BLUMBERG v. ALBICOCCO (2006)

Winston Churchill once said;  “No one pretends that democracy is perfect or all-wise.”   In this case Plaintiff contends that the fine imposed upon her by the board that governs “the little democratic sub society” that is her condominium, was not only unwise but illegal.

The Defendants, individual members of the Board of Directors of the Landmark Colony at Oyster Bay Homeowners Association and the Association itself, apply to the Court for an order granting them summary judgment dismissing the complaint and awarding them $4,237.60 plus interest costs and disbursements on their counterclaim.   Plaintiff Diana Blumberg, the owner of a home within the Landmark Colony at Oyster Bay, opposes.

Factual Setting

The Landmark Colony at Oyster Bay is a 33 unit condominium comprising 8 buildings the first public offering of which was in 1979.   Plaintiff Diana Blumberg and “her then husband” purchased the unit known as 14 Adams Court in 1982.   Pursuant to the “Declaration of Covenants, Restrictions, Easements, Charges and Liens,” each unit owner is a member of the “Landmark Colony at Oyster Bay Home Owners Association, Inc.” [hereinafter “Declaration”].   An undated document entitled, “By-Laws of Landmark Colony at Oyster Bay Homeowners Association, Inc.,” is presented to the Court as the by-laws by which the Home Owners Association, a Not-For-Profit corporation, is governed.

The Complaint alleges that on March 20 and 21 of 1999 Plaintiff Diana Blumberg conducted a garage sale at 14 Adams Court.   Although the Defendants' Answer admits this allegation, both Defendants and Plaintiff have referred to a garage sale on June 20 and 21 of 1999.  (Plaintiff's Response to Interrogatory 19;  Affirmation of Brian S. Sokoloff, page 2).   The Complaint further alleges that Plaintiff was thereupon fined $250 for each day of the garage sale or a total of $500 for violating Article XI(d) of the “Declaration.”   That provision states:  “No nuisance shall be allowed upon the property nor shall any use or practice be allowed which is a source of annoyance to residents or which interferes with the peaceful possession and proper use of the property by its residents.”   Although the Defendants' Answer denies this allegation, Defense Counsel has averred that, “defendants modestly fined plaintiff $250 per day, for a total of $500 for creating the nuisance and annoyance.” (Affirmation of Brian S. Sokoloff, pages 2 and 3).   Plaintiff has refused to pay the fine and in her First Cause of Action seeks a declaration that the imposition of the fine was null and void.   In her second Cause of Action Plaintiff seeks a declaration that the lien filed against her unit arising out of the fine is null and void.

The subject matter of the Third and Fourth Causes of Action is a claim that the Defendant Homeowners Association has failed in its duty to maintain and repair the common areas associated with the Plaintiff's unit.   The Third Cause of Action seeks a mandate that such maintenance and repair work be done and the Fourth Cause of Action seeks an award of punitive damages premised on Plaintiff's contention that Defendants' conduct was motivated by bad faith.   Finally, as a Fifth Cause of Action Plaintiff seeks an award for the attorney's fees she has incurred.   The Defendants' Answer, in addition to denials and defenses, includes a Counterclaim for $4,237.60 for homeowners dues, common charges and late fees.

The Garage Sale

In Levandusky v. One Fifth Avenue Apartment Corp., 75 N.Y.2d 530, 536, 554 N.Y.S.2d 807, 553 N.E.2d 1317 [1990] the Court of Appeals not only employed the oft quoted description of a cooperative or condominium association as, “a little democratic sub society of necessity” (Hidden Harbour Estates v. Norman, 309 So.2d 180, 182 [Fla. 4th DCA 1975] ), but further characterized it as a “quasi-government.”   Fleshing out this analogy, the Court of Appeals said;

“Through the exercise of this authority, to which would-be apartment owners must generally acquiesce, a governing board may significantly restrict the bundle of rights a property owner normally enjoys.   Moreover, as with any authority to govern, the broad powers of a cooperative board hold potential for abuse through arbitrary and malicious decision-making, favoritism, discrimination and the like.”  (Levandusky v. One Fifth Avenue Apartment Corp., supra at 536, 554 N.Y.S.2d 807, 553 N.E.2d 1317).

