Katz v. Bd. of Managers of Stirling Cove Condo. Ass'n
| Decision Date | 05 January 2022 |
| Docket Number | 2019–00048,Index No. 612471/15 |
| Citation | 201 A.D.3d 634,161 N.Y.S.3d 226 |
| Parties | Loretta KATZ, appellant, v. BOARD OF MANAGERS OF STIRLING COVE CONDOMINIUM ASSOCIATION, respondent. |
| Court | New York Supreme Court — Appellate Division |
Foreht Associates, LLP, New York, NY (Stephen R. Foreht of counsel), for appellant.
Miranda Sambursky Slone Sklarin Verveniotis LLP, Mineola, NY (Maurizio Savoiardo and Taimur Alamgir of counsel), for respondent.
LEONARD B. AUSTIN, J.P., COLLEEN D. DUFFY, FRANCESCA E. CONNOLLY, SYLVIA O. HINDS–RADIX, JJ.
DECISION & ORDER
In an action, inter alia, to recover damages for conversion, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Joseph Farneti, J.), dated November 14, 2018. The order granted the defendant's motion for summary judgment dismissing the complaint.
ORDERED that the order is affirmed, with costs.
The plaintiff is the owner of a condominium unit in the Stirling Cove Condominium complex, which is governed and managed by the defendant, Board of Managers of Stirling Cove Condominium Association (hereinafter the defendant Board). As a condominium owner, the plaintiff was assigned the use of one of the condominium complex's boat slips, designated slip numbered 50, which was included in the conveyance in accordance with the offering plan which provided that she had "the exclusive use of one boat slip." In 2014, the dock was reconfigured, reducing the width of the plaintiff's slip.
In 2015, the plaintiff commenced this action against the defendant Board, inter alia, to recover damages for conversion. The defendant Board moved for summary judgment dismissing the complaint, arguing that it was shielded from liability because the decision to reconfigure the dock was authorized by the condominium complex's bylaws and was made by it pursuant to its discretion under the business judgment rule.
In support of the motion, the defendant Board submitted, inter alia, the affidavit of its general manager. He attested that in 2011, an owner of an adjoining property notified the defendant Board that the boat docked in slip numbered 51 was encroaching into its waters. The encroachment was discussed at the defendant Board's meeting of June 18, 2011, and the owner of the boat in that slip was advised to move the boat to a different slip.
The general manager further attested that in October 2012, Hurricane Sandy caused severe damages to the bulkhead connecting with boat slips numbered 42 through 51, and in or about December 2012, the defendant Board solicited bids to repair the bulkhead and determined that in conjunction with the repair of the bulkhead, it was appropriate to remedy the encroachment of boat slip numbered 51 into the adjoining property owner's waters. The general manager further stated that "[t]o resolve the encroachment, it was decided to move the dock ramp separating slips # 50 and # 51 approximately three (3) feet away" from the adjoining property owner's waters.
The general manager received bids to perform the work, which was performed at a cost of $1,466,44. Since the cost of the work did not exceed $5,000, the bylaws authorized the defendant Board to make that alteration without the approval of a majority of the condominium homeowners. As a result of that alteration, the width of slip numbered 51 was increased by approximately three feet, and the width of slips numbered 49 and 50 were reduced by a total of approximately three feet, or one and one-half feet per slip.
The plaintiff, in opposition to the motion, contended that the decision to reconfigure her boat slip was not reflected in the minutes of the meetings of the defendant Board. However, the minutes of the March 9, 2013 meeting discussed storm damage repairs and how to finance those repairs. The solicitation of bids and bulkhead repair were discussed at the June 29, 2013 meeting, and it was noted in the minutes of that meeting, that "as stated earlier" the general manager "received three proposals for the Bulkhead repair and was authorized to select and begin working with the best, and lowest cost, of the three." The minutes of the July 25, 2015 meeting state that the defendant Board discussed the reconfiguration of the plaintiff's boat slip numbered 50. At that meeting, the defendant Board noted that
The Supreme Court granted the motion, and the plaintiff appeals.
