Case Notes by

Richard Shore, Nixon Peabody

First published: Jun 2023
Much Ado About A Leak

While it was probably worth the shot at moving to dismiss based on what seem to be fairly damning emails that there is no leak damage in Apt. 4E coming from 5E’s bathroom, ultimately courts are often hesitant to rely on emails in a motion to dismiss as documentary evidence. Here, maybe if a moisture expert, or even a plumber, had undertaken the same testing as the super and issued a report, it is possible such would have been more appropriately relied upon as documentary evidence on a motion to dismiss. Still, the shareholders of Apt. 5E face an uphill battle, as the proprietary lease plainly provides the co-op access to examine the pipes in apartments in order to find and fix leaks.

Read full article
First published: Feb 2023
Attorney Fees: Who Will Foot The Bill?

The specific language relating to attorney’s fees in proprietary leases matters! If the language in the proprietary lease only provided for fees when prosecuting a shareholder default (and not, as here, defending a shareholder claim) or such fees were not explicitly categorized as additional rent, it is very possible this case could have gone the opposite way and the bank would have priority over the cooperative. If your board has not reviewed the attorney fee language in your co-op’s proprietary lease recently, it would be wise to have your attorney do so. You want to make sure it maximizes protection for the co-op.

Read full article
First published: Sep 2022
I Am Who I Say I Am

This is one of the first cases, if not the first, interpreting the language now codified in the recently enacted NPCL and BCL amendments allowing for board elections to have electronic voting, including voting by email and other electronic means. If this case is any indication of future decisions (and it is my bet that it is), courts will uphold board discretion as to the implementation of safeguards in electronic voting. Boards will likely have broad discretion in enacting safeguards in electronic voting. While boards should enact safeguards, they should be mindful of ensuring that the burdens do not prohibit voting by certain segments of shareholders.

Read full article
First published: Sep 2022
Lifesavers Bldg. Homeowners Group v. Bd. of Mgrs. of the Landmark Condo

TAKEAWAY This is one of the first cases, if not the first, interpreting the language now codified in the recently enacted NPCL and BCL amendments allowing for board elections to have electronic voting, including voting by email and other electronic means. If this case is any indication of future decisions (and it is my bet that it is), courts will uphold board discretion as to the implementation of safeguards in electronic voting. Boards will likely have broad discretion in enacting safeguards in electronic voting. While boards should enact safeguards, they should be mindful of ensuring that the burdens do not prohibit voting by certain segments of shareholders.

Read full article