| Hixon v 12-14 E. 64th Owners Corp. |
| 2013 NY Slip Op 04687 [107 AD3d 546] |
| June 20, 2013 |
| Appellate Division, First Department |
| Verina Hixon, Appellant, v 12-14 East 64thOwners Corp. et al., Respondents, et al., Defendants. |
—[*1] Davidoff Hutcher & Citron LLP, New York (Gary I. Lerner of counsel), forrespondents.
Order, Supreme Court, New York County (Milton A. Tingling, J.), enteredDecember 21, 2011, which amended the court's prior order entered October 13, 2011 toreflect that the amended complaint was dismissed upon defendants-respondents' motionto dismiss, unanimously affirmed, with costs. Appeal from order, same court and Justice,entered August 27, 2012, which, upon reargument, adhered to the originaldeterminations, unanimously dismissed, without costs, as academic.
The complaint sets forth two causes of action: breach of a proprietary lease againstdefendant 12-14 East 64th Owners Corp. (the co-op) and breach of fiduciary duty againstthe individual defendants, the co-op's board members. The claims against the co-op thataccrued before December 7, 2006 were discharged by operation of a release executed onthat date. There is no merit to plaintiff's claim that the release did not apply to her instantcauses of action.
In all other respects, the complaint fails to state a cause of action against the co-op.Plaintiff alleges that the co-op breached the proprietary lease by bringing a nonpaymentand a holdover proceeding against her. After a joint trial, the Civil Court of the City ofNew York, Housing Part (Schneider, J.), directed the entry of a money judgment in favorof the co-op on the nonpayment petition and dismissed the holdover petition. TheAppellate Term modified to the extent of reducing the money judgment (12-14 E.64th Owners Corp. v Hixon, 38 Misc 3d 135[A], 2013 NY Slip Op 50130[U] [AppTerm, 1st Dept 2013]). To the extent discernible, the complaint alleges that after theDecember 2006 release, the co-op breached the proprietary lease's covenant of quietenjoyment by bringing the nonpayment and holdover proceedings in bad faith.[FN*]This claim is facially [*2]insufficient because it is notalleged that any of the co-op's post-release conduct substantially and materially deprivedplaintiff of the beneficial use and enjoyment of her apartment (see Barash vPennsylvania Term. Real Estate Corp., 26 NY2d 77, 82-83 [1970]). It does not availplaintiff to label this cause of action as a breach of the implied covenant of good faithand fair dealing. That "implied obligation is only 'in aid and furtherance of other terms ofthe agreement of the parties' " (Trump on the Ocean, LLC v State of New York, 79 AD3d1325, 1326 [3d Dept 2010] [citations omitted], lv dismissed and denied 17NY3d 770 [2011]). Moreover, plaintiff's cause of action against the co-op is barred bythe doctrine of collateral estoppel insofar as it is based on the commencement andmaintenance of the nonpayment proceeding.
The breach of fiduciary duty cause of action is based on allegations of actions takenby the board members in (1) preventing plaintiff from repairing water damage to herapartment, (2) refusing to make such repairs themselves, (3) denying her an opportunityto defend herself against allegations of objectionable conduct, (4) terminating hershareholder and leasehold interests and (5) wrongfully prosecuting the summaryproceedings. These claims are not actionable because they stem solely from the co-op'salleged breaches of the proprietary lease as opposed to torts committed by the co-op or itsboard members. A director is not personally liable for a corporation's breach of anagreement merely by virtue of his or her decisions or actions that resulted in thecorporation's promise being broken (Murtha v Yonkers Child Care Assn., 45NY2d 913, 915 [1978]). Moreover, the complaint does not allege that the co-op or theindividual defendants engaged in tortious conduct (see e.g. Fletcher v Dakota, Inc., 99 AD3d 43, 56 [1st Dept2012], citing American-European Art Assoc. v Trend Galleries, 227 AD2d 170,171-172 [1st Dept 1996]). We have considered plaintiff's remaining arguments and findthem unavailing. Concur—Andrias, J.P., Moskowitz, DeGrasse and Feinman, JJ.
Footnote *: Paragraph 10 of theproprietary lease provides that "[t]he Lessee . . . shall quietly have, hold andenjoy the apartment without any let, suit, trouble or hindrance from the Lessor. . . ."