This was originally published on the SGR Blog.
A high-rise residential condominium community is a creature of statute, characterized by many unique features that both govern day-to-day affairs, on the one hand, while leading to disputes and litigation, on the other. So-called “common elements” are the responsibility of the board of managers to maintain and repair. But, as a recent case involving an improperly-pitched/leak-causing pipe between to units demonstrates, what constitutes a “common element” is often a controverted question of fact.
Lisa Goldberg sued the Madison Square Condominium and George Higgins for breach of fiduciary duty, negligence and trespass as a result of recurring leaks in her apartment. The leaks came from the apartment above, which was owned by board member Higgins and Ali Reza Momtaz. Supreme Court granted a motion to dismiss various claims in the complaint. Goldberg appealed.
The parties’ respective experts determined that the leak was caused by an improperly pitched pipe connected to Higgins and Momtaz’s toilet; a defective toilet flange connecting the building’s pipes to the toilet; and a defective seal around the base of the toilet at the floor. The improperly pitched pipe was repaired; the toilet replaced; and, after the seal around the base of the toilet was repaired, the leak did not recur.
Higgins’s expert determined that all three defective conditions constituted “common elements”. The appellate court found that determination to be arguably incorrect under the condominium declaration and bylaws. The description of the defective conditions, both inside the walls and within Higgins and Momtaz’s apartment, raised an issue of fact as to whether it was the board or Higgins and Momtaz who were ultimately responsible for the cause of the leak. In light of that, and in view of the evidence that they obstructed the board’s investigation, Higgins and Momtaz were not entitled to summary judgment dismissing the negligence claim as against them.
And the appellate court found that Higgins and the board were not entitled to the dismissal of the breach of fiduciary duty claim. The motion court acknowledged the evidence that Higgins refused access to his apartment while the board on which he sat was tasked with investigating the leaks in Goldberg’s apartment. And the motion court ruled that Higgins engaged in this conduct only in his individual capacity. However, the appellate court found that the distinction would extinguish any potential claim against a board member for breach of fiduciary duty based on self-interest or on tortious acts that were outside the scope of his or her duty as a board member but that impeded the board’s performance of its fiduciary obligations. Given Higgins’s admitted refusal to recuse himself from decisions that would affect the investigation, the record presented issues of fact whether Higgins placed his own personal interest in keeping the investigation out of his apartment over Goldberg’s interest in a timely investigation and repair of the leaks and whether the board took appropriate steps to insulate the investigation from Higgins’s self-interested involvement and intentional delays.
Supreme Court correctly dismissed the trespass claims for failure to show an affirmative act constituting or resulting in an intentional intrusion upon Goldberg’s property.