"In reviewing a condominium board's actions, courts should apply the business judgment rule" ( Board of Mgrs. of Fishkill Woods Condominium v. Gottlieb, 184 A.D.3d 785, 789, 126 N.Y.S.3d 749 ). ( id. at 789, 126 N.Y.S.3d 749 [internal quotation marks omitted]; see Board of Mgrs. of Vil. Mall at Hillcrest Condominium v. Banerjee, 188 A.D.3d 777, 779, 136 N.Y.S.3d 353 ).
The defendant Board established its prima facie entitlement to judgment as a matter of law by showing that it acted within the scope of its authority under Article III, Section 5(a)(12) of the condominium complex's bylaws and that its action was taken in good faith to further a legitimate interest of the condominium complex. The affidavit of the general manager and the minutes of the defendant Board's meetings established that the defendant Board authorized the general manager to make the relevant repairs, and was aware of the effect of those repairs on the plaintiff's boat slip. Although the defendant Board did not specify in its minutes every alteration to be performed in detail, the affidavit and minutes submitted by the defendant Board are sufficient to demonstrate its determination with respect to slip numbered 50 and its general manager's actions pursuant thereto. Further, there is no indication in this record that the alteration was not within the defendant Board's scope of authority. Moreover, it is clear that the affidavit of the general manager was submitted on behalf of the defendant Board and with personal knowledge of the facts.
In opposition, the plaintiff failed to raise a triable issue of fact.
Accordingly, the Supreme Court properly granted the defendant Board's motion for summary judgment dismissing the complaint.
DUFFY, J., dissents, and votes to reverse the order, on the law, and deny the defendant's motion for summary judgment dismissing the complaint, with the following memorandum:
I disagree with my colleagues’ determination that the defendant Board of Managers of Stirling Cove Condominium Association (hereinafter the Board) demonstrated as a matter of law that the business judgment rule applies to bar the plaintiff's claims. Under the business judgment rule, a necessary threshold inquiry is whether the board acted within the scope of its authority under the bylaws and whether the action was taken in good faith to further a legitimate interest of the condominium (see Schoninger v. Yardarm Beach Homeowners Ass'n., 134 A.D.2d 1, 9, 523 N.Y.S.2d 523 ; see also Matter of Levandusky v. One Fifth Ave. Apt. Corp., 75 N.Y.2d 530, 538, 554 N.Y.S.2d 807, 553 N.E.2d 1317 ). Here, as set forth below, the Board failed to show, prima facie, that it satisfied this first prong—that it acted pursuant to the bylaws. Accordingly, I would reverse and deny the Board's motion for summary judgment dismissing the complaint.
In 2015, the plaintiff, the owner of a residential unit in a condominium complex in Suffolk County (hereinafter the complex), commenced this action against the Board, the governing entity of the complex, to recover damages for conversion, breach of fiduciary duty, and related causes of action, and for injunctive relief arising out of a dispute about the boat slip assigned to the plaintiff in connection with her ownership of a residence in the complex.
The plaintiff alleged that, when she purchased her condominium unit in 1989, she was also deeded an interest in a boat slip—slip 50 (hereinafter the plaintiff's boat slip). The plaintiff also alleged that the deed expressly identified the boat slip as being included in the conveyance, and that the complex's offering plan provided that she had "the exclusive use of one boat slip as an irrevocably restricted common element." She further alleged that, in 2014, the dock adjacent to the plaintiff's boat slip was moved—altering the width of her boat slip and causing it to be reduced and limiting the size of the watercraft that she could moor there. The plaintiff also alleged, inter alia, that the decision to move the dock was not made in accordance with the bylaws governing the Board and was outside of the Board's authority.
The Board thereafter moved for summary judgment dismissing the complaint, on the ground, inter alia, that it was shielded from liability by the business judgment rule. In an order dated November 14, 2018, the Supreme Court granted the Board's motion and directed dismissal of the complaint. The plaintiff appeals.
"[T]he business judgment rule provides that a court should defer to a ... board's determination ‘[s]o long as the board acts for the purposes of the [condominium], within the scope of its authority and in good faith’ " ( 40 W. 67th St. v. Pullman, 100 N.Y.2d 147, 153, 760 N.Y.S.2d 745, 790 N.E.2d 1174, quoting Matter of Levandusky v. One Fifth Ave. Apt. Corp., 75 N.Y.2d at 538, 554 N.Y.S.2d 807, 553 N.E.2d 1317; see Kaung v. Board of Mgrs. of Biltmore...
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