Adam Leitman Bailey, P.C. Defeats Shareholder’s Motion to Dismiss and Preserves Cooperative Board’s Claims Seeking to End Decades-Long Unauthorized Commercial Parking Operation
In a long-standing dispute between a shareholder in a commercial cooperative building and the board of the cooperative, the issue arose as to whether the shareholder’s demised premises included an area which permitted her to park cars for profit. When answering the shareholder’s article 78/declaratory judgment action, ALBPC, on behalf of the Board interposed certain counterclaims seeking to recover monetary damages for the loss of the corporate opportunity spanning more than two decades, as well as a declaratory judgment that the prior, and any future, operation of the parking lot constituted a breach of the shareholder’s proprietary lease. Additionally, a counterclaim for a permanent injunction forever barring the shareholder from any continued operation of the lot was asserted. The shareholder moved to dismiss all of the counterclaims. The court, however, found that Board’s counterclaim for unjust enrichment- enriching herself at the corporation’s expense- should stand as well as the counterclaims for declaratory judgment and permanent injunctive relief. As a result, the shareholder cannot park with impunity and a trial will determine whether (i) the Board should recover damages, (ii) whether the lease was breached, which could eventuate in termination of the proprietary lease, (iii) whether the operation should cease to exist, and (iv) the amount of legal fees due to the cooperative.
Jeffrey R. Metz, represented the Cooperative Board before the Supreme Court.