Court Opinion

ID: 9821580
Source: CourtListenerOpinion
Date Created: 2023-09-01 08:14:00.62232+00
Date Added: 2024-06-11T07:38:53.371536
License: Public Domain

Friedman, J.P., and Saxe, J.,
dissent in a memorandum by Saxe, J., as follows: The decision of defendant cooperative corporation 33 Fifth Avenue Owners Corp. (the Coop) to withhold its consent to the transfer of the decedent’s shares and proprietary lease to both of her adult sons was not unreasonable. The proprietary lease at issue here does not absolutely require that in the event of a cooperator’s death, the Coop permit the assignment of the cooperator’s shares and lease to all applying family members, as long as one of them is financially responsible. Rather, the proprietary lease imposes on the Coop only the obligation that “consent shall not be unreasonably withheld to an assignment of the lease and shares to a financially responsible member of the Lessee’s family.” Because the Coop’s decision was not unreasonable, I would reverse the grant of plaintiffs’ motion for summary judgment, and would instead grant defendant’s motion for summary judgment dismissing the complaint.
Facts
Plaintiffs’ decedent, Helen Del Terzo, began residing at 33 Fifth Avenue, apartment 5C, with her husband, Robert Del Terzo, Sr., in 1955; in 1965, they began renting apartment 5D as well. In late 1985, the building was converted to cooperative ownership, and the couple obtained the appurtenant shares and proprietary lease for the combined apartment in 1986. Helen died on November 17, 2010, having been predeceased by her husband. At the time of Helen’s death, she resided in the apartment with her son Robert, Robert’s wife and their two sons, and her nephew Gregory Donio, all of whom continued to reside there after her death.
In November 2011, Helen’s two adult sons, plaintiffs Michael Del Terzo and Julius Robert Del Terzo (Robert), applied for the transfer of the apartment to them jointly. The application identified a total of eight proposed occupants: Michael, Robert, their wives and children, and their cousin. However, the employment, educational, and financial information in the application concerned only Michael, although Michael and his family were not going to primarily reside there; the application stated that Michael’s family would reside there two to eight *491days per month. Michael is a urologist with a practice in Pennsylvania, where he resides with his family. His income is approximately $500,000 per year, he has assets valued at $6,427,901, and a net worth of $5,890,115.
The Coop informed plaintiffs that it required Robert’s financial information as well, and plaintiffs’ follow-up application informed the Coop that Robert had $1,787 in cash and an annual income of approximately $48,000 — less than his annual expenses of about $76,000 — with the remainder of his assets consisting of his half share of the apartment itself, valued at $945,000, and the remainder of his mother’s estate, valued at $595,787. The application acknowledged that Robert “has not had meaningful earned income in recent years” and that his finances alone “would not appear to support the retention of the apartments,” but emphasized that his mother’s trust assets had supported his family’s living expenses, and that those assets remain available to them. Additionally, from the documentation Robert provided, the Coop learned that the address Robert and his wife used for purposes of filing federal tax returns was in Las Vegas, Nevada, a piece of information that called into question the bona fides of Robert’s proposed tenancy.
The Coop unanimously denied plaintiffs’ application, and directed plaintiffs to vacate the apartment within six months. Helen’s estate, along with Michael and Robert individually, then commenced this action.
The majority agrees with the motion court that the Coop’s rejection of plaintiffs’ application was unreasonable as a matter of law, since one of the two applicants was financially responsible, and, implicitly, since the lease’s prohibition against two or more families residing in one apartment is immaterial where that apartment is made up of two combined apartments. I disagree.
Paragraph 16 (b) of the proprietary lease provides that consent to an assignment “to a financially responsible member of the Lessee’s family,” “shall not be unreasonably withheld” (emphasis added). Importantly, the lease also prohibits more than one married couple from occupying the apartment without written consent.
The consent sought here was not for a “financially responsible” family member. It was for two adult family members, each of whom has his own family, but only one of whom the corporation considered to be financially responsible — and the intended present occupant was not the financially responsible family member. Moreover, the joint application sought approval for the possible future occupancy by both families. Thus, the *492Coop was being asked to do several things it had valid reasons to reject: one, to give present possession of the apartment to a family that lacked the requisite financial responsibility; two, to approve part ownership of the apartment by an individual who would not be residing there; and three, to authorize possible future shared possession by two families of what is now a single apartment — a single unit covered by a single lease.
It was certainly reasonable for the Coop to decline to give part ownership and possession of the apartment to a family lacking the financial ability to maintain it; that was the basis for the refusal to consent to a family member’s taking over possession of the apartment at issue in Gleckel v 49 W. 12 Tenants Corp. (52 AD3d 469 [2d Dept 2008]). Nor is that problem resolved by the joint ownership arrangement plaintiffs propose; rather, joint ownership in the manner proposed could create more potential complications.
Indeed, the reasonableness of the Coop’s concerns about the proposed joint ownership arrangement is illustrated by the conflict between the two brothers’ views or assumptions regarding future possession of the apartment. While the complaint asserts that when Michael and his family eventually returned to New York to live in the apartment, Robert and his family would vacate, Robert himself testified that “[t]here was never a discussion of one leaves and the other one comes in.” Any future disagreement between the two joint owners as to their rights to possession could undoubtedly entangle the Coop in the legal problems that could ensue.
The fact that the apartment was made up of what had at one time been two distinct apartments does not make it unreasonable for the Coop to treat it as the single apartment it has been for decades; the lease and shares are for one apartment. By directing the Coop to allow both brothers to become lessees, the majority creates a situation in which the Coop must allow two individuals with families to each acquire the right to occupy the entire apartment, and the Coop would be unable to limit occupancy by each family to just a portion of the apartment.
Further, the Coop may reasonably rely on its legitimate policy against nonresident owners, which provides an additional ground to deny the application, since at least one of the two owners would not be residing in the apartment for the foreseeable future.
All that is necessary to justify withholding consent is a reasonable basis for that denial. The Coop had several reasonable grounds to do so.