Victor Metsch | Smith Gambrell & Russell LLP | October 18, 2018
When this old world starts getting me down
And people are just too much for me to face
I climb way up to the top of the stairs
And all my cares just drift right into space…[*]
Every aspect of residential cooperative or condominium life sooner or later becomes the subject of disagreement. And disputes as to responsibility for maintaining, and the right to use or build on, the roof are frequent in our Courts. A few recent examples follow:
Hersh v. One Fifth Ave. Apt. Corp., 2018 NY Slip Op 05522, App. Div. 1st Dept. (July 26, 2018)
Supreme Court granted defendant’s motion to dismiss the claim for breach of fiduciary duty and denied plaintiff’s motion to amend the complaint.
The Appellate Division summarized the facts and complaint:
In this case, plaintiff alleges that her apartment sustained extensive water infiltration due, in large part, to the condition of the greenhouse on the roof terrace located on the floor above her. According to plaintiff, the individual owners of the offending greenhouse (defendants Alan Belzer and Susan Martin), the cooperative (defendant One Fifth Avenue Corp.), and the individual board members failed to adequately address and remedy the situation, and their failure to act resulted in catastrophic water damage to plaintiff’s apartment[.]
And affirmed dismissal of the complaint as against the individual cooperative board member:
It is well-settled that a breach of fiduciary duty claim does not lie against individual cooperative board members where there is no allegation of “individual wrongdoing by the members…separate and apart from their collective actions taken on behalf of the” cooperative…Here, the complaint does not allege that any of the individual board members committed an independent wrong that was distinct from the actions taken as a board collectively. Thus, the breach of fiduciary duty claim is not viable. Because the proposed amended complaint fails to cure this deficiency, plaintiff’s motion seeking to amend the complaint was properly denied.
Contrary to plaintiff’s contention, this result is entirely consistent with Fletcher v Dakota, Inc….In Fletcher, we concluded that “although participation in a breach of contract will typically not give rise to individual director liability, the participation of an individual director in a corporation’s tort is sufficient to give rise to individual liability”…Thus, we declined to dismiss claims against a cooperative board director who was alleged to have participated in the cooperative’s violation of the State and City Human Rights Laws.
Here, in contrast, there is no viable corporate tort alleging breach of fiduciary duty, because a corporation owes no fiduciary duty to its shareholders…Thus, in the absence of a corporate tort in which the individual board members could have participated, the breach of fiduciary duty claim as against them was properly dismissed. Indeed, Fletcher made this very point by dismissing the breach of fiduciary duty cause of action against an individual board director, while at the same time sustaining Human Rights Law claims against him.
Fairmont Tenants Corp. v. Braff, 2018 NY Slip Op 04083, App. Div. 1st Dept. (June 7, 2018)
Supreme Court granted Fairmont’s motion for summary judgment, denied Braff’s motion for summary judgment and declared that the cooperative had right, title and interest to the roof adjacent to units 2F and 2G and enjoined Braff from occupying or using that space.
The Appellate Division summarized the dispositive provision of the proprietary lease:
There are no issues of fact requiring a trial. The proprietary lease defines the apartment as “the rooms in the building as partitioned on the date of the execution of this lease designated by the above-stated apartment number, together with their appurtenances and fixtures and any closets, terraces, balconies, roof, or portion thereof outside of said partitioned rooms, which are allocated exclusively to the occupant of the apartment” (emphasis added). This clause is ambiguous because it is unclear from the lease whether the disputed roof area has been exclusively assigned to defendants. As such, the court properly looked to extrinsic evidence, including the offering plan, which is a “controlling document” that gives the proprietary lease meaning…The offering plan makes clear that there is no outdoor space allocated exclusively to defendants’ apartment.
And concluded that:
Supreme Court also properly granted plaintiff summary judgment dismissing defendants’ waiver defense and counterclaim. Paragraph 26 of the lease addresses “facilities outside the apartment,” and under this provision, the Coop has a revocable license to that area…Further, the coop’s knowledge of defendants’ use of the roof space does not raise issues of fact regarding the coop’s waiver of a right under the lease in light of an unambiguous no waiver clause[.]
