In the vast majority of lawsuits, if one of the parties loses an argument on a motion, it appeals the decision. Thus, even before the final verdict of the court, there are decisions that are binding on the parties — and are often binding, as precedents, on others. And those decisions often contain valuable lessons.
Such is the case in Elango Medical PLLC v. Trump Palace Condominium and Trump Corp. It started innocently enough when Dr. Peggy-Rose Elango attempted to lease a condo unit in Trump Palace Condominium, which had been identified by the brokers as professional space. The unit had been previously used as a doctor’s office.
The proposal by Dr. Elango was accepted by the unit-owner, and they entered into a lease arrangement, which was subject to the approval of the board of managers. The rental application was completed and submitted to the Trump Corp. (“Trump”), the managing agent for the condo. A month later the board rejected the application, purportedly because the bylaws of the condo restricted the use of the unit to residential only. Claims were then made by Dr. Elango, an African American, against the condo and Trump for racial discrimination under city and state Human Rights Laws.
Dr. Elango claimed that at no time was she informed of the use restriction even though the listing agent, the unit-owner and Trump all knew of the use she intended. Further, the same unit was used as a medical office for more than 20 years before it became vacant.
Trump moved for dismissal of all claims even before a trial, claiming that Dr. Elango was rejected due to the use issue alone; that Trump did not make the decision and was acting solely as an agent for the board, which made the decision; and that the board had no idea who Dr. Elango was, since her application was rejected as soon as the board saw the proposed use on the first page.
Dr. Elango opposed the motion, which, if accepted, would have relieved the Trump Corp. from any responsibility or liability. She claimed that the reason for the rejection was racial discrimination. She also claimed that even if acting as managing agent, Trump could be held liable for discrimination, and that to dismiss the Trump Corp. before all of the facts were reviewed by the court was premature.
In fact, Dr. Elango submitted to the court Trump’s leasing procedures, which required applicants to submit color copies of their photo identification. Therefore, any claim that Trump and the board did not know that Dr. Elango was African American was dubious, at best.
The court held that Dr. Elango’s position had merit, and it rejected Trump’s motion to dismiss the claims. Trump immediately appealed the decision to the Appellate Division, First Department, which held that the lower court was correct in not dismissing the lawsuit. The appeals court emphasized that the required photograph of the applicant was enough to raise a question as to whether Trump was aware of Dr. Elango’s race. Further, the court noted that it was undisputed that the unit and two others in the condo were used as medical offices.
Though the decision of the appeals court did not address whether there was discrimination by Trump — the case is still pending — the decision here points out three very important points every co-op and condo board should be aware of. First, courts will often look at past acts of a board, and inconsistency is frowned upon. The board’s decision to allow other units to be used as medical offices could only lead a court to conclude that there must be another reason for a rejection of the current applicant. A mantra of all boards should be: “Be reasonable, and be consistent.” This golden rule will alleviate much pain — and avoid many lawsuits.
The second point is a simple piece of advice for avoiding charges of discrimination: Do not ask questions (or require things of an applicant) if it would elicit information that would lead you to know that they belong to a protected class. For example, do not ask an applicant’s age, since that may result in a claim that there was a rejection because the applicant was too old or too young. Do not ask if they will need any accommodations, because this is akin to asking: “Do you have a disability?” Do not ask the applicant’s religion or where they were born. None of these questions are relevant to whether they will be a good neighbor and pay their maintenance on time, and none of these questions can be asked on an application or at an interview. Likewise, requiring a photograph is wrong because it can elicit information that is inappropriate (and illegal) when making the admittance decision.
The final important point involves the Trump Corp.’s role. In asking the court to dismiss the claim, Trump took the position that it was only the agent of the condo board, and the board made the decision. The court seemed to be warning managers that if there is discrimination, they may be held culpable if they took an active role.
We do not know how the court will rule in this matter. However, given the two most important factors (the photo of the applicant and the prior use of the unit), it would be safe to say that the position of the condo board and Trump seems weak. The decisions of the court so far have taught a valuable lesson to boards that are wise enough to learn from the mistakes of others.
For Elango: Andrew S. Buzin, Buzin Law, P.C.
For the Trump Corp.: Magda L. Cruz, Belkin Burden Goldman LLP
Andrew P. Brucker is a partner at the law firm Armstrong Teasdale. The statements and views in this article are his own and not necessarily those of the firm.