court dismissed the derivative claims brought by the plaintiffs in both actions “on behalf of” their respective co-op and condominium, acknowledging the deference that must be provided to the board under the Business Judgment Rule and, in the Carroll case, the condominium’s bylaws. The court made what we believe is an interesting distinction concerning the breach of fiduciary duty claims in the Hubshman case. There, the court determined (as have other, recent cases) that the cooperative housing corporation owes no fiduciary obligation to its shareholders. Further, the individual board members could not be found to have breached their fiduciary obligations absent allegations that they engaged in inappropriate conduct separate and independent from their actions as members of the board. Yet the court sustained an action against the cooperative “board,” having found that a board owes a duty to the shareholders, which we believe is a novel holding in the cooperative corporation field. We are not certain how this claim will ultimately be determined.
Read full articleFirst published: Jan 2012
Hubshman v. 1010 Tenants Corp. and Carroll v. RadoniqiThese two cases discuss, among other things, a board’s duties to its apartment owners and, we believe, turn in part on procedural issues. The court in both of these actions (the same judge decided both within a month of each other) considered the procedural posture of the motions. Where a motion to dismiss is made, every favorable inference in the pleadings must be given to the plaintiff; when a motion for summary judgment is made, the court has the right to look beyond the pleadings and determine if there are any triable issues of fact that would preclude a grant of judgment. A motion to dismiss is a more difficult standard for a defendant, whereby a motion for summary judgment allows the court to search the record. In addition, the court dismissed the derivative claims brought by the plaintiffs in both actions “on behalf of” their respective co-op and condominium, acknowledging the deference that must be provided to the board under the Business Judgment Rule and, in the Carroll case, the condominium’s bylaws. The court made what we believe is an interesting distinction concerning the breach of fiduciary duty claims in the Hubshman case. There, the court determined (as have other, recent cases) that the cooperative housing corporation owes no fiduciary obligation to its shareholders. Further, the individual board members could not be found to have breached their fiduciary obligations absent allegations that they engaged in inappropriate conduct separate and independent from their actions as members of the board. Yet the court sustained an action against the cooperative “board,” having found that a board owes a duty to the shareholders, which we believe is a novel holding in the cooperative corporation field. We are not certain how this claim will ultimately be determined.
Read full articleFirst published: Dec 2011
Shapiro v. 350 E. 78th Street Tenants Corp.In this situation, the co-op apparently attempted to solve its problem of a leaking and deteriorating roof by prohibiting the shareholder from using the area. The court stated that such a position violated the proprietary lease, which clearly gave the shareholder exclusive use of the area. In sum, the court found that – where a shareholder has use of an area of the building that the co-op has an obligation to maintain – the co-op must take steps to make sure that the area is available for its intended use. As the court noted, the plaintiffs paid for the right to use the area when they purchased, and paid for that right in their monthly maintenance charges. The question of what can be placed on the terrace was subject to the co-op’s standard alteration procedures, and the shareholders could not simply install what they wanted on the roof. As is typical, the co-op had the right to have its board and professional advisers review and approve any proposed plan to make sure, among other things, that the building envelope would not be damaged by any installation. We found the motion court’s reliance on the offering plan interesting. An offering plan is typically a “contract” between a sponsor/developer who converts the building to cooperative ownership and the shareholder who purchases from the sponsor. The plan may, in certain circumstances, be used for the purpose of clarifying an issue if it is ambiguous in the proprietary lease. We do not know why details of the offering plan were reviewed by the court in this case, although we suspect it was raised by one of the parties.
Read full articleFirst published: Dec 2011
Shapiro v. 350 E. 78th Street Tenants Corp.In this situation, the co-op apparently attempted to solve its problem of a leaking and deteriorating roof by prohibiting the shareholder from using the area. The court stated that such a position violated the proprietary lease, which clearly gave the shareholder exclusive use of the area. In sum, the court found that – where a shareholder has use of an area of the building that the co-op has an obligation to maintain – the co-op must take steps to make sure that the area is available for its intended use. As the court noted, the plaintiffs paid for the right to use the area when they purchased, and paid for that right in their monthly maintenance charges. The question of what can be placed on the terrace was subject to the co-op’s standard alteration procedures, and the shareholders could not simply install what they wanted on the roof. As is typical, the co-op had the right to have its board and professional advisers review and approve any proposed plan to make sure, among other things, that the building envelope would not be damaged by any installation. We found the motion court’s reliance on the offering plan interesting. An offering plan is typically a “contract” between a sponsor/developer who converts the building to cooperative ownership and the shareholder who purchases from the sponsor. The plan may, in certain circumstances, be used for the purpose of clarifying an issue if it is ambiguous in the proprietary lease. We do not know why details of the offering plan were reviewed by the court in this case, although we suspect it was raised by one of the parties.
