Cooper v. Greenbriar Owners Corp.

In an action to recover damages for the unreasonable failure to approve a prospective buyer of a cooperative apartment, (1) the defendants appeal from so much of an order and judgment (one paper) of the Supreme Court, Queens County (Savarese, J.H.O.), dated March 22, 1996, as, after a nonjury trial, dismissed their counterclaim to recover legal expenses, and (2) the plaintiffs cross-appeal from so much of the same order and judgment as dismissed their complaint. Ordered that the order and judgment is affirmed, without costs or disbursements: In January 1991 the plaintiffs commenced the instant action to recover money damages, alleging that the defendant Green-briar Owners Corp., a cooperative corporation, and its board of directors (hereinafter collectively the Board), acted in an "arbitrary, capricious, [and] illegal” manner in rejecting a prospective purchaser of their cooperative shares. In the answer, the Board counterclaimed to recover legal expenses pursuant to the proprietary lease between the cooperative cooperation and the plaintiffs. After a hearing, the Supreme Court dismissed both the plaintiffs’ complaint and the counterclaim of the Board. We affirm. It is well established that where a cooperative 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” (Matter of Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530, 538; Joint Queensview Hous. Enter, v Balogh, 174 AD2d 605, 606). Here, the plaintiffs’ allegation of bad faith on the part of the Board in rejecting the application of the proposed purchaser of their cooperative shares was refuted by clear evidence that the Board acted within the scope of its authority, in good faith, and for the benefit of the residents collectively (see, Simpson v Berkley Owner’s Corp., 213 AD2d 207; Allen v Murray House Owners Corp., 174 AD2d 400, 404-405). Since the plaintiffs have failed to meet their [312] burden of demonstrating a breach of fiduciary duty on the part of the Board, the Supreme Court properly dismissed the complaint (see, Matter of Levandusky v One Fifth Ave. Apt. Corp., supra; Katz v 215 W. 91st St. Corp., 215 AD2d 265; Simpson v Berkley Owner’s Corp., supra; Board of Mgrs. v Feldman, 190 AD2d 650; Allen v Murray House Owners Corp., supra). We conclude that under the circumstances of this case the imposition of attorneys’ fees upon the plaintiffs was not warranted, and the counterclaim of the Board was properly dismissed. Rosenblatt, J. P., Thompson, Altman and Luciano, JJ., concur.