Co-op Corp. Didn't Harass Shareholder It Sued for Defamation

Landlord cooperative corporation sued a shareholder tenant for defamation. The co-op claimed that after losing an election for board president to another proprietary lessee, the tenant created a public Facebook group page, where she wrote defamatory statements about the co-op board and its members. The co-op claimed that tenant also texted a series of false and defamatory statements to another building resident and approached several other shareholders personally to spread lies about the person elected to the board.

In response to the co-op's court complaint, tenant claimed harassment, discrimination and retaliation, and breach of fiduciary duty, among other things. The co-op asked the court to dismiss tenant's claims without trial.

The court found that tenant's claim didn't meet the statutory definition of harassment under NY Admin. Code Sections 27-2004(a)(48), (g) and dismissed that counterclaim. The co-op's court action wasn't frivolous or baseless. The court also dismissed tenant's discrimination counterclaim, which was based on the co-op's refusal to permit tenant's installation of a jetted bathtub without prior board consent. This wasn't the type of differential treatment that Business Corporation Law (BCL) Section 501(c) was designed to address.

Tenant could maintain her claim for retaliation under Real Property Law Section 223-b based on her claim that landlord took action against her for her good faith efforts to secure or enforce rights under her proprietary lease. However, tenant couldn't maintain the retaliation claim against any individual shareholder.

The court also dismissed tenant's counterclaim for attorney's fees since the co-op's claim against her was for defamation, not for any lease violation. And the court dismissed tenant's claim for abuse of process, finding no unlawful interference with tenant's person or property. The court didn't deny tenant's counterclaim for breach of fiduciary duty since she set forth enough facts to meet the demand futility requirement of BCL Section 626(c) that requires a hearing on the facts. 

Harway Terrace, Inc. v. Shlivko: Index No. 504029/2018, 2020 NY Slip Op 31215(U)(Sup. Ct. Kings; 4/30/20; Toussaint, J)