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
- Service of Process
- 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: Jul 2011
Kikis v. 1045 Owners Corp.This case involved a situation where the board asserted that it had a policy in place concerning home equity loans, but the policy did not appear in the proprietary lease or bylaws. If a board resolution was passed, it was very recent. While it is difficult to determine from the decision, it appears as if the form purchase application distributed by the managing agent advised purchasers that HELOCs could not be secured by the shares. In any event, the case raises the question of whether a board can promulgate and enforce a policy even if it is not in the governing documents or house rules. Although the court did not cite or reference the proprietary lease or bylaws, we must presume that the policy did not violate any specific provisions of the documents. Accordingly, the court found that the policy – which was consistently applied to all shareholders – would be upheld in accordance with the Business Judgment Rule. This is consistent with a number of other post-Levandusky cases that have refused to interfere with decisions of boards provided the shareholder did not demonstrate that the board acted beyond its authority or in a way that did not further the co-op’s legitimate purpose or in bad faith. It is also consistent with a pre-Levandusky case reported in this column in the July/August 1985 edition of Habitat. There, we discussed Browne v. 930 Fifth Corporation, where a shareholder wanted to use his shares to secure a loan to purchase real estate in Westchester County. The board refused to sign a recognition agreement, and the shareholder sued. Consistent with the later decision in Kikis, the court dismissed Browne’s complaint as the co-op was not required to execute the recognition agreement. Kikis also reminds us that cases will not be sustained against individual board members absent a showing, with specific allegations, that they committed a tort separate and independent from any action they may have taken in their capacity as board members.
Read full articleFirst published: Jun 2011
Carpenter v. Churchville Greene Homeowners’ Association Inc.The court first made clear when discussing the concrete pad that, once an issue is resolved with no likelihood that it will recur, the matter is no longer actionable. We suspect that this is particularly the case in this instance as the matter was resolved within three weeks of plaintiffs’ request that they be permitted to install the concrete pad and that no ascertainable damages accrued during that period. With respect to the parking issue, the court noted in a footnote the plaintiffs’ burden – specifically that allowing disabled guests to park close to their home is “necessary for the equal use and enjoyment of their home in light of their own disabilities …” We question whether the plaintiffs will be able to meet this burden as it is their friends – and not the plaintiffs themselves – who apparently require a parking accommodation. Interestingly, although the HOA denied the request based on fire safety concerns, the decision does not indicate that the defendants presented any evidence that parking on the private road would constitute a violation of an applicable fire code. We question whether if this were the case, it would have affected the court’s determination. In sum, the court gave the plaintiffs an opportunity to prove their claims by allowing them to take the depositions of the individual board members and management company. The court also gave the defendants the right to make another motion for summary judgment at the conclusion of those depositions, i.e., after the plaintiffs had an opportunity to obtain the information they said they needed. Finally, while this case involved an HOA, the legal principles at issue here would apply if the property was either a co-op or a condominium.
Read full articleFirst published: Jun 2011
Carpenter v. Churchville Greene Homeowners’ Association Inc.The court first made clear when discussing the concrete pad that, once an issue is resolved with no likelihood that it will recur, the matter is no longer actionable. We suspect that this is particularly the case in this instance as the matter was resolved within three weeks of plaintiffs’ request that they be permitted to install the concrete pad and that no ascertainable damages accrued during that period. With respect to the parking issue, the court noted in a footnote the plaintiffs’ burden – specifically that allowing disabled guests to park close to their home is “necessary for the equal use and enjoyment of their home in light of their own disabilities …” We question whether the plaintiffs will be able to meet this burden as it is their friends – and not the plaintiffs themselves – who apparently require a parking accommodation. Interestingly, although the HOA denied the request based on fire safety concerns, the decision does not indicate that the defendants presented any evidence that parking on the private road would constitute a violation of an applicable fire code. We question whether if this were the case, it would have affected the court’s determination. In sum, the court gave the plaintiffs an opportunity to prove their claims by allowing them to take the depositions of the individual board members and management company. The court also gave the defendants the right to make another motion for summary judgment at the conclusion of those depositions, i.e., after the plaintiffs had an opportunity to obtain the information they said they needed. Finally, while this case involved an HOA, the legal principles at issue here would apply if the property was either a co-op or a condominium.