While it acknowledged the potential for abuse of power, the Court found that the standard to be applied for the review of cooperative or condominium board actions should be modeled on the elastic business judgment rule from the corporate sphere as such a standard would best suit the purposes for which residential communities and their governing structures were formed.   Those purposes were stated to be;  “protection of the interest of the entire community of residents in an environment managed by the board for the common benefit.” (id. at 537, 554 N.Y.S.2d 807, 553 N.E.2d 1317).

 Before reviewing a condominium board's exercise of any power under the business judgment standard, however, the Court must first make a determination as to whether the board in fact possessed the power it purported to exercise. (see, Schoninger v. Yardarm Beach Homeowners' Ass'n, 134 A.D.2d 1, 6-7, 523 N.Y.S.2d 523 [2d Dept.1987];  Walker v. Briarwood Condo Ass'n, 274 N.J.Super. 422, 644 A.2d 634 (1994);  Miesch v. Ocean Dunes Homeowners Ass'n, 120 N.C.App. 559, 464 S.E.2d 64 [N.C. Ct. of App., 1995] ).   After all, no democratic principle is more fundamental than that all governments ultimately derive their powers from the consent of the governed.   Thus, the power claimed by the Board must either be granted by statute or derived from the Declaration or By-Laws of the Condominium.  (1A Rohan & Reskin, Condominium Law & Practice, § 45.04[1] (2006);  Fierro, “Condominium Association Remedies Against a Recalcitrant Unit Owner,” 73 St. John's L. Rev. 247, 252 (1999)).

“[C]ourts and statutes vary widely as to whether monetary sanctions are permissible and, if so, in what amounts and after what level of due process sanctions are reasonable.”  (1A Rohan & Reskin, Condominium Law & Practice, § 4406[3][b][iv] (2006)).   Responding to the argument that the enabling statute placed no inherent limitation on the power of a condominium board, the Supreme Court of Virginia held;  “The imposition of a fine is a governmental power.   The sovereign cannot be preempted of this power and the power cannot be delegated or exercised other than in accordance with the provisions of the Constitutions of the United States and of Virginia.” (Unit Owners Ass'n of BuildAmerica-1 v. Gillman, 223 Va. 752, 764, 292 S.E.2d 378 (1982)).   Thereafter, the Virginia Legislature amended the enabling statute to permit “assessments” not exceeding $50 for a single offense and $10 per diem for a continuing offense provided certain procedural safeguards were followed. (1a Rohan & Reskin, Condominium Law & Practice, § 44,06[3][b][iv] (2006)).   In New Jersey, which like New York uses a business-judgment-rule standard of review, it has been held that absent a specific grant in the enabling statute and association by-laws, there exists no power to impose fines or levy liens based on unpaid fines.  (Walker v. Briarwood Condo Ass'n, 274 N.J.Super. 422, 644 A.2d 634 (1994)).

The New York Condominium Act (Real Property Law, Article 9-B) provides that the operation of the condominium property;  “shall be governed by by-laws, a true copy of which shall be annexed to the declaration.   No modification of or amendment to the by-laws shall be valid unless set forth in an amendment to the declaration and such amendment is duly recorded.”  (RPL § 339-u).   The by-laws may impose such restrictions on and requirements respecting the use of units;  “as are designed to prevent unreasonable interference with the use of their respective units and of the common elements by the several unit owners.”  (RPL § 339-v(1)(i)).   The by-laws may be amended upon a sufficient vote of the unit owners.  (RPL § 339-v(1)(j)).

 While a validly adopted by-law banning all garage sales within the condominium would be sustainable under the business judgment rule (see, 600 West 115th Street v. 600 West 115th Street Condominium, 180 A.D.2d 598, 580 N.Y.S.2d 307 [1st Dept.1992] ), no such by-law was in effect at the time Plaintiff held her garage sale.   Rather Defendants contend that the holding of a garage sale violated the above quoted portions of the Declaration which proscribed any “nuisance” and “any use or practice ․ which is a source of annoyance.”

