Yusin v Saddle Lakes Home Owners Assn., Inc.

2010 NY Slip Op 04582 [73 AD3d 1168]

May 25, 2010

Appellate Division, Second Department

As corrected through Wednesday, June 30, 2010

Jane Yusin et al., Respondents, v Saddle Lakes HomeOwners Association, Inc., et al., Appellants.

—[*1]Tromello, McDonnell & Kehoe, Melville, N.Y. (A.G. Chancellor III of counsel), forappellants. Smith, Finkelstein, Lundberg, Isler & Yakaboski, Riverhead, N.Y. (Gair G. Betts andFrank Isler of counsel), for respondents Jane Yusin and Wendy Yusin.

Ciarelli & Dempsey, Riverhead, N.Y. (John L. Ciarelli of counsel), for respondents FrancesGillespie, Jane Lysik, Eline Martin, Arthur Monaco, Paul Peter, Pat Peter, Philip Kraft, TheresaKraft, Bernard McCabe, Georgianna Seebeck, Jeanne Wetzel, and Virgina A. Oliver.

In a consolidated action, inter alia, for a permanent injunction and for a judgment declaringthe invalidity of a rule enacted by the Board of Managers of the Saddle Lakes HomeownersAssociation on July 9, 2008, requiring that all pets be leashed and walked in the streets ratherthan the walkways and grassy areas of a condominium development, the defendants appeal, aslimited by their brief, from (1) so much of an order of the Supreme Court, Suffolk County(Spinner, J.), dated July 6, 2009, as upon consolidation, and upon, in effect, the denial of themotion of the plaintiffs Jane Yusin and Wendy Yusin for summary judgment, denied their crossmotion to dismiss the complaint asserted by those plaintiffs pursuant to CPLR 3211 (a) (1) and(7), or alternatively, for summary judgment and (2) so much of an order of the same court, alsodated July 6, 2009, as denied their separate cross motion to dismiss the complaint asserted by theplaintiffs Frances Gillespie, Jane Lysik, Eline Martin, Arthur Monaco, Paul Peter, Pat Peter,Philip Kraft, Theresa Kraft, Bernard McCabe, Georgianna Seebeck, Jeanne Wetzel, and VirginaA. Oliver pursuant to CPLR 3211 (a) (1) and (7), or alternatively, for summary judgment.

Ordered that the first order is modified, on the law, by adding thereto a provision searchingthe record and granting those branches of the motion of the plaintiffs Jane Yusin and WendyYusin which were for summary judgment on the cause of action to declare the rule invalid, onthe cause of action to permanently enjoin the defendants from enforcing the rule, and on theissue of liability with respect to the cause of action to recover damages relating to the finesimposed by the Board of Managers of the Saddle Lakes Home Owners Association for thoseplaintiffs' violations of the rule; as so modified, the first [*2]orderis affirmed insofar as appealed from; and it is further,

Ordered that the second order is modified, on the law, by adding thereto a provisionsearching the record and awarding summary judgment to the plaintiffs Frances Gillespie, JaneLysik, Eline Martin, Arthur Monaco, Paul Peter, Pat Peter, Philip Kraft, Theresa Kraft, BernardMcCabe, Georgianna Seebeck, Jeanne Wetzel, and Virgina A. Oliver on the cause of action todeclare the rule invalid, on the cause of action to permanently enjoin the defendants fromenforcing the rule, and on the issue of liability with respect to the cause of action to recoverdamages relating to the fines imposed by the Board of Managers of the Saddle Lakes HomeOwners Association for those plaintiffs' violations of the rule; as so modified, the second order isaffirmed insofar as appealed from; and it is further,

Ordered that one bill of costs is awarded to the plaintiffs appearing separately and filingseparate briefs.

The plaintiffs are residents and homeowners within the Saddle Lakes Condominiumcommunity (hereinafter the condominium), a residential community for people over the age of55 located in Riverhead. The condominium's bylaws indicate that the homeowners werepermitted to walk with their pets over the condominium's common areas. In July 2008, thedefendant Board of Managers of the Saddle Lakes Home Owners Association (hereinafter theBoard) passed a rule requiring homeowners to curb their pets and prohibiting the homeownersfrom walking their pets on the condominium's common areas. Violators of the rule were subjectto a $50 fine.