Supreme Court also properly dismissed defendants’ adverse possession defense and counterclaim. It is undisputed that defendants have permitted workmen on the roof at issue in 2015, and that they have given access to the roof space to building staff from time to time. Accordingly, the court properly found that defendants’ use of the roof space was not “exclusive” for any period of time prior to 2015[.]
Finally, defendants’ continued trespassing on the roof space entitles the coop to injunctive relief as the irreparable injury is the interference with the coop’s property rights[.]
Lee v. Scott, 2018 NY Slip Op 31029(U), Sup. Ct. N.Y. Co. (May 29, 2018)
Supreme Court, entertaining plaintiff’s motion for summary judgment in a roof rights dispute, summarized the background:
In September 1996, sponsor Bennco Properties, Inc….converted a five-story garage into a mixed-use condominium building…pursuant to the Offering Plan. Stefan Benn…was the principal of Bennco. Le Toulouse Condominium is located at 79-81 East 2nd Street, New York, New York. Charles W. Weiss, attorney for the Sponsor, filed the Declaration of Condominium and By-Laws…in December 1996. Article Fourth of the Declaration provided for five total units — four residential units and one commercial unit…The Declaration zoned Unit C-1 for commercial and residential use, and restricted the four remaining units, Units R-1 to R-4, to single family residential use only…Each residential unit occupies one floor of the second through fifth floors of the Condominium.
In February 2004, Bennco transferred ownership of residential Unit R-3 and Unit R-4 to Stefan Benn. In December 2012, Benn transferred ownership of Units R-3 and R-4 to the LGB Family LLC…with Benn as its sole Managing Member. Defendant Charles Weiss, individually, and through Charles W. Weiss, P.C. acted as the building’s attorney from 2007-2012. Weiss helped to draft the 1996 Offering Plan. Plaintiffs Patricia Lee…and Marc Lester…purchased the one commercial unit (“Unit C-1”) in September 2011 from defendant Michael Scott…Lee currently serves as the President of the Board of Managers of the Condominium.
The dispute:
The dispute between the parties concerns the right to use and build on the Condominium’s roof. Plaintiffs allege that the Benn Defendants do not own the Condominium’s roof, and that the Declaration and By-Laws do not grant any rights to construct any material structure on the roof. Plaintiffs argue, instead, that the no unit owner can access the roof for any reason other than for repair and maintenance with Board permission…Plaintiffs also argue that the roof is commercial space, and therefore, only plaintiffs have access and use of the roof…Defendants Benn allege, inter alia, that the March 2010 Third Amendment and the December 2012 Third Amendment read together, grant Unit R-4 extended roof rights, including the right to build a Penthouse apartment, swimming pool, and lawn…In addition, defendants Benn contend that the Declaration always provided that the roof deck is a limited common area for the exclusive use of Unit R-4’s owner[.]
The declaration and by-laws:
Under the Declaration and By-Laws, the roof contains General Common Elements, including a caretaker’s room and bathroom, the former freight elevator tower, and stairwell bulkhead, and a Limited Common Element roof deck…The Offering Plan lists the stairwells, lobby, and a portion of the roof deck (stairway bulkhead and 46 square feet of roof space) as “shared residential common elements.” Schedule C, under the Declaration, lists Unit R-4’s limited common elements as “Balcony, 96 sq. ft.” and Roof Deck “3,084 Sq. Ft.”…However, Schedule C, attached to the 2010 Declaration, lists Unit R-4’s limited common elements as “Balcony, 96 sq. ft.” and Roof Deck “1,852 Sq. Ft”…The footnotes to Schedule A, in the Offering Plan provide that the ‘RD’ notation (for “Roof Deck”) allocates exclusive use of the roof deck to unit R-4…The Offering Plan, Schedule D, also includes architectural drawings for the building where its “Legend” indicates the roof is a residential element and shares the same tax lot identification number (1005) as unit R-4…However, the House Rules delineated in Article IX Subsection 5(j) provides “roof-top areas of the Building shall not be used by any Residential Unit Owners, occupants, guests, servants, employees, agents or invitees, at any time for any purpose, [except] with the consent of the Board of Managers for repair or maintenance purposes only.”
