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Scott E. Mollen

Co-Ops—Business Judgment Rule—Board’s Determination to Terminate Proprietary Lease Held To Be Within Its Scope of Authority—Allegations That Tenant Repeatedly Disturbed And/Or Created Unreasonable Noise In the Building Interfering With Other Residents’ Rights and Comfort

This decision involved a holdover proceeding, where a cooperative corporation (co-op) moved for summary judgment on its claims for repossession of an apartment, reasonable attorney fees and disbursements and use and occupancy, for the months that the respondent shareholder held over in the apartment. The co-op sought to terminate the shareholder’s proprietary lease and repossess the apartment, based on the shareholder’s failure to cure several lease violations which were specified in notices to cure (notices), dated May 30, 2012, Aug. 5, 2014, Nov. 25, 2015 and Dec. 15, 2015. The notices asserted, inter alia, that the shareholder had breached paragraphs 13 and 18(b) of the proprietary lease and paragraphs 4, 5 and 25 of the house rules, i.e., “the [shareholder] and/or her guests made or permitted disturbing and/or unreasonable noises in the building or caused unreasonable interference with the rights, comfort…of other…residents or unreasonably annoyed them.”

The notices listed “specific allegations of objectionable behavior and complaints lodged against the [shareholder].” The last notice listed 68 allegations and/or complaints, “some of which required police intervention.” After the shareholder failed to cure the violations, in accordance with the proprietary lease and the co-op’s by-laws, the co-op, by written notice, called a special meeting of its directors to determine whether the shareholder had engaged in “objectionable conduct,” whether “the [shareholder’s] tenancy was undesirable and whether her proprietary lease should be terminated and her shares sold at auction.”

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