Park South Tenants Corp. v. 200 Cent. Park South Associates, L.P.
| Decision Date | 02 August 1991 |
| Docket Number | D,No. 1718,1718 |
| Citation | 941 F.2d 112 |
| Parties | PARK SOUTH TENANTS CORPORATION, Plaintiff-Appellant, v. 200 CENTRAL PARK SOUTH ASSOCIATES, L.P., Bernard Spitzer, Jack Lipman, and Melvin D. Lipman, Defendants-Appellees. ocket 91-7388. |
| Court | U.S. Court of Appeals — Second Circuit |
Robert Hermann, New York City (Teitelbaum, Hiller, Rodman, Paden & Hibsher, New York City, of counsel), for plaintiff-appellant.
Jonathan Honig, New York City (Robert D. Levin, Annette Ferstenberg, Lowenthal, Landau, Fischer, Ziegler & Bring, New York City, of counsel), for defendants-appellees.
Before MESKILL, NEWMAN and PRATT, Circuit Judges.
This is an appeal from an amended judgment entered in the United States District Court for the Southern District of New York, Conner, J., on April 19, 1991, granting summary judgment in favor of the appellees. This case was brought under the Condominium and Cooperative Conversion Protection and Abuse Relief Act of 1980, 15 U.S.C. § 3601 et seq. (the Act). The complaint filed in the district court also sought declaratory relief and raised a pendent state law claim. The judgment of the district court is affirmed.
The instant controversy stems from a conflict between a cooperative housing corporation, Park South Tenants Corporation (Park South) and the sponsor of that development, 200 Central Park South Associates (Sponsor). On January 16, 1984, the apartment building located at 200 Central Park South was converted to cooperative ownership. At the time of the closing, the Sponsor retained certain rights in the building. Specifically, the Sponsor retained a leasehold interest in the building's commercial space, which consisted of a parking garage, two retail stores and nineteen professional offices. Through the execution of a series of five-year leases, the Sponsor could retain this leasehold interest for a period of up to fifty years. The lease called for unapportioned rental payments in the amount of $400,000 per year for the first five years. The Sponsor was required to make these rental payments to the housing corporation, Park South.
Under the cooperative's bylaws and in accordance with New York law, the Sponsor also retained other control rights over the cooperative. Specifically, the Sponsor was permitted to retain control over the cooperative's board until the earlier of (1) the date on which fifty percent of the cooperative shares had been sold to persons unaffiliated with the Sponsor, or (2) five years after the closing. Pursuant to these provisions, the Sponsor controlled the cooperative's board until May 8, 1989, at which time a majority of unaffiliated directors was elected.
On December 5, 1989, the requisite number of the Park South unit owners voted to terminate the garage lease and the Sponsor was so notified. In doing so, Park South exercised the right to terminate expressly conferred on cooperative associations by the Act. See 15 U.S.C. § 3607. The Sponsor did not contest the termination, but unilaterally reduced the amount of its yearly unapportioned lease payment to account for the loss of the use of the garage space.
On December 13, 1989, Park South initiated the instant action seeking damages under the Act, 15 U.S.C. §§ 3607, 3611(b). Park South maintained that it was entitled to recover damages to compensate it for the earnings that were captured by the Sponsor under the garage lease from the date of its initial execution to the date of its termination. Park South also sought a declaration that its decision to terminate the lease was proper under federal law and asserted a pendent state law claim for breach of fiduciary duty.
The case came before the district court on the Sponsor's motion for summary judgment and Park South's cross-motion for partial summary judgment. By Opinion and Order dated October 12, 1990, Judge Conner granted the Sponsor's motion with regard to the claim for damages under the Act and...
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