Subsequent developments:
On June 15, 2004, the New York City Department of Buildings…issued a building permit…to Benn (as owner of Unit R-4) for alterations to the roof. Plaintiffs Lee and Lester assert that Benn commissioned two sets of plans. Plaintiff argues that Benn fraudulently submitted fake 2004 plans to the Department of Buildings…to obtain a Permit that only encompassed a renovation of the caretaker’s bedroom, bathroom, and former freight elevator tower…However, Benn then used that Permit to build a residential unit without permits, approvals, or amendments, and in violation of the NYC Zoning Resolutions…Today, as a result of planning and alterations that Benn commenced in 2004, the rooftop structure currently includes multiple bedrooms, bathrooms, living spaces and a pool…It appears Benn has controlled the use of the Penthouse apartment after the completion of the buildout.
The Third Amendment to the Declaration of Condominium of Le Toulouse Condominium dated March 15, 2010…attempted to resolve the Offering Plan’s different characterizations of unit R-4’s roof rights and incorporate the roof’s square footage into Unit R-4. However, the Condominium never filed the March 2010 Third Amendment with the New York City Department of Finance Office of the Register[.]
In December 2012, the Condominium filed a version of The Third Amendment, dated December 7, 2012, with the Register…Unlike the March 2010 Third Amendment, that the five current owners signed, only Stefan Benn signed the December 2012 Amendment. As of December 7, 2012, only three of the five original signers (60%) of the March 2010 Third Amendment still owned units in the Condominium. Article XII of the Offering Plan entitled “Amendments” provides, “[an] amendment shall be approved by eighty percent (80%) of the Unit Owners in number and common interest.” Article XII further provides “said amendment shall be set forth in a duly recorded amendment to the Declaration. . . . no amendment affecting any Commercial Unit, or the rights of the Commercial Unit Owner, may be made without the consent of the affected Commercial Unit Owner.
Plaintiff’s allegations:
Plaintiffs allege that the Offering Plan and Declaration do not establish that Unit R-4 has exclusive possessory rights to the roof, and that defendants Benn were not entitled to construct a rooftop structure on a Condominium common element. Plaintiffs note the documentation (regarding their purchase of Unit C-1) proffered by the defendants, including the Offering Plan, and the state-filed condominium amendments, do not disclose the Penthouse’s existence, and that they could not have known of defendants’ claims to the Condominium’s rooftop as the March 2010 Third Amendment never was filed with the Register. Plaintiffs also contend that defendant Benn misled the Unit Owners into signing the 2010 Amendment by withholding information from them.
Specifically, plaintiffs allege that the 2010 Draft Amendment included many false statements of fact that hid the true nature of the alterations to the roof and resulting violations from the Condominium, and induced the owners of Units C-1, R-1, and R-2 to execute the document…Plaintiffs likewise maintain that Benn falsely represented to the Condominium the roof alterations were performed with proper approvals under New York State law, but that the addition exceeded the scope of the June 2004 Permit when defendants Benn built a luxury Penthouse apartment instead of the permitted caretaker’s room. Plaintiffs allege Benn has unjustly reaped over $500,000 in rental income from the illegal Penthouse apartment.
Defendant’s allegations:
Defendants Benn however argue that the unit owners’ signatures on the March 2010 Third Amendment unanimously granted the limited common element of the roof deck to be incorporated into unit R-4, and that notwithstanding defendants’ failure to file the March 2010 Third Amendment, the identical language appears in both the 2010 and 2012 versions of the Third Amendment. Defendants further allege that the Third Amendments clarified the extended roof top rights owned by unit R-1 (encompassing over 3000 square feet of common elements owned by all unit owners) and defendants therefore were free to build a Penthouse apartment there. Defendants further allege that they obtained the appropriate permits from the Department of Buildings and that their renovations were performed within the scope of the DOB permit.
Denying summary judgment and concluding that:
Based on the foregoing, there are disputed material issues of fact that the court cannot determine without a trial. The parties dispute the scope of defendants’ claim of rooftop rights as delineated by the Offering Plan, the By-Laws, the House Rules and the validity of the March 2010 Third Amendment and the December 2012 Third Amendment defendant Benn filed. Issues of fact exist as to whether Benn fraudulently induced the unit owners into surrendering rooftop rights to defendants based on defendants’ alleged misrepresentations, and if any consideration was given to the unit owners for the surrender. Notwithstanding the foregoing, issues of fact exist as to whether defendants were permitted to build a Penthouse apartment (assuming the validity of the Third Amendments), and if so, whether defendant Benn built the Penthouse within the parameters of the DOB permit[.]
