| Helmer v Comito |
| 2009 NY Slip Op 02749 [61 AD3d 635] |
| April 7, 2009 |
| Appellate Division, Second Department |
| William F. Helmer et al., Appellants, v Marc A. Comito etal., Respondents, et al., Defendants. |
—[*1] Harriton & Furrer, LLP, Armonk, N.Y. (Keith S. Harriton of counsel), forrespondents.
In an action, inter alia, to recover damages for breach of fiduciary duty, the plaintiffs appeal,as limited by their brief, from so much of an order of the Supreme Court, Rockland County(Weiner, J.), dated June 26, 2007, as amended by an order of the same court dated October 18,2007, as granted those branches of the motion of the defendants Marc A. Comito, Robert M.Fixell, Ruth Rabiner, Frank Raso, Lynne Schloesser, Arthur J. Wohlers, Clermont CondominiumII, and Board of Managers of the Clermont Condominium II which were for summary judgmentdismissing the first and third causes of action of the second amended complaint, and denied theircross motion for summary judgment dismissing the first, second, and third affirmative defensesinterposed by those defendants.
Ordered that the order, as amended, is affirmed insofar as appealed from, with costs.
The defendant Board of Managers of the Clermont Condominium II (hereinafter the Board)contracted for certain construction work on its condominium buildings. The plaintiffs, theowners of certain units, challenged the Board's authority to enter into the contract, which theycontended called for "alterations" or "improvements" requiring a vote of unit owners pursuant tothe declaration establishing the condominium (hereinafter the condominium declaration). TheSupreme Court, inter alia, granted those branches of the respondents' motion which was forsummary judgment dismissing the first and third causes of action of the second amendedcomplaint alleging breaches of fiduciary duty, and denied the plaintiffs' cross motion forsummary judgment dismissing the first, second, and third affirmative defenses interposed by therespondents. We affirm insofar as appealed from.[*2]
Where a unit owner challenges an action by acondominium Board of Managers, courts apply the business judgment rule (see Matter ofLevandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530, 539 [1990]; Acevedo v Town 'N CountryCondominium, Section I, Bd. of Mgrs., 51 AD3d 603 [2008]; Schoninger vYardarm Beach Homeowners' Assn., 134 AD2d 1, 10 [1987]). "Under the businessjudgment rule, the court's inquiry is limited to whether the board acted within the scope of itsauthority under the bylaws (a necessary threshold inquiry) and whether the action was taken ingood faith to further a legitimate interest of the condominium. Absent a showing of fraud,self-dealing or unconscionability, the court's inquiry is so limited and it will not inquire as to thewisdom or soundness of the business decision" (Schoninger v Yardarm Beach Homeowners'Assn., Section I, Bd. of Mgrs., 134 AD2d at 9).
The evidence submitted on the motion and cross motion established that the Board'sdetermination that the proposed construction work constituted "repairs" and "maintenance"under the condominium declaration and by-laws was within its authority and made in good faithto further a legitimate interest of the condominium (id.). The condominium buildings hadsuffered leaks over the course of many years, and testing revealed that one third of the units hadtoxic mold. The Board hired architectural and engineering firms to conduct inspections. Thefirms advised that the roofs had incurred moisture damage and was nearing or had exceeded itslife expectancy, and recommended work to correct this and other deficiencies in the buildings.Further, in classifying the work as repairs and maintenance, the Board relied upon adetermination by the Chief Building and Zoning Inspector of the Village of Nyack Building andZoning Department that "the proposed scope of work is of a repair/maintenance nature and doesnot require a building permit." In addition, the condominium bylaws specifically provide that theBoard may authorize a variance from original materials when conducting repairs.
Accordingly, the Board was within its authority in entering the construction contract withoutthe unit owner approval required for "alterations" or "improvements" costing more than 25% ofthe estimated annual budget (see Gennisv Pomona Park Bd. of Mgrs., 36 AD3d 661 [2007]). Therefore, the Supreme Courtproperly denied the plaintiffs' cross motion and properly awarded summary judgment to therespondents dismissing the first and third causes of action of the second amended complaint.
The Board's contentions regarding the second cause of action in the second amendedcomplaint are not properly before this Court (see CPLR 5515; Hecht v City of NewYork, 60 NY2d 57 [1983]; Adelman v Attonito, 304 AD2d 507 [2003]). Mastro,J.P., Covello, Eng and Leventhal, JJ., concur.