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De Soignes v Cornasesk House Tenants Corp. 2003 NY Slip Op 30008(U) July 21, 2003 Supreme Court, New York County Docket Number: Judge: Marilyn Shafer Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication.

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SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY
PRESENT: HON. MARILYN SHAFER
Justice

PART

36

NICOLE A. DE SOIGNES,
INDEX NO.-112044/02 Plaintiff(s), -againstMOTION DATE MOTION SEQ. NO. MOTION CAL. NO.
002

CORNASESK HOUSE TENANTS C O W
Defendant@). The following papers, numbered 1 to

were read on this motion to/for
PAPERS NUMBERED

Notice o Motion/ Order to Show Cause - Affidavits f Answering Affidavits - Exhibits Replying Affidavits

- Exhibits

-

Defendant moves for an order granting summary judgment as follows: (i) declaring that plaintiff does not have the unconditional right to sublet the subject apartments and is required to obtain the consent of defendant's Board of Directors (the Board) prior to subletting or renewing any previously authorized sublet; (ii) declaring that plaintiff is in violation of her proprietary leases because she sublet the apartments without Board approval; (iii) declaring that defendant's current sublet policy is valid and enforceable; (iv) dismissing plaintiff`s second cause of action for injunctive relief; and, (v) dismissing plaintiff's third cause of action for attorney's fees and granting defendant's counterclaim for attorney's fees. Plaintiff cross-moves for an order granting summary judgment as follows: (i) declaring that defendant's notices to cure are invalid; (ii) declaring that plaintiff has an unconditional right to sublet her apartments; (iii) declaring that plaintiff is not in violation of heir

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proprietary leases; (iv) declaring that the sublet policy adopted by defendant on January 1, 2002 is void; (v) enjoining defendant from terminating her leases; and, (vi) awarding plaintiff her attorney's fees. Plaintiff is the proprietary lessee and the owner of the shares allocated to apartments lB, 2B and 5A (collectively, the Apartments) in a cooperative apartment house (the building) owned by defendant and located at 238 East 84`h Street in Manhattan. Plaintiff has never resided in any of the Apartments, which she purchased in 1972,1973 and 1980 for investment purposes and subleased thereafter. On August 1,2001, the Board adopted new subletting rules, effective January 1,2002 (the 2002 Rules). The 2002 Rules, inter alia, restrict the subletting of apartments to two of` every four years and impose a 10% surcharge on every sublet. On May 25,2002, plaintiff` received a 10-day notice to cure for each of the Apartments. The notices state that plaintiff` is in violation of paragraphs 14, 15 and 16 of her proprietary leases because she does not occupy the Apartments and because she sublet the Apartments without first obtaining; defendant's consent. Plaintiff commenced this action on June 5,2002, seeking inter alia a declaration thait she has an unconditional right to sublet the Apartments by virtue of a letter dated December 11,1972 (the Letter) that she received from defendant's then Chairman of the Board. The Letter states: " [tlhis will confirm our conversation whereby we stated that the shareholders
of Cornasesk House Tenants Corporation are allowed to sublet inconditionally[sic] their

apartment(s) for the duration of their ownership" (see plaintiff's exhibit 3). This court granted plaintiff's application for a temporary restraining order by order dated June 13,2002 and granted plaintiff's application for a Yellowstone injunction by order dated August 23, 2002.

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In support of its motion for summary judgment defendant invokes the business judgment rule, cites plaintiff's purported violations of the subletting provisions of her leases., contends that plaintiff's reliance on the Letter is misplaced because the Letter merely states defendant's policy in 1972, contends that the Letter violates paragraphs 14'15 and 16 of the leases as well as 8 5Ol(c) of the Business Corporation Law (BCL), defends the 2002 Rules, andl requests attorney's fees. In opposition and in support of her cross-motion, plaintiff makes the following arguments: she purchased the Apartments for investment purposes in reliance on the Letter ; she voluntarily submitted sublet packages to the Board; she sublet the Apartments for over 30 years without interference from defendant; defendant's motion is barred by the doctrine!; of waiver, estoppel and laches; defendant acknowledged that it could not prevent plaintiff from subletting in March 1991 when it withdrew its attempt to impose consent requirements; the 2002 Rules violate Article 5.04 of defendant's by-laws by imposing a 10% surcharge on all sublets; the notices to cure are defective because they are vague and fail to state how plaintif I can cure her purported defaults; and, plaintiff is entitled to attorney's fees pursuant to Real Property Law 8 234. The Letter served plaintiff well for the past 30 years, but the past is past. The Letteir is not incorporated in plaintiff's leases. Paragraph 15 of the leases provides in pertinent part that the lessee cannot sublet the apartment@) or renew any previously authorized sublease without consent of the Board or lessees owning at least 65% of the then issued shares of the lessor, subject to such conditions as the Board or lessees may impose, which consent can b12 withheld for any reason or no reason (see defendant's exhibits E-G, ql5). Plaintiff has never obtained Board or shareholder consent. Although the Board obviously sat on its hands for decades (except, perhaps, for March 1991),plaintiff's arguments concerning reliance, waiver, estoppel and laches, which at first glance appear persuasive, are of no avail because they are
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in conflict with BCL 0 501(c). The Letter, supra, which purports to grant to plaintiff the unrestricted right to sublet the Apartments for the duration of her ownership, violates BCL

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