Rushmore v. Park Regis Apt. Corp., 2018 NY Slip Op 31335(U), Sup. Ct. N.Y. Co. (June 20, 2018)
Supreme Court was presented with various motions for summary judgment, stating at the outset that “at the core of this action to recover damages for, inter alia, breach of a proprietary lease and the by-laws of a residential cooperative housing corporation, is the parties’ dispute over the plaintiffs’ right to use and convey certain roof terrace space adjacent to their penthouse apartment.”
Supreme Court summarized the submissions:
In support of their motion, the plaintiffs submit, inter alia, the affidavits of the plaintiff Stephen Rushmore…the plaintiffs’ former real estate attorney Jesse Gordon, and an attorney’s affidavit, the pleadings, a copy of the proprietary lease, an acknowledgment agreement they were requested to and did execute in 2006, a 2014 contract of sale referable to the subject penthouse apartment, a proposed acknowledgment agreement that their prospective purchasers were requested to sign in 2014, and copies of letter and electronic mail correspondence.
In opposition to the motion, and in support of their cross motion, the defendants rely on some of the same documentation, along with affidavits from [board members] Bourque and Rachmani, the coop’s offering plan and by-laws, closing documents referable to the 2014 sale of the subject penthouse apartment, deposition transcripts of the parties, sales listing agreements, an apartment appraisal report, the final signed acknowledgment agreement between the purchasers of the plaintiff’s apartment and PRAC, photographs, and correspondence.
The plaintiffs’ submissions show that, in 2006, they purchased shares in PRAC referable to a penthouse unit on the roof of PRAC’s cooperative apartment building, and were issued a proprietary lease in connection therewith. There are two roof terraces in the building that are at issue — one terrace space above, or on the roof of, the penthouse unit, as well as a terrace on the same level, just outside the unit. The plaintiff’s claim of entitlement to the latter space arises from section 7(a) of the proprietary lease, which provides, in relevant part, that “[i]f the apartment includes a portion of the roof adjoining a penthouse, the Lessee shall have and enjoy the exclusive use of the terrace or balcony or that portion of the roof appurtenant to the penthouse.” As the plaintiffs explain in their supporting affidavits and deposition, and as set forth in the 2006 acknowledgment agreement, when they closed on their purchase of the unit, they executed a statement in which they “acknowledge[d] that we were advised by the Board of Directors of Park Regis Apartment Corporation that the Co-op intends to re-open the garden on the roof over the penthouses for use by residents of the building” (underscoring in original). The plaintiffs’ acknowledgment did not concern the terrace space level with the unit.
Subsequent developments:
It is undisputed that, when the plaintiffs later placed their unit on the market in 2014, members of PRAC’s board of directors suggested that they advise prospective purchasers that the board still had the intention of using the roof over the penthouse unit for a garden, accessible by all residents of the coop. According to the plaintiffs, on October 8, 2014, prospective purchasers executed a contract to purchase the plaintiffs’ penthouse unit for the sum of $8.75 million. The plaintiffs assert that, shortly thereafter, board members Bourque and Rachmani drafted a proposed acknowledgment agreement for signature by the prospective purchasers, pursuant to which the purchasers were to acknowledge that the “Roof and Roof Terrace are the property of [PRAC] and that pursuant to the [Proprietary Lease] or otherwise, neither is owned nor was ever intended for the exclusive use and occupancy by the [Unit] or by its owner.” The prospective purchasers declined to execute the agreement, and the sale was never consummated. The plaintiffs claim that they complained to Bourque that the required agreement reduced the market value of their unit.
Thereafter, as described by Stephen, the plaintiffs lowered their asking price and, after making attempts to negotiate new language for the acknowledgment agreement, ultimately sold their unit for the sum of $8.25 million. PRAC’s attorneys thereafter billed the plaintiffs the sum of $23,773.00 for their involvement in the final closing, and PRAC assessed the plaintiffs therefor.
