The co-op tried to limit the amount that the plaintiff could recover by asserting that the plaintiff had to have started the action within three years of when the conditions began. While the court limited some of the damages plaintiff could recover, it also explained that a six-year period was applicable in most instances. In passing, the court discussed an important rule which was been well established by the courts - that a tenant or shareholder cannot recover damages for breach of the warranty of habitability unless they live in the apartment. Further, the court explained one of the exceptions to the Business Judgment Rule. If a co-op has a contractual obligation, it cannot avoid it by claiming that it is in the best interest of the co-op to not perform. Thus, if a proprietary lease requires a co-op to act (or bylaws require a condominium to act), the entity cannot ignore its obligations by reliance on the Business Judgment Rule. Finally, the court discussed the qualified privilege or common interest exception to claims of defamation. This privilege – which protects speech where all parties have an interest in the subject matter – is important because it allows a free flow of communication about co-op or condo matters so long as statements are not made with malice.
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