The well known “business judgment rule” gives a cooperative’s Board of Directors wide discretion in how to administer the building it oversees. Many Boards, however, mistake this for an even broader mandate to do whatever they wish. When a family that owned a penthouse apartment in a coop came to Adam Leitman Bailey, P.C., they were faced with a Board that believed that it could install and maintain noisy, shaky, leaky HVAC condensers on the space adjoining the clients’ apartment, making the clients’ lives a misery. Through carefully crafted court papers, Adam Leitman Bailey, P.C. argued that the Board’s discretion did not extend to making the decision on whether or not to obey the law. The Board, for its part, argued that even the question of whether it was obliged to find out what the law is was purely within its discretion.

When Adam Leitman Bailey, P.C. and the Board appeared before the judge, he stated that he was going to issue an order and it was up to the parties to make suggestions to the Court as to what the Order should contain.

In its proposed Order, the Board sought to have the judge order that the Board would retain full authority to do as it wishes. By contrast, Adam Leitman Bailey, P.C.’s order set forth a detailed script for each action the Board should be mandated to take, including informing itself of legal requirements and reporting to the Court and Adam Leitman Bailey, P.C. on a fixed schedule as to what progress had been made in solving the problems.

The Court almost completely ignored the Board’s proposed order and fashioned its own order, in many places copying Adam Leitman Bailey, P.C.’s proposal word for word. The resulting order was precisely the script Adam Leitman Bailey, P.C. had recommended, with tight deadlines and even tighter reporting requirements.

In short, the Board’s discretion was, at Adam Leitman Bailey, P.C.’s urging, reduced from determining whether to obey the law, to figuring out how to obey it completely.

For Adam Leitman Bailey, P.C., Dov Treiman did the principal drafting of the papers and Courtney Lerias did oral argument, facing off against an extraordinarily rude, aggressive, and arrogant adversary.