Plaintiffs’ assertions:
[P]RAC breached the proprietary lease and the coop’s by-laws by compelling prospective purchasers to execute the subject acknowledgment agreement, thus causing the plaintiffs to incur damages by depressing the resale value of the subject penthouse. They argue that imposition of a new acknowledgment agreement improperly stripped away the inherent rights reserved by penthouse owners to object to PRAC’s use of a penthouse roof as a garden terrace. In addition, the plaintiffs claim that the fees charged by PRAC’s attorney were improperly assessed against them or, at the very least, excessive and unreasonable, thus constituting a further breach of the by-laws. The plaintiffs also assert that Bourque and Rachmani breached the fiduciary duty owed by board members to shareholders by drafting the proposed acknowledgment agreement to their detriment.
Defendants’ assertions:
[T]he new acknowledgment agreement simply clarified the status quo, the plaintiffs never had a right to prevent the coop’s use of the penthouse roof as a garden, subject to approval by the New York City Department of Buildings, there were no breaches of contract or fiduciary duty, and the attorneys’ fees assessed against the plaintiffs were reasonable and authorized by the by-laws.
And, after setting forth the legal template for summary judgment motions and contract disputes as to the breach of the contract claim that:
The motion is denied and the cross motion is granted to the extent of dismissing the first and third causes of action, which respectively seek to recover for breach of fiduciary duty against PRAC and the individual board members, and so much of the second cause of action as alleges that PRAC breached its own by-laws and the subject proprietary lease by requiring a prospective purchaser of the plaintiffs’ penthouse unit to acknowledge PRAC’s right to use the roof of that unit as a garden for the benefit of all tenant shareholders of the cooperative corporation. Thus, upon disposition of the motion, the only issue remaining to be tried is that portion of the second cause of action which alleges that PRAC breached its by-laws by assessing the plaintiffs an unreasonable amount in closing costs, including attorneys’ fees, upon the ultimate sale of the unit.
As to breach of contract that:
[T]he court concludes that the defendants established that the word “roof,” as employed in the proprietary lease, refers only to the roof of the building, and gives exclusive use, to the owners of a penthouse unit, of that portion of the roof of the building adjoining and appurtenant to the penthouse unit, i.e., the portion of the roof of the building which is on the same level as the floor of the penthouse unit. An “appurtenance” is a right of way that is necessary to give usable enjoyment to the conveyed premises…Here, the exclusive use of the penthouse roof by the owner of the penthouse unit is not necessary to give that owner usable enjoyment of the unit, just as the use of the roof of the building is not necessary to give the owner of the apartment units immediately thereunder usable enjoyment of those apartments. Contrary to the plaintiffs’ contention, the phrases “portion of the roof adjoining a penthouse” and “portion of the roof appurtenant to the penthouse” in the proprietary lease were not intended by the parties to refer to different areas of the roof but only the roof area on same level and just outside the penthouse…[T[he First Department reached the same conclusion in interpreting nearly identical lease provisions as that in the parties’ lease. Thus, the plaintiff’s rights extended only to the roof area on the same level and just outside the penthouse, not to any roof area on top of the penthouse.
Indeed, there is no dispute here that the former and current owners of the penthouse unit had and have exclusive use of that portion of the roof of the building that is adjacent to the floor of the subject penthouse unit, the terrace on the same level as and just outside the unit. The proprietary lease was clearly not intended to refer to the roof over the penthouse unit itself since it neither “adjoins” the unit nor is an “appurtenance” thereto. In opposition to the defendants’ showing in this regard, the plaintiffs do not show that the proprietary lease was ambiguous, and fail to raise a triable issue of fact as to whether the parties intended for the plaintiffs to reserve any rights in connection with the roof of the penthouse unit itself.
Conversely, the defendants’ submissions establish that the acknowledgment agreements executed by the plaintiffs in 2006, and drafted by Bourque and Rachmani in 2014, clearly refer to the roof of the penthouse unit itself. Contrary to the plaintiffs’ contention, their alleged retention of some unwritten, inchoate “right to object” to PRAC’s conversion of the roof of the penthouse unit into a garden terrace neither defeats PRAC’s right to such use of that roof under the by-laws, as protected by the business judgment rule…nor precludes PRAC or its board members from asking prospective purchasers to acknowledge PRAC’s right in this regard.
