Adam Leitman Bailey, P.C., was retained to represent an elderly couple who wished to sell their cooperative in Manhattan so that the husband could receive treatment elsewhere. While the couple found a buyer willing to purchase the unit for its fair market value, the application was rejected by the cooperative board because it has set an unwritten policy setting a minimum sale price floor. After the unit remained on the market for an extended period of time, the couple brought suit against the cooperative alleging breach of contract and breach of fiduciary duty. The board sought to dismiss the suit and when its motion was rejected, it answered and moved for summary judgment to dismiss the breach of contract claim before the couple was able to conduct any discovery. The board used the fallback position that its activities were protected by the business judgment rule. It also sought a judgment declaring that the board may consider a unit’s purchase price when deciding to grant or withhold consent to a sale. Adam Leitman Bailey, P.C., countered by arguing that the breach of contract claim should stand because there was a dispute as to whether the sum demanded by the board to approve the sale reflected the true market value or constituted an improper restraint on trade.

Additionally, Adam Leitman Bailey, P.C., argued that the board was not entitled to a declaratory judgment because while the couple agreed that price could be considered, it could not be the sole factor to consider, The Appellate Division agreed noting that the board’s contention did not raise a judicable controversy.

The Appellate Division, First Department declared that the apartment unit’s purchase/sales price could not be the sole factor in rejecting a purchaser.

Jeffrey R. Metz represented the Plaintiffs on appeal.