A European woman and her young family sought to perform renovations to their cooperative apartment to expand the Building Code (“Building Code”), and submitted plans to the Board for review and approval. After multiple exchanges with the Board’s architect, the Board fully approved the renovations to the apartment, and the work went underway. Little did the family know, that the Board would eventually engage in discrimination based on national origin, using the approved renovation plan as a pretext for discrimination.

Specifically, a member of the Board, driven by personal animus and prejudice towards the woman and her family, decided to launch a campaign of harassment and discrimination against them. The woman had done nothing wrong – she fully complied with the scope of renovations that not only had been fully approved by the Board, but also mirrored the same renovations performed by multiple members of the Board to their own apartments.

After performing over ten inspections of the apartment and finding no violations, the disgruntled Board member escalated matters, filing an extensive lawsuit in New York Supreme Court on behalf of the Board against the woman, claiming that her renovations, including the modifications to the flooring, were illegal and not in accordance with the plans or the Building Code. The allegations also claimed that the renovations caused unreasonable noise in the apartment owned by the Board member with personal animus towards the woman.

The woman was distraught, and came to Adam Leitman Bailey, P.C. to defend herself and her family from the baseless allegations and bullying and harassment. Joanna C. Peck, Esq. and John M. Desiderio, Esq. were assigned to the case.

Engaging a team of architects, structural engineers, and noise experts, Ms. Peck investigated the apartment, and the renovations performed by the family. The professionals determined that the family had performed the renovations in accordance with the plans approved by the Board and the Building Code.

But there was more to do, given that the woman had been in many apartments in the building and observed virtually the same renovations in the Board members’ apartments who were, at the same time, claiming that the family’s renovations were purported illegal. In other words, if a Board member wanted to perform the renovation it was okay, but if the European family wanted to perform the same renovation, that was different, and unpermitted.

Led by the attorneys at Adam Leitman Bailey, P.C., a detailed research investigation was commenced by the professionals to look into the renovations in the building. Such research, which included pulling records from the New York City Department of Buildings, uncovered that the Board members were acting hypocritically and discriminatory as the Board members’ renovations were found to contain the same so-called illegalities that the Board had claimed against the woman in the lawsuit.

In sum, the Board was breaching its fiduciary duty against the woman by discriminating against her and using the renovations as a decoy for discrimination based on national origin. Conversations between Board members at other meetings also revealed that the Board had made negative comments regarding the family’s children, adding further to the illegal discriminatory conduct. In sum, the business judgment rule, which generally provides broad protections of Board members’ conduct and decision making, was no longer in play to protect the individual Board members from their unfair and discriminatory treatment and conduct towards the European family – they could not be held personally accountable.

Armed with these damning allegations that individual members of the Board had acted outside the business judgment rule by engaging in discriminatory conduct towards the woman, and her family, Adam Leitman Bailey, P.C. filed a lawsuit against each of the individual Board members for discrimination and acting in bad faith. In particular, Ms. Peck and Mr. Desiderio revealed in the countersuit that the Board members had performed the same renovations to their apartments and had permitted one of the members of the Board to use his jealousy and prejudice as a pretext for the lawsuit.

The attorneys also notified the New York State Division of Human Rights regarding the discriminatory conduct by the Board.

The Judge realized that the Board had bullied the woman and her family, and that this was a case that should clearly settle. He encouraged the parties to do so.

The Judge also recognized that the Board was clearly between a rock and a hard place – fight the lawsuit, and have it publicly revealed that the members had acted was personal animus and discrimination towards the family, or drop the lawsuit, and settle with the woman.

Using their negotiation skills, the attorneys at Adam Leitman Bailey, P.C. negotiated an extremely favorable settlement on behalf of the woman and her family. The settlement permitted the family to maintain the renovations in their apartment, neutralize the demands by the Board to pay legal fees, and freed the apartment to be sold without encumbrances and issue.

Adam Leitman Bailey, Joanna C. Peck, and John M. Desiderio worked on this matter.