Thus, the plaintiffs failed to establish their prima facie entitlement to judgment as a matter of law on so much of the breach of contract cause of action as is premised on the defendants’ conduct in compelling the purchaser to execute an acknowledgment agreement. For the same reasons, the defendants have thus shown that their claim of right over the use of the roof of the penthouse unit itself, as opposed to the roof of the building adjacent to the penthouse unit, does not constitute a breach of the proprietary lease. Thus, in connection with their cross motion, the defendants have established their prima facie entitlement to judgment as a matter of law dismissing the breach of contract cause of action, except as to the claim that attorneys’ fees assessed against the plaintiffs in connection with the closing were unreasonable. In that regard, the defendants have not shown that the entirety of the $23,773 in attorneys’ fees that was billed was necessary to the consummation of the closing. The plaintiffs’ opposition, however, is insufficient to defeat PRAC’s entitlement to judgment dismissing the claim that it breached the lease and by-laws by requiring the purchasers to execute the acknowledgment agreement since, even if the plaintiff’s version of the facts are accepted as true, PRAC’s conduct does not rise to a breach of contract[.]
And as to the breach of fiduciary duty claim that:
The plaintiffs correctly point out that Business Corporation Law § 501(c) prohibits the unequal treatment of similarly situated shareholders…It is also well settled that members of a board of directors of a corporation “owe a fiduciary responsibility to the shareholders in general and to individual shareholders in particular to treat all shareholders fairly and evenly.”[.]
Like any other corporate board, the board of a residential cooperative has a fiduciary duty to the shareholders, and where violations of individual officers’ and board members’ fiduciary duties are alleged, a breach of fiduciary duty claim may be maintained against such individuals…The party challenging the board’s actions has the burden of demonstrating the breach…by showing “(1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant’s misconduct.”[.]
[T]here is no principle of corporate law that director liability arises only where the director commits a tort independent of the tort committed by the corporation itself. On the contrary, it has long been held by this Court that `a corporate officer who participates in the commission of a tort may be held individually liable, . . . regardless of whether the corporate veil is pierced.'[.]
However, the plaintiffs have failed to allege any conduct on the part of Bourque or Rachmani which would constitute a breach of fiduciary duty so as to impose individual liability upon them. They failed to show that the treatment of their unit by these defendants was unfair, that these defendants committed misconduct, or that they imposed any unauthorized restrictions on the sale of their unit.
On the other hand, in connection with the cross motion, the affidavits of Bourque and Rachmani establish, prima facie, that the treatment of the plaintiffs was no different than the treatment of any other penthouse owner, and that such treatment was fair, authorized, and within the intendment of the proprietary lease and the by-laws. For the same reasons as their failure to establish their own right to judgment, the plaintiffs failed to raise a triable issue of fact in this regard.
Behrend v. Gramercy-Tutherford Townhouse Corp., 2018 NY Slip Op 32172(U), Sup. Ct. N.Y. Co. (September 5, 2018)
Supreme Court, addressing a motion to dismiss the petition, summarized the proceeding:
Petitioner brings this Article 78 proceeding against Respondent, seeking an order annulling and setting aside Respondent’s November 21, 2017, determination denying Petitioner possession and access to the roof directly above Petitioner’s apartment; compelling Respondent to restore Petitioner’s right of possession and access to the roof by delivering all keys, to Petitioner, necessary to access the roof; declaring that Petitioner has the right to improve the subject roof amenity by building decking, subject to all applicable laws and obligations under her proprietary lease and at law; and deeming Petitioner the prevailing party and directing a hearing in her favor for an award of attorney’s fees.
The contentions of the parties:
Petitioner has been the proprietary lessee of apartment 222/#4…at Respondent Gramercy-Rutherford Townhouses Corporation, the cooperative building located at 220-222 East 17th Street, New York, New York 10003, since July 11, 2007. The residential cooperative is comprised of two buildings, 220 East 17th Street…and 222 East 17th Street…New York, NY 10003…Petitioner alleges that she is the proprietary lessee of both her apartment and the roof directly above her apartment and that the description of “Demised Premises” and Paragraph 7 of the Lease, set forth her rights and obligations with respect to the roof appurtenant to her apartment[.]
