May a co-op shareholder maintain a terrace structure when the board is required to make repairs to the terrace as provided in the proprietary lease? The answer was a clear "no" in Gramercy Park Residence Corp. v. Ellman, decided last year.
Plaintiff Gramercy Park Residence Corp. was the owner of a 150-unit cooperative apartment building located at 60 Gramercy Park North in Manhattan. Defendant Elaine Ellman purchased the shares of her cooperative penthouse apartment, No. 18-F, in plaintiff's building in July 1985. About a year before Ellman's purchase, her predecessor had "improved" the terrace adjoining apartment 18-F on the eastern side of the building with a fiberglass sun-roof supported by one wall and three wooden posts.
In February and March of 2002, the defendant - without obtaining the permission of the plaintiff's board or a permit from the New York City Buildings Department - hired a contractor to enclose the entire terrace area, thereby converting it to a year-round living space and essentially doubling the size of her apartment.
On April 15, 2002, the managing agent, J & C Lamb Management, on behalf of Gramercy Park, wrote to Ellman to inform her that her structure was illegal, and that she would have to dismantle it immediately. Among other things, Ellman's enclosed terrace was nestled against the building's oversized, 22-story smoke stack, a common area of the building. The bricks on the face of this were deteriorating, crumbling and falling off the surface. It was therefore critical that repairs be made quickly, both because of the dangers posed by the falling masonry and because it would be perilous for laborers to work high on the oversized exhaust stack during inclement winter weather.
Moreover, Gramercy Towers Owners Corporation, the owner of the adjoining building, was prepared to foot the bill for these repairs, because the inordinate height of the chimney had been an accommodation to its property, located at 4 Lexington Avenue. However, as a condition of paying for the work, Gramercy Towers obliged Gramercy Park to promptly supply access to the smoke stack. According to the engineers consulted by the two building owners, the work could be most safely and efficiently performed if a scaffold were built exactly where defendant's terrace was located. The plaintiff gave Ellman until the end of July 2002 to take down her structure so that the necessary scaffold could be erected.
Ellman responded to plaintiff's requests by writing letters to the board as well as to the agent, arguing that her enclosed terrace was legal, and insisting that it must at all costs be preserved as an incident of her lease. Ellman maintained that the legitimacy of her new all-weather "room" derived from her predecessor's construction, in 1984, of a Plexiglas sun shade, under which her apartment extension had been built.
Moreover, defendant interpreted a bill plaintiff sent to her on July 5, 1985, shortly before she moved in, demanding $29,300 to "cover the necessary cost to repair or replace the existing terrace" surface, as an authorization for her to construct an enclosure.
Finally, Ellman contended that the co-op had consented to her terrace construction because, when the work was being performed in February and March 2002, the superintendent of her building had been aware of it and had not forbidden it.
Following consultations with several attorneys, architects and engineers, Ellman proposed that it was the co-op's responsibility to design and pay for a scaffold that would allow repair of the chimney brick-face, while simultaneously protecting her enclosure. Ellman was emphatic that any damage to her enclosed terrace, or demolition and reconstruction, must be paid for by Gramercy Park. After the lawsuit began in August 2002, the court gave Ellman a full month to reach accommodation with the co-op, but no agreement was forthcoming.
Under the circumstances, the court granted the co-op's application in its entirety. In doing so, the court noted the following provisions in Ellman's proprietary lease:
"7. If the apartment includes a terrace, balcony, or a portion of the roof adjoining a penthouse, the Lessee shall have and enjoy the exclusive use of the terrace or balcony or that portion of the roof appurtenant to the penthouse, subject to the applicable provisions of this lease and to the use of the terrace, balcony or roof by the Lessor to the extent herein permitted.... No planting, fences, structures or lattices shall be erected or installed on the terraces, balconies, or roof of the building without the prior written approval of the Lessor.... Any planting or other structures erected by the Lessee or his predecessor in interest may be removed and restored by the Lessor at the expense of the Lessee for the purpose of repairs, upkeep or maintenance of the building.
"21. (a) The Lessee shall not, without first obtaining the written consent of the Lessor, ... make ... on any roof, penthouse, terrace or balcony appurtenant thereto, any alteration, enclosure or addition .... The performance by Lessee of any work in the apartment shall be in accordance with any applicable rules and regulations of the Lessor and governmental agencies having jurisdiction thereof. Alterations of the building or any unit must be made in full compliance with all building codes and related laws and are precluded from encroaching or impinging on public areas of the building."