Read full articleFirst published: May 2011
Taylor v. Harbour Pointe Homeowners Association and Candace GraserWe frequently see situations where apartment owners or homeowners are unable to keep their premises in a clean and orderly condition. This is important – as it was in this case – for maintaining the community and allowing the entire development to be at its best when neighbors are attempting to sell their homes. It is also important in vertical communities where often clutter brings bugs, odors, vermin, and other conditions to the apartment and neighboring apartments. This case makes clear that a board is not required to make a reasonable accommodation to address a disability unless unit-owners advise that they have a disability and that an accommodation is necessary to allow them to enjoy their home. Here, while it appears that the plaintiff hinted at a disability, at no point did she specifically tell the board that she could not clean her patio because of depression or any other disability. Nor did she tell the board that her desire to clean the patio at her own pace and in her own time was a request for an accommodation that, if denied, would make her unable to use and enjoy her house. While we cannot comment on whether the individuals in the community properly conducted themselves when they cleaned the patio and removed some items, we believe that it is the better practice to obtain a court order or a unit-owner’s specific consent before cleaning or moving items from that person’s dwelling.
Read full articleFirst published: May 2011
Jason Roer v. 150 West End Avenue Owners Corp.A general waiver of liability for injuries that occur in the exercise room of a co-op may not be enforceable by law. Under New York statutory law, any contractual provision that exempts the owner or operator of an exercise room for liability for damages caused by its own negligence is unenforceable. Therefore, the contract that the co-op required its shareholders to sign as a prerequisite for using the exercise room may not be enforced under all circumstances. It is imperative that co-op (and condo) boards using these general waivers of liability consult with their legal advisers to ensure that the agreements give the board the greatest protection available, and to make sure boards understand that full and complete protection may not exist. Additionally, this case highlights that when the acts of a third person intervene, the connection between alleged wrongdoers is not automatically severed. In such a case, liability turns upon whether the intervening act is a normal or foreseeable consequence of the situation created by the alleged negligence of the co-op or condo. Thus, even if another resident (such as Sarnoff) or outside actor breaks the chain of causation, the issue will still be whether the exercise room was operated in a safe and reasonable manner. Finally, there is no indication in the decision about whether the co-op’s insurance carrier provided a defense or whether the actions described allowed the insurance carrier to disclaim liability or defend pursuant to a reservation of rights (we note that the court filings indicate that a carrier may have been involved). It is advisable that boards have their insurance professionals review their policies to ensure that there is coverage and that the board comply with all requirements of the carrier concerning operation of the exercise facility.
Read full articleFirst published: May 2011
Taylor v. Harbour Pointe Homeowners Association and Candace GraserWe frequently see situations where apartment owners or homeowners are unable to keep their premises in a clean and orderly condition. This is important – as it was in this case – for maintaining the community and allowing the entire development to be at its best when neighbors are attempting to sell their homes. It is also important in vertical communities where often clutter brings bugs, odors, vermin, and other conditions to the apartment and neighboring apartments. This case makes clear that a board is not required to make a reasonable accommodation to address a disability unless unit-owners advise that they have a disability and that an accommodation is necessary to allow them to enjoy their home. Here, while it appears that the plaintiff hinted at a disability, at no point did she specifically tell the board that she could not clean her patio because of depression or any other disability. Nor did she tell the board that her desire to clean the patio at her own pace and in her own time was a request for an accommodation that, if denied, would make her unable to use and enjoy her house. While we cannot comment on whether the individuals in the community properly conducted themselves when they cleaned the patio and removed some items, we believe that it is the better practice to obtain a court order or a unit-owner’s specific consent before cleaning or moving items from that person’s dwelling.
Read full articleFirst published: May 2011
Jason Roer v. 150 West End Avenue Owners Corp.A general waiver of liability for injuries that occur in the exercise room of a co-op may not be enforceable by law. Under New York statutory law, any contractual provision that exempts the owner or operator of an exercise room for liability for damages caused by its own negligence is unenforceable. Therefore, the contract that the co-op required its shareholders to sign as a prerequisite for using the exercise room may not be enforced under all circumstances. It is imperative that co-op (and condo) boards using these general waivers of liability consult with their legal advisers to ensure that the agreements give the board the greatest protection available, and to make sure boards understand that full and complete protection may not exist. Additionally, this case highlights that when the acts of a third person intervene, the connection between alleged wrongdoers is not automatically severed. In such a case, liability turns upon whether the intervening act is a normal or foreseeable consequence of the situation created by the alleged negligence of the co-op or condo. Thus, even if another resident (such as Sarnoff) or outside actor breaks the chain of causation, the issue will still be whether the exercise room was operated in a safe and reasonable manner. Finally, there is no indication in the decision about whether the co-op’s insurance carrier provided a defense or whether the actions described allowed the insurance carrier to disclaim liability or defend pursuant to a reservation of rights (we note that the court filings indicate that a carrier may have been involved). It is advisable that boards have their insurance professionals review their policies to ensure that there is coverage and that the board comply with all requirements of the carrier concerning operation of the exercise facility.