Respondent contends that Petitioner lacks standing to pursue the instant action because Petitioner never served a demand on the board prior to the commencement of this action and thus has failed to fulfill the necessary preconditions to the commencement of an Article 78 proceeding. Respondent avers that Petitioner failed to make a demand on the board with respect to her roof rights and/or the right to build a structure on the roof, and thus Respondent argues that Petitioner failed to allow the board to render a determination with respect to the issue of the Petitioner’s roof rights. The only demand Petitioner made to Respondent, that falls within the applicable four-month statute of limitations, was to approve her request to sublet her apartment “beginning in either November 2017 or December 2017, subject to the Coop’s rules and regulations”[.]
Grounds for motion to dismiss:
In support of its motion to dismiss the Petition, Respondent has submitted the affidavit of Matthew Crowe, the Treasurer of the cooperative since 2008…Crowe contends that based upon his review of the historical documents of the cooperative, the terms of the proprietary lease agreement signed by Petitioner do not give her the right of ingress and egress to/from the roof of Building 2 through the common space of the cooperative and that, prior to the roof repair in 2017, any resident in the building could have accessed the roof through the door Petitioner is demanding the keys for, as Petitioner did not have exclusive access to the roof because she did not sign the Roof Access Agreement…Respondent contends that the only historical agreement between the shareholder of the Apartment (currently Petitioner) relating to shareholder rights and obligations with respect to the roof of Building 2, is set forth in “Agreement Between Gramercy Rutherford Townhouse Corporation and the Owners of #4, 222 East 17th St. NY NY 10003 Regarding Roof Rights/Ownership”, dated November 1997[.]
Respondent admits that it was not able to secure a fully executed Roof Access Agreement between the cooperative and the prior shareholder of Petitioner’s apartment, and that none exists as between Petitioner and Respondent, but argues that the terms of the Roof Access Agreement forms the basis of the cooperative board’s understanding that the shareholder of the apartment is financially responsible for the roof in Building 2 and that the board received no compensation for allocation of the roof rights of Building 2, other than the shareholder’s promise to bear such financial responsibility…Based on this understanding and the terms of the Roof Access Agreement and Petitioner’s Proprietary Lease, Respondent contends that its request that Petitioner bear financial responsibility for the roof was made in good faith.
Petitioner’s response:
Petitioner alleges that going back to 2009, there is a history of leaks from the roof into her apartment…On May 20, 2013, Petitioner sent an email to the members of the board indicating that she had noticed further evidence that the roof was leaking into her apartment and in that email, directs several questions to the board and seeks information relative to her apparent intention to purchase additional shares allocated to the roof in exchange for the board permitting her to do construction on the roof. Specifically, Petitioner states: “Regarding share allocation for roof building, would the co-op be open to me purchasing additional share units in exchange for the right to build? I understand this would be a process, but I believe the co-op has done a share sale to Craig Samuelson for his usage for the roof on the 220 side in the past few years, so procedure should be in place already.”[.]
Petitioner claims that in 2014, the board “improperly attempting to shift all repair costs for the roof, structural and otherwise, to the two shareholders occupying the two (2) top floor apartments, respectively” and attaches “HOUSE RULES FOR GRAMERCY RUTHERFORD TOWNHOUSES CORPORATION” as an exhibit to the Petition…In December 2016, Petitioner alleges that the cooperative’s board engaged an engineer who recommended a full replacement of the Building’s roof, and the board engaged a contractor to make the structural repairs for approximately $84,00[.]
On December 13, 2016, the board’s treasurer, Mr. Crowe, sent an email to Petitioner and the other shareholder whose apartment was directly below the roof, summarizing the costs of the roof repair and indicating the board’s preference “to proceed with the $84,000 bid, which would result in a $42,000 allocation to each of you.”…Contrary to Petitioner’s allegations, there is no “demand” for payment expressed in the email, but rather a stated preference on how the board would like to proceed with the roof repairs. Indeed, at the end of the email, Mr. Crowe invites any questions and offers to go over the bids for the roof repair in detail…On January 11, 2017, the other shareholder responded to Mr. Crowe indicating that he agreed with the board’s preference…On July 6, 2017, Petitioner’s counsel, notified the board of her objection to the $42,000 chargeback for the roof replacement project, and asserted her rights under the Lease and the law[.]
