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Habitat Magazine October 2020 free digital issue

HABITAT

ARCHIVE ARTICLE

Marathon Legal Brawl Finally Headed to Court

When can a co-op or condo board enter an apartment to perform an inspection or repairs? And can such actions lead to a claim that the board has inflicted emotional distress on the apartment owner? These are just two of the questions raised by the latest motions in the marathon case of Salvator v. 55 Residents Corp.

The action was commenced after Scott Salvator discovered water damage and mold growth caused by an allegedly undersized drain on a landing outside his apartment. There was also a question about the legality of a laundry vent below his bedroom window.

Salvator claimed that the corporation trespassed when it entered his apartment to replace a portion of the floor. The co-op’s proprietary lease allows a board or its agents to enter an apartment for the purpose of making repairs, after sending the shareholder a notice by registered mail. Salvator claimed that because the board’s counsel sent a notice to Salvator’s attorney – and not to Salvator – entry into his apartment constituted a trespass.

The corporation explained, however, that since litigation was pending, its attorneys had an ethical obligation not to contact Salvator but to communicate directly with his attorney. Counsel for the corporation stated that there was no dispute that Salvator’s counsel received the notice (counsel even responded) or that the notice was sent at least 30 days prior to entry, as required by the lease.

Under those circumstances, the court found that the notice was reasonable. More to the point, the court explained that the corporation knew that the plaintiff did not reside in the apartment, and by sending the notice to counsel, the corporation was able to make sure Salvator received notice that the board’s agent would enter the apartment to make repairs. Thus, notice pursuant to the lease by registered mail was not required, and the trespass claim was dismissed.

Salvator wanted to amend his complaint to add a claim that the defendants are liable for intentional infliction of emotional distress. According to Salvator, the corporation’s engineering company informed the corporation that the laundry vent located below the apartment was illegal and should be removed. However, in order to support this claim, plaintiff would have to show “extreme and outrageous conduct” on the part of the corporation. The court concluded that, based on the facts alleged, plaintiff could not meet this standard, and the claim would not be permitted.

The court also dismissed the claims against the property manager, who was at all times acting as an agent for the corporation. Since the majority of the remaining claims were for breach of contract (that is, breach of the lease, which is a contract between plaintiff and the corporation), there was no basis to keep the managing agent in the case as a defendant.

Finally, Salvator’s suit for breach of contract was against the corporation and the board of directors, while his suit for breach of fiduciary duty was against only the board. Where there is already a breach of contract claim, a breach of fiduciary duty claim will not hold up if it is between the same parties based on the same facts. But here the court said that the claims were not duplicated because the fiduciary-duty claim was only against the board, and not the corporation, which is party to the proprietary lease and thus the proper defendant in a breach-of-contract claim.

 

Lesson Learned

The court’s ruling as to trespass is instructive. The court declined to adhere to form over substance. The decision’s implication is that had the corporation served the plaintiff in accordance with the proprietary lease – by registered mail to the apartment – the plaintiff never would have known that the corporation’s agent was going to enter the apartment, since he did not live there.

Also instructive is the court’s ruling on breach of fiduciary duty. By making the claim only against the board, the plaintiff was able to avoid having the claim dismissed. As to infliction of emotional distress, there was nothing to indicate that the corporation’s conduct was “outrageous.”

Now that the court has sorted out what appear to be the final pleading issues, it is anticipated that the case will go to trial – more than five years after it was commenced.

Attorneys

For the plaintiff: Harwood Reiff.

For the defendants: Sjoquist Bates Baer & Sedereas.

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