First published: Aug 2025
Single Me Out? Not So Fast
TAKEAWAY Here, the court recognized that individual board members should not be subjected to litigation simply for serving on a board. To hold board members personally liable, plaintiffs must allege with specificity that they committed wrongful, fraudulent, or tortious acts beyond their role as board members. The Business Judgment Rule protects board members from liability when they exercise business judgment within their authority. This protection can warrant dismissal of lawsuits at the pleading stage, even when all allegations in the complaint are accepted as true for purposes of the motion. Being named as a defendant in a lawsuit imposes significant burdens on individual board members. Underlying decisions such as this is the (often unstated) recognition that absent such judicial protections……no one will want or desire to serve on a cooperative or condominium board.
BENT V. THE 99 JANE STREET CONDOMINIUM
WHAT HAPPENED Mr. Bent and his family lived on the top floor at the 99 Jane Street Condominium in Greenwich Village. In June 2021, the condominium board proposed capital improvement plans to the building costing approximately $3 million. Bent objected to these proposed plans and claimed that the board's subsequent treatment of him was in retaliation for his objections to the capital improvements. Bent said his family experienced unsafe and unhealthy living conditions due to: roof leaks that were not repaired, causing water damage and mold in his unit; a malfunctioning air conditioning system in the common hallway leading to his apartment resulting in hallway temperatures exceeding 90 degrees; rooftop ventilation fans that were not repaired, even though they created excessive noise that he said violated New York City Noise Code and Building Code requirements. He claimed his family was denied condo services and that the "retaliation" against his family included the board spreading false and malicious communications about him in notices distributed to unit owners through the building's Building Link system. These communications, he said, affected his participation in the residential board elections.
IN COURT Bent filed a myriad of claims against the condominium board and four individual directors. The court dismissed all claims against the four individual board members because he failed to specify what each board member had actually done, and because the directors were protected by the business judgment rule, which shields board members from liability for decisions within their authority, such as repair decisions. The court dismissed several claims against the board, but allowed the claims regarding water intrusion and high hallway temperatures to proceed.
COUNSEL for the board and condominium WILLIAM GELLER Braverman Greenspun; for Mr. Bent JOHN G. DELLAPORTAS Emmet, Marvin & Martin; Justice Lori S. Sattler
