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The Super Is Extorting Us

And the board is helping him.  That’s what a couple in an Upper East Side co-op claimed.   And we’re not gonna take it.

So what did they do – sue the board, the building, the management company, and the super, alleging a laundry list of wrongs — breach of contract, fraud, prima facie tort, breach of fiduciary duty, and more. The trial court tossed out some, but not all, of their claims. Then just yesterday the Appellate Division tossed out a few more, but let stand the charge for breach of fiduciary duty against the board, which in itself is pretty unusual given that the business judgment rule protects members against most everything. 

Scott Greenspun, counsel for the building at 245 East 87th Street, believes the opinion was wrongly decided, and the whole case should have been put to rest. 

According to him, the couple hadn’t even moved into their apartment, which they bought from the sponsor, when all this happened. They claim that the super demanded $350 in connection with the renovations that already had been approved by the board and the Buildings Department, and when they refused to submit to his extortion demands, the board issued a stop work order.

Mr. Greenspun was quick to point out that  there is no claim of financial gain by any board member.

I’m not saying the demand is right – if it happened.   But as anyone who’s lived in a high rise here knows, it’s not unheard of for money to change hands between residents and resident managers during renovations. Only usually it’s “voluntarily” offered up, without a request, as an appeasement to the renovation gods, to get things done that otherwise would not.

 Such an offering enabled one couple I know to get the super to look the other way when it dug through cement ceilings to install recessed lighting, while another couple in the same building that wasn’t so generous wasn’t allowed to channel through the cement and had to settle for lamps to light the dark.

Back to the extortion demands on the UES.  Yesterday the Appellate Division handed down a decision that said the couple sufficiently made out a claim for beach of fiduciary duty against the board, “with assertions that indicated actual knowledge of their superintendent’s purported extortionate demands from plaintiffs and substantially assisting those demands by issuing a stop work order once plaintiffs discontinued payment to the superintendent.”

What’s next?  According to Mr. Greenspun, after discovery, which is almost complete, the building plans to make a motion for summary judgment and if that doesn’t put an end to all this, the drama will turn into a full blown trial.

But the real fall out won’t be felt till after that.  Will the tradition of greasing supers’ palms to get stuff done really stop?  Will boards take steps to better insulate themselves?  Will it be harder for owners to get work done?  Guess we’ll all have to wait and see.

 Read for yourself:

Kleinerman v.245 E 87 Tenants Corp., 2010 NY Slip Op. 04703, June 3, 2010, App. Div. 1st Dept.

Click here, then enter the case date and number under Search By Citation.

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