Read full articleFirst published: Oct 2011
61 West 62 Owners Corp. v. CGM LLC, CGM EMP RTP LLC, West 63 Empire Associates, LLC and The Chetrit Group, LLC.This is an important case because it addresses what happens when there is a claim that a party is in violation of a city noise ordinance, yet the agency charged with enforcing the ordinance does not issue a violation. The state’s highest court made very clear in its decision that an injunction may be issued to stop the noise, even if a violation was not issued. While the lower court appreciated the situation of the residents, the judge did not believe that the co-op demonstrated that it was likely to succeed on the merits, i.e., that it would be able to show that Empire’s actions constituted a private nuisance. The appeals court disagreed, in part because of its finding that it was immaterial that a violation of city law had not been issued – even though representatives of the police and fire departments had visited the bar. Finally, this case confirms the long-standing principle that a co-op corporation can pursue an action on behalf of its shareholders.
Read full articleFirst published: Oct 2011
61 West 62 Owners Corp. v. CGM LLC, CGM EMP RTP LLC, West 63 Empire Associates, LLC and The Chetrit Group, LLC.This is an important case because it addresses what happens when there is a claim that a party is in violation of a city noise ordinance, yet the agency charged with enforcing the ordinance does not issue a violation. The state’s highest court made very clear in its decision that an injunction may be issued to stop the noise, even if a violation was not issued. While the lower court appreciated the situation of the residents, the judge did not believe that the co-op demonstrated that it was likely to succeed on the merits, i.e., that it would be able to show that Empire’s actions constituted a private nuisance. The appeals court disagreed, in part because of its finding that it was immaterial that a violation of city law had not been issued – even though representatives of the police and fire departments had visited the bar. Finally, this case confirms the long-standing principle that a co-op corporation can pursue an action on behalf of its shareholders.
Read full articleFirst published: Sep 2011
Siegler v. 875 Tenant Corp. and Himmelberger v. 40-50 Brighton First Road Apartments Corp.There have been a number of cases that have addressed the parties’ entitlement to fees under co-op documents, including the proprietary lease and alteration agreements. Courts will interpret agreements as contracts, according to their terms. The court concluded that, as there was no default in Siegler, there was no basis upon which to award fees. Similarly, in Himmelberger, it appears as if the co-op was required to retain security to protect its residents, yet at the same time had no vehicle through which to charge the cost to the shareholder, Henderson. We believe that most proprietary leases are insufficient to cover the myriad circumstances we see time and again, where co-ops are called upon to perform services or address issues as a result of the action of a single shareholder. Unless the reimbursement or indemnification provisions of a lease are revised in accordance with current best practices, it is likely that all shareholders will be required to pay costs incurred by the co-op because of the acts of a single shareholder.
Read full articleFirst published: Sep 2011
Siegler v. 875 Tenant Corp. and Himmelberger v. 40-50 Brighton First Road Apartments Corp.There have been a number of cases that have addressed the parties’ entitlement to fees under co-op documents, including the proprietary lease and alteration agreements. Courts will interpret agreements as contracts, according to their terms. The court concluded that, as there was no default in Siegler, there was no basis upon which to award fees. Similarly, in Himmelberger, it appears as if the co-op was required to retain security to protect its residents, yet at the same time had no vehicle through which to charge the cost to the shareholder, Henderson. We believe that most proprietary leases are insufficient to cover the myriad circumstances we see time and again, where co-ops are called upon to perform services or address issues as a result of the action of a single shareholder. Unless the reimbursement or indemnification provisions of a lease are revised in accordance with current best practices, it is likely that all shareholders will be required to pay costs incurred by the co-op because of the acts of a single shareholder.
Read full article