Board’s Bad Conduct and Overreaching: Shareholder’s Negligence and Consequential Damage Claims Not Duplicative and Go Forward as well as Consequential Damages for Lost Rental Income; Board’s Motion for Summary Judgment Denied
The law generally provides that when a party asserts a claim for breach of contract and for negligence based upon the same operative events, the negligence claim will be dismissed as being duplicative of the breach of contract cause of action. This is the issue Adam Leitman Bailey faced when taking over a case brought by shareholders of two penthouse units in a small cooperative building. Due to extensive leaking from numerous areas of the roof, the units suffered severe water damage leading to mold infestation. The situation became so serious that the shareholders, and their young children were forced to seek shelter elsewhere. The Board of Directors refused to acknowledge its responsibility for maintaining and repairing the roof claiming that the leaking condition was caused by improvements made by the shareholders’ predecessor for which the shareholders bore responsibility. Before the trial court, the cooperative sought, among other things, to dismiss the negligence claim. Adam Leitman Bailey’s trial counsel successfully defeated that request and the cooperative appealed to the Appellate Division, First Department.
On appeal, Adam Leitman Bailey successfully demonstrated to the court that under New York law, the cooperative had a non-delegable duty to maintain the roof in good repair independent of the parties’ duties and obligations under the proprietary lease. The court went on to cite examples of the cooperative’s negligence which the firm brought to the court’s attention. Aside from awarding the clients the right obtain damages under the causes of action for breach of contract and negligence, the court also sanctioned the shareholders’ various claims for consequential damages as provided for by the proprietary lease.
The clients were represented by Colin E. Kaufman at the trial level and Jeffrey R. Metz before the Appellate Division.