Thereafter, in September, 2017 Petitioner advised the board that she wanted to sublet her Apartment beginning in either November 2017 or December 2017, subject to the Coop’s rules and regulations…On November 21, 2017 Respondent, through its attorney, approved Petitioner’s request to sublet her apartment…In that same letter, Respondent indicating that the board would be restricting access to the roof and that the board reserves all rights pursuant to contract and at law and equity relating to the roof and access to same as well as to, in the board’s sole discretion, limiting alterations to the building[.]
The standard of review:
An Article 78 proceeding may only be brought in certain circumstances, as prescribed by the statute…Specifically, here, Petitioner seeks to compel mandamus and direct the cooperative to restore Petitioner’s right of possession and/or access to the roof by immediately delivering to her all keys necessary to access the roof space, and declare that Petitioner has the right to improve the subject roof amenity by building decking and/or installing other lawful materials on the portion of the roof directly above the Petitioner’s apartment[.]
Mandamus to compel is “an extraordinary remedy that lies only to compel the performance of acts which are mandatory, not discretionary, and only when there is a clear legal right to the relief sought”…Accordingly, a writ of mandamus is not an appropriate remedy to compel performance of an act or duty for “which an officer may exercise judgment or discretion.”…Thus, “the petitioner must have a clear legal right to the relief demanded and there must exist a corresponding nondiscretionary duty on the part of the administrative agency to grant that relief”[.]
Because each of Petitioner’s causes of action set forth CPLR Article 78 mandamus to compel claims, CPLR § 217(1)’s four-month statute of limitations applies. As such, before commencing this mandamus to compel proceeding, Petitioner was required to make a demand and await refusal[.]
Dismissing the petition and concluding that:
Here, Petitioner filed this Article 78 petition alleging that Respondent had failed to deliver keys to access the roof directly above Petitioner’s apartment and to seek a declaration that Petitioner has the right to improve the roof amenity. Petitioner, however, has put the proverbial cart before the horse in that she has never made a formal demand upon Respondent to improve the roof amenity, nor has she demonstrated that she has any legal right of ownership in the roof amenity that forms the basis of her Petition. In fact, the documents submitted in support of the Petition, demonstrate quite clearly that Petitioner does not have any legal right of ownership to the roof amenity because she has not signed the Roof Access Agreement…Moreover, her own email correspondence with Mr. Crowe, makes very clear the fact that Petitioner knew she did not have ownership rights to the roof amenity because she clearly asks Mr. Crowe; “Regarding share allocation for roof building, would the co-op be open to me purchasing additional share units in exchange for the right to build? I understand this would be a process, but I believe the co-op has done a share sale to Craig Samuelson for his usage for the roof on the 220 side in the past few years, so procedure should be in place already.”[.]
Accordingly, Petitioner’s own email demonstrates the fact that Petitioner does not have a clear legal right to the relief demanded, as she has not demonstrated that she has any ownership rights to the roof amenity she is seeking to compel Respondent to grant her access to. Neither Petitioner nor Respondent provided a signed copy of the Roof Access Agreement in support of this proceeding. Moreover, Petitioner has also failed to demonstrate that the act for which she seeks the court to compel Respondent to undertake, is a “mandatory” act, and not one subject to Respondent’s discretion and judgment.
Paragraph 7 of Petitioner’s proprietary lease provides in pertinent part: “If the apartment includes…a portion of the roof…The Lessee’s use thereof shall be subject to such regulations as may from time to time, be prescribed by the Directors.”…Accordingly, the plain language of the lease demonstrates that Respondent’s Directors retain the right to promulgate regulations, from time to time, relative to the use of the roof appurtenant to Petitioner’s apartment. As such, this Lease provision aptly demonstrates that Respondent retained discretion and judgment with respect to Petitioner’s use and enjoyment of the roof amenity that is the subject of this proceeding. As such, mandamus to compel does not lie[.]
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Here, it is clear from the Petition and the exhibits attached thereto that Petitioner has not met her burden to maintain this Article 78 proceeding. Petitioner has not established a clear legal right to access the roof directly above her apartment, nor has she established that the act she seeks to compel Respondent to perform is a ministerial duty, where the board cannot exercise judgment or discretion.
Lessons learned:
The fact that an apartment abuts the roof of a residential cooperative or condominium does not, standing alone, give the unit owner the right to use or build on, or the responsibility to maintain and repair, the roof. The governing documents (i.e. the declaration, by-laws, etc.) control.