Tenant Shareholder Claims Co-op Board Interfered with Sale of Apartment

Cooperative shareholder tenant sued the co-op corporation, claiming breach of fiduciary duty by the board and tortious interference with contract. Tenant sought to buy another apartment in the building while the board expressed interest in buying tenant’s current apartment. When tenant didn’t hear from the board, he entered into a contract for the sale of his unit at $495,000. The sale was not approved by the board, which found the price too low. Tenant then amended his contract of sale for a price of $535,000 as requested, but the board then requested another price increase to $610,000. The board asked the court to dismiss the case, claiming that its decision was protected by the business judgment rule and that tenant failed to show discrimination, self-dealing, or misconduct. The court ruled against the board. Tenant raised an issue of fact, and the board may have engaged in self-dealing since the board previously had offered tenant $400,000 for his apartment. Pre-trial questioning was needed to determine more facts.

Graham v. 420 East 72nd Tenants Corp.: Index No. 154712/2015, NYLJ No. 1202762286983 (Sup. Ct. NY; 6/1/16; Mendez, J)