Court Upholds Co-op Shareholders' Decision to Terminate Lease

Landlord cooperative corporation sued to evict tenant proprietary lessee based on objectionable conduct. Landlord asked the court to decide the case without a trial. The court ruled for landlord. Tenant appealed and lost. The proprietary lease between landlord and tenant states that the lease can be terminated when the co-op shareholders determine that a tenant is undesireable due to objectionable conduct. The co-op's bylaws allow the shareholders to propose measures at special meetings that can be held at any time if a majority votes to do so. In 2004, a majority of shareholders signed a petition to require a vote at a special meeting concerning termination of tenant's proprietary lease. A majority of shareholders then voted to terminate the tenancy after discussion at the meeting. Tenant himself spoke at the meeting. Landlord then sent tenant a termination notice, citing 94 occasions over an eight-year period where tenant violated the co-op rules; repeatedly harassed building security officers; defaced co-op property; violated noise, litter, animal, and automobile rules; threatened the safety of other shareholders; and brought groundless litigation costing the co-op over $100,000. Landlord showed that the co-op board was acting for the purposes of the co-op, within the scope of its authority and in good faith. Under the business judgment rule, landlord could terminate tenant's proprietary lease.

Breezy Point Cooperative, Inc. v. Young: NYLJ, 8/15/07, p. 37, col. 5 (App. T. 2 Dept.; Pesce, PJ, Weston Patterson, Belen, JJ)