Cooperatives & Condominiums

Delay in Raising Claims Against Adjacent Unit Owner Precludes Injunctive Relief

Board of Managers of 500 West End Condominium v. Ainetchi

NYLJ 5/23/11, p. 18, col. 3

AppDiv, First Dept.

(memorandum opinion)

In an action by the condominium against a unit owner, the latter appealed from Supreme Court's dismissal, after trial, of its counterclaim against an adjacent unit owner who had made improvements in alleged violation of his purchase agreement. The Appellate Division modified to deny attorneys' fees to the improving unit owner, but otherwise affirmed, holding that delay in raising claims precluded the non-improving unit owner from obtaining injunctive relief.

The two protagonists in the dispute, Ainetchi and Maloney, own duplex apartments on the 13th and 14th floors of the condominium building. Maloney's purchase agreement prohibited him from applying to the Department of Buildings for a construction permit to enclose all or a portion of a terrace or other space appurtenant to the apartment without first obtaining Ainetchi's consent. Maloney nevertheless applied for a permit to build a pool, deck and shed on the terrace adjacent to this apartment without obtaining Ainetchi's consent. Maloney contended that the pool area was not appurtenant to his apartment, and thus not subject to the agreement. He argued that the pool area was a general common element, and that he had licensed the common area from the condominium for a payment of $315,960.52. The trial court agreed and awarded judgment, together with attorneys' fees, to Maloney.

In affirming on the substantive issue, the Appellate Division agreed that the pool area was neither essential nor reasonably necessary to Maloney's apartment, and was not therefore covered by the prohibition. The court also held that in any event Ainetchi could not establish any damages flowing from the alleged breach, and that Ainetchi's delay in seeking injunctive relief until after construction had started precluded award of an injunction. The court also indicated that Ainetchi lacked standing to challenge Maloney's alleged improper exercise of control over the common elements. The court held, however, that Malone was neither an aggrieved party on any contract claim nor a prevailing party, and as a result, was not entitled to attorneys' fees.

Co-Op Can Terminate Shareholder's Proprietary Lease

Application of Perry v. 61 Jane Street Tenants Corp.

NYLJ 5/26/11

Supreme Ct., N.Y. Cty.

(Oing, J.)

In an article 78 proceeding, tenant in a co-operative apartment sought to set aside the co-op board's decision to terminate its proprietary lease. The court denied the petition and dismissed the proceeding, holding that the business judgment rule applied to the co-op board's termination decision.

Before 2002, the tenant occupied a rent-stabilized apartment. Her landlord then induced her to give up the lease to that apartment in return for an agreement to permit her to occupy an apartment in the subject building, which the landlord would purchase. The co-op's rules would have prohibited long-term occupancy by the tenant, so she was given one share in the co-op, thus becoming a proprietary lessee. Her former landlord held the remaining 370 shares associated with the apartment. In 2009, the co-op board began receiving complaints about the tenant, first about the dogwalking business she operated from her apartment, and later about altercations in the lobby, including at least one that required the police to be called. The board wrote at least eight letters to the tenant about her behavior, but despite assurances that she would modify her behavior, the board continued to receive complaints. Ultimately, the board notified the tenant that it would hold a meeting to consider termination of her tenancy. She appeared with her counsel, and after counsel spoke, the board voted unanimously to terminate the proprietary lease and cancel her shares. The board then issued a notice of termination. The tenant then brought this article 78 proceeding, contending that the board's decision was arbitrary and capricious.

In denying the petition, the court held that the co-op's termination decision was protected by the business judgment rule. The court noted that the proprietary lease permitted termination if the tenant's objectionable conduct was repeated after she first received written notice, and if two-thirds of the co-op board voted to terminate at a meeting called for that purpose. In this case, both requisites were met. Moreover, the tenant failed to demonstrate any bad faith, arbitrariness, or discriminatory motive. Finally, the court rejected the tenant's argument that application of the business judgment rule is inconsistent with RPAPL 711[1], noting that the court of appeals had rejected that argument in 40 West 57th Street Corp. v. Pullman, 100 NY2d 147. As a result, the court ordered issuance of a warrant of ejectment.

No Private Nuisance Action for Smoking Within Condominium Apartment

Ewen v. Maccherone

NYLJ 6/2/11, p. 29, col. 4

AppTerm, First Dept.

(memorandum opinion)

In a private nuisance action by condominium unit owners against the owners of a neighboring unit, neighbors appealed from Civil Court's order denying their motion to dismiss the complaint. The Appellate Term reversed, concluding that no private nuisance action would like for smoking within the confines of neighbors' apartment.

Unit owners contend that second-hand smoke from neighbors' apartment seeped into their apartment through the walls, exacerbated by a building-wide problem with the design of the ventilation system. They contended that the smoke filled their kitchen, bedroom, and living room, often causing them to vacate their unit, and causing personal injury. They did not, however, join the condominium as a defendant, despite the alleged construction defect. Supreme Court denied neighbors' motion to dismiss the nuisance claim, and neighbors appealed.

In reversing, the Appellate Term first noted that the condominium board had never prohibited smoking within the confines of individual units, and then indicated that second-hand smoke seeping into an apartment is one of the annoyances a person must endure in a multiple-dwelling building. The court held that public policy issues militated against recognizing a nuisance cause of action under these circumstances.