 “[N]uisance, as a general term, describes the consequences of conduct, the inconvenience of others, rather than the type of conduct involved.”  (Copart Industries v. Consolidated Edison Co., 41 N.Y.2d 564, 569, 394 N.Y.S.2d 169, 362 N.E.2d 968 (1977) (citation omitted)).   An element of a private action for nuisance is that the inconvenience caused by the conduct complained of be substantial.  (Id. at 570, 394 N.Y.S.2d 169, 362 N.E.2d 968;  New York Civil Pattern Jury Instructions 3:16).   To prosecute a private claim for a public nuisance, a plaintiff must prove particular damage resulting from the public nuisance.  (Van Cortlandt v. The New York Central Railroad, 265 N.Y. 249, 264, 192 N.E. 401 (1934);  New York Civil Pattern Jury Instructions 3:18).   There is no evidence that the garage sale either substantially inconvenienced other condominium residents nor caused them particular damage.   While these deficiencies would pose no obstacle to the enforcement of a specific by-law prohibiting garage sales or an appropriately adopted resolution by the Board of Directors defining garage sales as a nuisance, no such by-law or resolution existed at the time in question.

There is no evidence that the two members of the Board of Directors who have made written statements to the effect that they warned Plaintiff that a garage sale constituted a prohibited nuisance were authorized by the Board to relay such warnings.

The Maintenance Claim

 The Complaint alleges that the Defendants failed to provide certain maintenance and repairs for Plaintiff's unit.   The performance of repairs and maintenance are matters well within the authority of the Defendant Board of Directors to which the business judgment rule applies.  “So long as the board acts for the purposes of the cooperative, within the scope of its authority and in good faith, courts will not substitute their judgment for the board's.”  (Levandusky v. One Fifth Avenue, 75 N.Y.2d 530, 538, 554 N.Y.S.2d 807, 553 N.E.2d 1317 (1990);  Captain's Walk Homeowners Ass'n v. Penney, 17 A.D.3d 617, 794 N.Y.S.2d 82 [2d Dept.2005] ).

Defendants have offered sworn testimony to the effect that maintenance and repairs are done on an “as needed” nondiscriminatory basis and sometimes performed at the discretion of the workman employed to perform the task.   In her affidavit in opposition Plaintiff specifies three items that she claims demonstrate the Board of Directors' bad faith.   She claims;  “there has been no trimming of her bushes that are under twelve (12) feet high, nor has there been lawn maintenance․” (Blumberg Affidavit, page 8).   However, what she relies upon as an admission by Defendants refers to the spraying of trees, not trimming.   Nor are her claims of lack of lawn and shrub maintenance, to which Defendants have submitted sworn denials, supported by any evidence, photographic or other.

Plaintiff somewhat disingenuously avers that her unit had never been painted, but later states;  “․ when it was painted during the course of this litigation in 2005, no steps were taken to repair the rotted wood.”  (Blumberg Affidavit, page 12 (emphasis supplied)).   With regard to the rotted wood, Plaintiff offers no grounds for her assertion that such a condition should be the responsibility of the Defendant Homeowners' Association.   Article IX, Section 2 of the Declaration makes individual unit owners responsible for maintenance “not otherwise directed by the provisions of this Declaration to be performed by the Association,․”

Finally, Defendants acknowledge that Plaintiff's driveway is in need of repair and is one of five units awaiting such repairs.   Plaintiff neither alleges nor offers any evidence that those driveways resurfaced before hers were not at least equally in need of repair.

Conclusion

The Defendants' motion for summary judgment dismissing the First and Second Causes of Action are denied and pursuant to CPLR 3212(b) the Court grants summary judgment to Plaintiff on these causes of action and declares that the action of the Board of Directors imposing a fine premised on the garage sale was null and void as are all subsequent actions intended to collect and enforce the fine.

The Defendants' motion for summary judgment dismissing the Third, Fourth and Fifth Causes of Action is granted and the same are hereby dismissed.

Each party shall be responsible for their own legal fees.  (Hooper v. AGS Computers, 74 N.Y.2d 487, 549 N.Y.S.2d 365, 548 N.E.2d 903 (1989);  Pelli v. Connors, 7 A.D.3d 464, 777 N.Y.S.2d 805 [1st Dept.2004] ).

It is, SO ORDERED.

GEOFFREY J. O'CONNELL, J.