Co-op Tenant Claims Breach of Fiduciary Duty Based on Bedbug Infestation

Cooperative shareholder tenant sued landlord co-op corporation and co-op board members, claiming that they breached their fiduciary duty after tenant had a bedbug infestation in his apartment. Tenant claimed that the infestation spread through the building and continued for 10 months after starting in another apartment across the hall, before landlord hired an exterminator to provide competent abatement services. Tenant claimed that the board deliberately conspired to conceal the unsafe condition posed by the infestation, and improperly prioritized some maintenance and repair obligations to one board member at the co-op's expense. The court denied the board's request to dismiss the claim for breach of fiduciary duty without a trial.

A board member appealed and lost. Tenant claimed that this board member received an improper $25,000 payment from the board to repair water damage to his apartment while not taking responsibility for tenant's expenses caused by the bedbug infestation. Tenant's claim that board member actively participated in the unequal treatment of tenant was sufficient to allow tenant to pursue his claim of breach of fiduciary duty against him individually.

Stinner v. Epstein: Index No. 2015-12580, 2018 NY Slip Op 04371 (App. Div. 2 Dept.; 6/13/18; Mastro, JP, Rivera, Hinds-Radix, Iannacci, JJ)