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When do owners pay for damages?
AUTHORRichard D. Siegler and Dale J. Degenshein
May a shareholder recover money for the cost of painting and wallpapering where the finishes were disturbed by the co-op when it inspected the areas behind the walls of an apartment? It depends on the situation.
May a shareholder recover money for the cost of painting and wallpapering where the finishes were disturbed by the co-op when it inspected the areas behind the walls of the apartment? That was the issue in Baker v. Bay Terrace Co-op Section XII, a Queens County small claims court case.
The claimant, Rudolph Baker, resided in the co-op for more than 30 years. The co-op had been experiencing problems with its plumbing and the building had leaks, although Baker did not. However, in an attempt to locate the source, the co-op damaged his bathroom and performed defective repairs, making holes in the ceiling and walls in one of Baker’s bathrooms and destroying wallpaper in the other. The co-op hired a painter to plaster and prime the walls and ceilings, but refused to pay for any painting or application of wallpaper on the theory that those were “decorative” items for which Baker was responsible. Baker hired a contractor and spent $850 to do the work.
All shareholders, including Baker, signed an occupancy agreement where they agreed to follow the rules. Article 11 discussed repairs. It stated that the co-op “shall provide and pay for all necessary repairs, maintenance and replacements, except as specified by clause (a), an exemption that included: “any repairs or maintenance necessitated by [a shareholder’s] own negligence or misuse” and “any redecoration of [a shareholder’s] own dwelling unit.” According to the co-op’s offering statement, all painting was to be performed by the shareholder.
On December 10, 2007, the co-op issued a memo to all shareholders clarifying its policy concerning repairs. The memo was filed with the co-op’s rules and regulations and stated: “Article 11 of Occupancy Agreement for Bay Terrace Cooperative, Section XI I states the [shareholder] agrees to repair and maintain his dwelling unit at his own expense for any repairs or maintenance necessitated by his own negligence and misuse and any redecoration of his own dwelling. In the event of leaks caused by broken pipes or rain, the Cooperative is responsible for plaster walls and ceilings. The Cooperative will plaster and prime coat the walls and ceiling. However, painting is considered decorative and is the responsibility of the shareholder.”
The court said that this provision was critical to a determination of the case. The court discussed three issues in play: (1) Were the repairs necessitated by Baker’s negligence or misuse? (2) Was the co-op’s “exploratory work” to locate the origin of the leak an event caused by broken pipes or rain that would make it responsible for plastering walls and ceilings? (3) In the case of restoration required by “exploratory work,” is painting considered decorative?
The court discussed the legal implications. It found that a contract must be construed according to the expressed intent of the parties. Effect had to be given to the intent as indicated by the language used. Courts have determined that they must read the agreement as a whole and consider the entirety of the agreement in the context of the parties’ relationship. It was improper to cull distinct provisions from the agreement. The court discussed the long-standing rule that when the terms of a contract are clear and unambiguous, they must be read according to their terms.
When the court applied the legal principles to the facts, it determined that Baker’s repairs were not necessitated by his own negligence or misuse. It was undisputed that there were no leaks into his apartment and that the co-op’s plumber entered the apartment to do exploratory work in search of a leak. The leak was ultimately located on a corroded nipple in another apartment.
Courts have, when necessary, looked to the dictionary to determine the plain and ordinary meaning of words used in a contract. “Decorative” was defined as “serving to make something look more attractive or ornamental.” The court found that there was paint and wallpaper on the walls of Baker’s bathrooms before the co-op started its exploratory work. The paint and wallpaper would have remained unaffected if the co-op had not entered Baker’s apartment and he would not have incurred an expense but for the co-op’s work.
The court deemed it significant that the co-op came to Baker, not vice versa. The co-op damaged his bathrooms in pursuit of a solution for the entire building. The court found that the contract provisions in the occupancy agreement did not support the co-op’s defense. There was no provision for exploratory work or damages caused to a shareholder’s apartment by the co-op. Thus, the court found that the co-op was liable to Baker for $850.
Comment: As we have previously discussed, specific contract language is important and must be reviewed when determining the rights of a co-op and its shareholders. The occupancy agreement required the co-op to maintain the premises in good repair, except under certain circumstances. Those exceptions did not include the situation here – where the co-op required access in order to perform exploratory work to locate a building wide leak. The court did not directly address that portion of the memo attached to the co-op’s rules and regulations which stated that painting was decorative and the responsibility of the shareholder.
Because the court awarded Baker the full $850 he spent to paint and wallpaper, it is implicit that the co-op was responsible for the cost of restoring what Baker had in place prior to the exploratory work. This is an important consideration where a shareholder installs expensive finishings.
Accordingly, we recommend that boards review all their governing documents concerning responsibility for repairs and decorations if repairs need to be made through no fault of the apartment owner. If it is the building’s responsibility, it is important that the board understands the cost of restoring the decorations.
For Plaintiff: Pro Se
For Defendant: Schneider Mitola