Delay in Raising Claims Against Adjacent Unit Owner Precludes Injunctive Relief

Board of Managers of 500 West End Condominium v. Ainetchi

NYLJ 5/23/11, p. 18, col. 3

AppDiv, First Dept.

(memorandum opinion)

In an action by the condominium against a unit owner, the latter appealed from Supreme Court's dismissal, after trial, of its counterclaim against an adjacent unit owner who had made improvements in alleged violation of his purchase agreement. The Appellate Division modified to deny attorneys' fees to the improving unit owner, but otherwise affirmed, holding that delay in raising claims precluded the non-improving unit owner from obtaining injunctive relief.

The two protagonists in the dispute, Ainetchi and Maloney, own duplex apartments on the 13th and 14th floors of the condominium building. Maloney's purchase agreement prohibited him from applying to the Department of Buildings for a construction permit to enclose all or a portion of a terrace or other space appurtenant to the apartment without first obtaining Ainetchi's consent. Maloney nevertheless applied for a permit to build a pool, deck and shed on the terrace adjacent to this apartment without obtaining Ainetchi's consent. Maloney contended that the pool area was not appurtenant to his apartment, and thus not subject to the agreement. He argued that the pool area was a general common element, and that he had licensed the common area from the condominium for a payment of $315,960.52. The trial court agreed and awarded judgment, together with attorneys' fees, to Maloney.

In affirming on the substantive issue, the Appellate Division agreed that the pool area was neither essential nor reasonably necessary to Maloney's apartment, and was not therefore covered by the prohibition. The court also held that in any event Ainetchi could not establish any damages flowing from the alleged breach, and that Ainetchi's delay in seeking injunctive relief until after construction had started precluded award of an injunction. The court also indicated that Ainetchi lacked standing to challenge Maloney's alleged improper exercise of control over the common elements. The court held, however, that Malone was neither an aggrieved party on any contract claim nor a prevailing party, and as a result, was not entitled to attorneys' fees.

Co-Op Can Terminate Shareholder's Proprietary Lease

Application of Perry v. 61 Jane Street Tenants Corp.

NYLJ 5/26/11

Supreme Ct., N.Y. Cty.

(Oing, J.)

In an article 78 proceeding, tenant in a co-operative apartment sought to set aside the co-op board's decision to terminate its proprietary lease. The court denied the petition and dismissed the proceeding, holding that the business judgment rule applied to the co-op board's termination decision.

Before 2002, the tenant occupied a rent-stabilized apartment. Her landlord then induced her to give up the lease to that apartment in return for an agreement to permit her to occupy an apartment in the subject building, which the landlord would purchase. The co-op's rules would have prohibited long-term occupancy by the tenant, so she was given one share in the co-op, thus becoming a proprietary lessee. Her former landlord held the remaining 370 shares associated with the apartment. In 2009, the co-op board began receiving complaints about the tenant, first about the dogwalking business she operated from her apartment, and later about altercations in the lobby, including at least one that required the police to be called. The board wrote at least eight letters to the tenant about her behavior, but despite assurances that she would modify her behavior, the board continued to receive complaints. Ultimately, the board notified the tenant that it would hold a meeting to consider termination of her tenancy. She appeared with her counsel, and after counsel spoke, the board voted unanimously to terminate the proprietary lease and cancel her shares. The board then issued a notice of termination. The tenant then brought this article 78 proceeding, contending that the board's decision was arbitrary and capricious.

In denying the petition, the court held that the co-op's termination decision was protected by the business judgment rule. The court noted that the proprietary lease permitted termination if the tenant's objectionable conduct was repeated after she first received written notice, and if two-thirds of the co-op board voted to terminate at a meeting called for that purpose. In this case, both requisites were met. Moreover, the tenant failed to demonstrate any bad faith, arbitrariness, or discriminatory motive. Finally, the court rejected the tenant's argument that application of the business judgment rule is inconsistent with RPAPL 711[1], noting that the court of appeals had rejected that argument in 40 West 57th Street Corp. v. Pullman , 100 NY2d 147. As a result, the court ordered issuance of a warrant of ejectment.

No Private Nuisance Action for Smoking Within Condominium Apartment

Ewen v. Maccherone

NYLJ 6/2/11, p. 29, col. 4

AppTerm, First Dept.

(memorandum opinion)

In a private nuisance action by condominium unit owners against the owners of a neighboring unit, neighbors appealed from Civil Court's order denying their motion to dismiss the complaint. The Appellate Term reversed, concluding that no private nuisance action would like for smoking within the confines of neighbors' apartment.

Unit owners contend that second-hand smoke from neighbors' apartment seeped into their apartment through the walls, exacerbated by a building-wide problem with the design of the ventilation system. They contended that the smoke filled their kitchen, bedroom, and living room, often causing them to vacate their unit, and causing personal injury. They did not, however, join the condominium as a defendant, despite the alleged construction defect. Supreme Court denied neighbors' motion to dismiss the nuisance claim, and neighbors appealed.

In reversing, the Appellate Term first noted that the condominium board had never prohibited smoking within the confines of individual units, and then indicated that second-hand smoke seeping into an apartment is one of the annoyances a person must endure in a multiple-dwelling building. The court held that public policy issues militated against recognizing a nuisance cause of action under these circumstances.