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Cooperative Properly Terminated Tenant-Shareholder’s Proprietary Lease for Objectionable Conduct

A tenant-shareholder sought a preliminary injunction against a cooperative’s termination of his proprietary lease.  The directors voted to terminate the proprietary lease for objectionable conduct that included making rude comments to fellow residents, shouting profanities in the presence of young children, harassing and screaming at a pregnant woman, yelling at other residents, and taking cellphone photographs of a toddler who was unclothed.  The objectionable conduct also included repeatedly filing baseless complaints against other residents, some of which were refuted by security camera footage, and harassing the building staff and property manager.  The tenant-shareholder denied all the alleged objectionable conduct and asserted that he had issues with his neighbors because they allegedly smoke marijuana, which harms one of his children, who suffers from autism.  The tenant-shareholder also asserted that the cooperative was retaliating against him because he submitted a demand for inspection of books and records following a maintenance increase.

The court denied the injunction.  To obtain a preliminary injunction, a plaintiff must establish, among other things, a likelihood of success on the merits.  Here, the termination of plaintiff’s proprietary lease is governed by the Business Judgment Rule, and could only be overturned if the court found that the Board acted in bad faith or did not comply with the termination procedures of the lease.  There was “no dispute that [the cooperative] did what it was supposed to do,” including convening a special meeting at which plaintiff was afforded ample opportunity to present his side of the story.  The court further observed that the objectionable conduct involved not merely a single incident, but a pattern of misconduct that continued after prior warnings.  “A co-op is certainly entitled to seek the removal of a leaseholder where it contends that there is a documented history of misconduct spanning multiple years.”  Plaintiff’s challenge to the termination could not succeed where “the evidence presented shows a well-documented process whereby [the cooperative] informed plaintiff about his objectionable conduct over the last few years, gave him a chance to shape up and ultimately decided to take action when he did not.”  Haimovici v. Castle Village Owners Corp., Index No. 156094/2022, 2022 N.Y.L.J. LEXIS 956 (Sup. Ct. N.Y. Co. Sept. 7, 2022).