Cooperatives & Condominiums

Co-Op Board Vote Constitutes Evidence of Objectionable Behavior By Unit Owner

London Terrace Towers, Inc. v. Davis

NYLJ 12/22/04, p. 24, col. 1

Civil Ct., N.Y. Cty

(Lebovits, J.)

A co-op corporation sought summary judgment in its holdover proceeding against a tenant who had allegedly engaged in objectionable conduct, resulting in a board vote to terminate his proprietary lease. The court granted the co-op board's motion, holding that a vote by the co-op board to terminate the shareholder's tenancy constitutes competent evidence that the tenant had engaged in objectionable behavior.

Beginning in 1993, just months after the unit owner's tenancy began, the co-op board issued numerous warnings to the unit owner about various forms of objectionable conduct, ranging from unreasonably loud stereo volume, to using stairwells and hallways to store personal belongings, to stealing from residents who used common facilities. In addition, the co-op board has alleged that the unit owner allowed fires to begin in the unit, that building workers were pricked by hypodermic needles when they tried to unclog the unit owner's sink drain, and that the police had to be called to the apartment to break up a fight between the unit owner and one of his guests. In 2001, the board sent the unit owner a notice of objectionable conduct, advising him that it would consider terminating his lease if the conduct continued. Then, in August 2001, the board called a special meeting to consider terminating the unit owner's proprietary lease pursuant to a provision that permits termination by a vote of two-thirds of the directors. The board voted unanimously to terminate the unit owner's tenancy, but then agreed to give him a final opportunity to correct his behavior in return for his signed acknowledgment of his past behavior and his agreement to abide by the house rules. Then, in 2003, the board sent him another notice indicating that he had failed to comply with the 2001 agreement, and indicating that the board had scheduled another special meeting to decide whether to terminate the proprietary lease. At that meeting, the unit owner had an opportunity to answer allegations and to present evidence. The board voted to terminate the proprietary lease, and then brought this holdover proceeding.

In granting summary judgment to the co-op corporation, the court relied on 40 West 67th Street v. Pullman, 100 NY2d 147. In Pullman, the Court of Appeals held that the co-op board's termination of a unit owner's tenancy constituted competent evidence of objectionable conduct, obviating the need for a court's independent determination of objectionability. In Pullman, however, the vote of the co-op board was followed by a vote of the co-op shareholders. Dicta in the Pullman opinion suggested that courts should defer to the vote of a co-op board in cases where the proprietary lease permitted the board to terminate for objectionable conduct, but no court had previously held a board vote sufficient. In this case, the court held that the reasoning in Pullman clearly contemplated that a board vote of termination would suffice. Because the unit owner in this case had presented evidence to establish that the co-op board's actions were outside the scope of its authority, or that they did not further the co-operative's interest, or that they were taken in bad faith, the co-op board's determination was entitled to deference. As a result, the court awarded judgment to the co-op corporation.

Co-Op Board Vote Constitutes Evidence of Objectionable Behavior By Unit Owner

London Terrace Towers, Inc. v. Davis

NYLJ 12/22/04, p. 24, col. 1

Civil Ct., N.Y. Cty

(Lebovits, J.)

A co-op corporation sought summary judgment in its holdover proceeding against a tenant who had allegedly engaged in objectionable conduct, resulting in a board vote to terminate his proprietary lease. The court granted the co-op board's motion, holding that a vote by the co-op board to terminate the shareholder's tenancy constitutes competent evidence that the tenant had engaged in objectionable behavior.

Beginning in 1993, just months after the unit owner's tenancy began, the co-op board issued numerous warnings to the unit owner about various forms of objectionable conduct, ranging from unreasonably loud stereo volume, to using stairwells and hallways to store personal belongings, to stealing from residents who used common facilities. In addition, the co-op board has alleged that the unit owner allowed fires to begin in the unit, that building workers were pricked by hypodermic needles when they tried to unclog the unit owner's sink drain, and that the police had to be called to the apartment to break up a fight between the unit owner and one of his guests. In 2001, the board sent the unit owner a notice of objectionable conduct, advising him that it would consider terminating his lease if the conduct continued. Then, in August 2001, the board called a special meeting to consider terminating the unit owner's proprietary lease pursuant to a provision that permits termination by a vote of two-thirds of the directors. The board voted unanimously to terminate the unit owner's tenancy, but then agreed to give him a final opportunity to correct his behavior in return for his signed acknowledgment of his past behavior and his agreement to abide by the house rules. Then, in 2003, the board sent him another notice indicating that he had failed to comply with the 2001 agreement, and indicating that the board had scheduled another special meeting to decide whether to terminate the proprietary lease. At that meeting, the unit owner had an opportunity to answer allegations and to present evidence. The board voted to terminate the proprietary lease, and then brought this holdover proceeding.

In granting summary judgment to the co-op corporation, the court relied on 40 West 67th Street v. Pullman , 100 NY2d 147. In Pullman, the Court of Appeals held that the co-op board's termination of a unit owner's tenancy constituted competent evidence of objectionable conduct, obviating the need for a court's independent determination of objectionability. In Pullman, however, the vote of the co-op board was followed by a vote of the co-op shareholders. Dicta in the Pullman opinion suggested that courts should defer to the vote of a co-op board in cases where the proprietary lease permitted the board to terminate for objectionable conduct, but no court had previously held a board vote sufficient. In this case, the court held that the reasoning in Pullman clearly contemplated that a board vote of termination would suffice. Because the unit owner in this case had presented evidence to establish that the co-op board's actions were outside the scope of its authority, or that they did not further the co-operative's interest, or that they were taken in bad faith, the co-op board's determination was entitled to deference. As a result, the court awarded judgment to the co-op corporation.