In 1990, in Levandusky v. One Fifth Avenue Apartment Corp.,1 the Court of Appeals held that the business judgment rule is the proper standard of judicial review of decisions made by a cooperative governing board. In 2003, in 40 West 67th Street Corporation v. Pullman,2 that court held the business judgment rule is applicable to the termination of a tenant-shareholder’s tenancy just as it is to decision-making of less significant impact by cooperative boards, but cautioned that, where termination is involved, there must be “heightened vigilance” that the Levandusky test is satisfied.
A recent decision by Judge Shlomo S. Hagler of the Civil Court, New York County, in F.T. Apartments Corp. v. Barbara L.,3 denying a co-op’s motion for summary judgment in a holdover proceeding, addressed what the court characterized as the novel issue of:
whether the gap of more than three years from the time petitioner provided respondent with the only direct notice of her alleged objectionable conduct to the date of notice of termination deprives respondent [of] appropriate “notice and opportunity to be heard” as contemplated in Pullman to satisfy the “heightened vigilance” in examining whether the board’s action meets the Levandusky test.4
