Tracy Peterson Obtains Dismissal of Cooperative Shareholder’s Challenge to Proprietary Lease Amendment

The plaintiff, the owner of a cooperative apartment with two terraces of which she has exclusive use, asserted several causes of action based on the premise that an amendment to the cooperative’s form proprietary lease provision concerning terrace maintenance obligations was invalid.  On appeal, the First Department reiterated its established precedent that a shareholder challenge to a cooperative board’s action must be made in the form of an Article 78 proceeding within four months after the determination to be reviewed becomes final and binding.  Here, the plaintiff waited well more than four months to assert her challenge.  As a result, the First Department reversed the denial of a motion to dismiss four causes of action challenging the proprietary lease amendment, holding them to be time-barred.  The First Department also dismissed fraud claims, holding them to be impermissibly “vague, conclusory and [not] pleaded with the specificity required,” as well as a claim for breach of the implied warranty of habitability because such a claim cannot lie for a period when the plaintiff was not living in the apartment and also cannot be based upon alleged independent harassment by a neighbor.

A copy of the appellate decision is accessible here.