The court observed that Ellman had constructed an illegal enclosure on the co-op's roof without troubling to obtain either the written consent of the co-op or a permit from the New York City Building authorities - in violation of paragraph 21 of her lease. The illegal structure impinged upon the chimney - a public area of the building - and was impeding the prompt, indeed urgent, repair of a potentially dangerous condition. Even if Ellman's new "room" did not constitute an obstruction, the co-op could require her to remove it as illegal and unauthorized. Moreover, even if defendant's structure were entirely legal, the co-op would have the right under paragraph 7 of the lease to require its removal at defendant's expense "for the purpose of repairs, upkeep or maintenance of the building."
The court cited CPLR Section 6301, which provides that
"[a] preliminary injunction may be granted in any action where it appears the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff's rights respecting the subject of the action, and tending to render the judgment ineffectual, or in any action where the plaintiff has demanded and would be entitled to a judgment restraining the defendant from the commission or continuance of an act, which, if committed or continued during the pendency of the action, would produce injury to the plaintiff."
Under the circumstances described above, the court held that the co-op had carried its burden of demonstrating its entitlement to injunctive relief in view of the fact that it has established (a) a reasonable probability of success on the merits; (b) the danger of irreparable injury in the absence of an injunction; and (c) a balancing of the equities in plaintiff's favor.
Accordingly, it appeared to the court that a cause of action existed in favor of the co-op and against Ellman, and that the co-op was entitled to injunctive relief on the ground that the co-op had demonstrated and would be entitled to a judgment restraining defendant from the commission or continuance of an act which, if committed or continued during lawsuit would produce injury to the co-op
As a result, the court issued the following orders:
(1) An undertaking be fixed in the sum of $250,000, conditioned that the co-op, if it was finally determined that it was not entitled to an injunction, will pay to Ellman all damages and costs which may be sustained by reason of the injunction.
(2) Ellman, her agents, servants, employees and all other persons acting under the supervision and/or direction of Ellman, were enjoined and restrained, during the lawsuit, from doing or suffering to be done, directly or through any attorney, agent, servant, employee, or other person under the supervision or control of defendant or otherwise, any act impeding access to the co-op, its agents, and representatives to the terrace areas abutting and surrounding cooperative apartment 18-F at the building.
(3) The co-op, its agents, and representatives were authorized to promptly dismantle the entire enclosed terrace structure (walls, roof, and all appurtenances) on the eastern side of Ellman's terrace between the brick wall encasing 18-F and the building's eastern edge.
(4) The co-op, its agents and representatives were authorized to expeditiously remove all such dismantled materials from the terrace level to the ground or street level, by whatever means and with the use of whatever safeguards the co-op, its managing agent and the workmen under its control or direction deemed appropriate, necessary or advisable in order to protect the health and safety of all persons concerned.
(5) The co-op and its agents and representatives were authorized to arrange for the immediate disposal of all such dismantled and removed materials by arrangement with a rubbish carting company or by such other means of disposal that they deemed appropriate under the circumstances, with due regard for the government rules and regulations applicable to such disposal.
(6) The co-op and its agents and/or representatives were authorized to bill Ellman for the dismantling, removal, and disposal work, consistent with the terms of the parties' proprietary lease, accompanied by copies of the supporting invoices and/or other records of charges and costs incurred in connection.
(7) The co-op, its agents and/or representatives were authorized to erect, cause to be erected, or permit to be erected at and over apartment 18-F's eastern terrace area a scaffold which would serve as protective cover and, if necessary, as a means of access to the exhaust stack work areas at or near the contiguous apartment building known as 4 Lexington Avenue, and owned by Gramercy Towers Owners Corp., for exhaust stack repair, replacement, and/or extension work.
(8) Ellman was directed to immediately and unconditionally grant to the co-op and/or its representatives all access they need, on an unimpeded basis, Monday through Friday, from 9 A.M. to 5:00 P.M., until completion of all of the exhaust stack work required to be done at or near the apartment 18-F terrace.
Comment: This was a victory for the co-op, which obtained all the relief it sought in light of the shareholder's intransigence to allow needed repairs. One must wonder what impelled this shareholder to resist legitimate board action. Perhaps poor legal advice?