Read full articleFirst published: Apr 2011
The Plaza PH2001 LLC v. Plaza Residential Owner LPThe lower courts have not always been consistent in their interpretation of no-representation clauses similar to the one at issue in this case. Here, plaintiff was shown a mock-up and a virtual computer rendering of the apartment. Yet, because this was done before plaintiff entered into its purchase agreements, and because the purchase agreements contained the “no representation” language, the court determined that plaintiff had no right to rely on the mock-up. Had the mock-up been made an exhibit to the contract, or had the terms of the contract included the specific representations plaintiff claimed the sponsor had made, we believe the decision might have been different. In addition, plaintiff failed to allege all potential causes of action in the 2008 action. Because of the legal principle of “res judicata,” plaintiff could not take a second bite of the apple and relitigate the same facts through different causes of action. Indeed, the claims plaintiff made in the second action included alleged violations of the Martin Act and the Interstate Land Sales Full Disclosure Act, neither of which had been argued in the 2008 action. However, because the factual basis of these claims had been litigated and fully and finally decided, the court refused to consider them in the 2010 action. We do not know how the court would have considered these specific claims had they been brought in the 2008 action. We understand that the decision from the 2008 action has been appealed to the appellate division. We will wait to see whether that court agrees with the lower court that the no-representation language in the purchase agreements precludes plaintiff from maintaining an action for a return of the down payments. Further, if the 2010 decision is similarly appealed, we await the appellate court’s advice on whether any of the new claim can survive notwithstanding the decision in the 2008 case. This case cautions buyers. If purchasing an apartment that is not yet built, and if you are purchasing because of representations made concerning the layout, size, number of windows, number of skylights, etc. – make sure it is in writing and is attached and incorporated into the purchase agreement. It is also a caution to all litigants that all claims be asserted at the time of the initial action so that they are not precluded by the doctrine of res judicata.
Read full articleFirst published: Apr 2011
LI Equity Network LLC v. Village in the Woods Owners Corp.The case is consistent with other cases that have held that, provided the terms of sale contain a provision making the sale subject to the rules of a co-op, a successful bidder should not expect to be able to immediately move in to the apartment. To the contrary, the bidder must be prepared to comply with the rules, regulations, and policies established by the co-op. This may result in the co-op refusing to issue the shares and lease to the successful bidder. Based on the court’s analysis of who is bound by the terms of sale, we do not know how the court would have decided the case if the terms of sale had not included language making the auction subject to the terms and conditions of the co-op’s governing documents. As there may be more nonjudicial foreclosure sales given the recent economic climate, we caution boards to be proactive and make certain that the terms of any sale include provisions making it clear that the sale is subject to the co-op’s governing documents.
Read full articleFirst published: Apr 2011
The Plaza PH2001 LLC v. Plaza Residential Owner LPThe lower courts have not always been consistent in their interpretation of no-representation clauses similar to the one at issue in this case. Here, plaintiff was shown a mock-up and a virtual computer rendering of the apartment. Yet, because this was done before plaintiff entered into its purchase agreements, and because the purchase agreements contained the “no representation” language, the court determined that plaintiff had no right to rely on the mock-up. Had the mock-up been made an exhibit to the contract, or had the terms of the contract included the specific representations plaintiff claimed the sponsor had made, we believe the decision might have been different. In addition, plaintiff failed to allege all potential causes of action in the 2008 action. Because of the legal principle of “res judicata,” plaintiff could not take a second bite of the apple and relitigate the same facts through different causes of action. Indeed, the claims plaintiff made in the second action included alleged violations of the Martin Act and the Interstate Land Sales Full Disclosure Act, neither of which had been argued in the 2008 action. However, because the factual basis of these claims had been litigated and fully and finally decided, the court refused to consider them in the 2010 action. We do not know how the court would have considered these specific claims had they been brought in the 2008 action. We understand that the decision from the 2008 action has been appealed to the appellate division. We will wait to see whether that court agrees with the lower court that the no-representation language in the purchase agreements precludes plaintiff from maintaining an action for a return of the down payments. Further, if the 2010 decision is similarly appealed, we await the appellate court’s advice on whether any of the new claim can survive notwithstanding the decision in the 2008 case. This case cautions buyers. If purchasing an apartment that is not yet built, and if you are purchasing because of representations made concerning the layout, size, number of windows, number of skylights, etc. – make sure it is in writing and is attached and incorporated into the purchase agreement. It is also a caution to all litigants that all claims be asserted at the time of the initial action so that they are not precluded by the doctrine of res judicata.
Read full article