CAUSED COOPERATIVE TO INCUR FEES
When authorized by the governing agreements, such as the proprietary lease, cooperatives can use a summary holdover proceeding to evict a tenant-shareholder who engages in “objectionable conduct.”By way of example, in 800 Grand Concourse Owners, Inc. v. T., shareholders C.T. and her husband, J.P., were said to have engaged in “vexatious litigation conduct,” which reportedly caused their cooperative “considerable expense and resulted in the loss of insurance coverage.”
After being given “many chances,” and despite assurances that it would end, the problems “continued unabated,” which triggered the cooperative’s decision to terminate their tenancy. And after a Bronx County Civil Court judge issued a final judgment of possession against them, the shareholder-tenants appealed to the Appellate Term, First Department.
Since they could not, or did not, show that the cooperative “acted outside the scope of its authority,” or that it acted “in a way that did not legitimately further its corporate purpose, or in bad faith,” the AT1 allowed the judgment to stand. It found the termination consistent with the governing agreements and protected by the “business judgment rule."
As the AT1 noted, “’[E]victing tenants who consciously and unabashedly ... inflict thousands of dollars in unnecessary legal fees is in furtherance of the cooperative's legitimate interests.’”
Now how vexatious was that?
# # #
DECISION