The plaintiffs commenced this now-consolidated action, inter alia, against Saddle LakesHome Owners Association, Inc., seeking, among other things, to permanently enjoin thedefendants from enforcing the rule, a judgment declaring that the rule is invalid, and to recoverdamages relating to the fines imposed by the Board for the plaintiffs' violations of the rule. Theplaintiffs alleged, inter alia, that because the condominium's bylaws required approval from662/3% of the home owners in order to amend the bylaws, the rule adopted by theBoard was invalid. The defendants cross-moved to dismiss the complaints pursuant to CPLR3211 (a) (1) and (7), or alternatively, for summary judgment.

A motion pursuant to CPLR 3211 (a) (1) to dismiss based on documentary evidence mayappropriately be granted "only where the documentary evidence utterly refutes plaintiff's factualallegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual LifeIns. Co. of N.Y., 98 NY2d 314, 326 [2002]). "On a motion to dismiss pursuant to CPLR3211 (a) (7), the pleading is to be afforded a liberal construction" (Kempf v Magida, 37AD3d 763, 764 [2007]). The court must accept the facts as alleged in the complaint as true,accord the plaintiffs the benefit of every possible favorable inference, and determine whether thefacts as alleged fit within any cognizable legal theory (see Arnav Indus., Inc. RetirementTrust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303 [2001]; Leon vMartinez, 84 NY2d 83, 87-88 [1994]). On a motion for summary judgment, a defendantmust make a prima facie showing of its entitlement to judgment as a matter of law (seegenerally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).

"Where a unit owner challenges an action by a condominium Board of Managers, courtsapply the business judgment rule" (Helmer v Comito, 61 AD3d 635, 636 [2009]; seeMatter of Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530 [1990]; Kaung vBoard of Mgrs. of Biltmore Towers Condominium Assn., 70 AD3d 1004 [2010];Acevedo v Town 'N Country Condominium, Section I, Bd. of Mgrs., 51 AD3d 603[2008]; Schoninger v Yardarm Beach Homeowners' Assn., 134 AD2d 1, 10 [1987]). Thebusiness judgment rule limits judicial review of decisions made by a condominium's board ofmanagers to whether the board's "action was authorized and whether it was taken in good faithand in furtherance of the legitimate interests of the condominium" (Schoninger v YardarmBeach Homeowners Assn., 134 AD2d at 10).

Here, the condominium's bylaws require the approval of 662/3% of the homeowners in order to amend the bylaws, and approval from at least 51% of the votes of homes thatare subject to first mortgages in order to effect a "material" change to those bylaws. However,the evidence submitted by the defendants in support of their cross motions indicates that theiradoption of the subject rule was [*3]unauthorized by thecondominium's bylaws and thus was not protected by the business judgment rule. Thus, theSupreme Court properly denied those branches of the defendants' cross motions which were todismiss the complaint pursuant to CPLR 3211 (a) (1) based on documentary evidence, since thedocuments submitted by the defendants failed to utterly refute the plaintiffs' factual allegations,conclusively establishing a defense as a matter of law (see Rubinstein v Salomon, 46AD3d 536, 539 [2007]). In addition, the Supreme Court properly denied those branches of thedefendants' cross motions which were to dismiss the complaint pursuant to CPLR 3211 (a) (7),as the complaint states a valid cause of action, inter alia, for a permanent injunction anddeclaratory relief. Likewise, the Supreme Court properly denied those branches of thedefendants' cross motions which were for summary judgment dismissing the complaint, as thedefendants failed to make a prima facie showing of their entitlement to judgment as a matter oflaw (see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d at 853).

This Court has the authority to search the record and award summary judgment to anonappealing party with respect to an issue that was the subject of the motion before theSupreme Court (see Dunham v Hilco Constr. Co., 89 NY2d 425, 429-430 [1996]). Here,the issue of whether the defendants were authorized to adopt the subject rule was addressed inthe motion of the plaintiffs Jane Yusin and Wendy Yusin and in the cross motions of thedefendants before the Supreme Court. Thus, upon searching the record, we award summaryjudgment to the plaintiffs on the causes of action to declare the rule invalid, on the causes ofaction to permanently enjoin the defendants from enforcing the rule, and on the issue of liabilitywith respect to the causes of action to recover damages relating to the fines imposed by theBoard for the plaintiffs' violations of the rule. Skelos, J.P., Angiolillo, Leventhal and Roman, JJ.,concur.