Brodsky v. Board of Managers

1 Misc. 3d 591, 765 N.Y.S.2d 227, 2003 N.Y. Misc. LEXIS 1237
CourtNew York Supreme Court
DecidedAugust 27, 2003
StatusPublished
Cited by2 cases

This text of 1 Misc. 3d 591 (Brodsky v. Board of Managers) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brodsky v. Board of Managers, 1 Misc. 3d 591, 765 N.Y.S.2d 227, 2003 N.Y. Misc. LEXIS 1237 (N.Y. Super. Ct. 2003).

Opinion

[592]*592OPINION OF THE COURT

Michael V Ajello, J.

Petitioners Robert Brodsky and Remy Bernardo instituted this CPLR article 78 proceeding seeking, inter alia, to have them and one Denise Grant declared duly elected members of respondent Board of Managers of Dag Hammarskjold Tower Condominium and to compel the Board to hold a meeting of the unit owners for the purpose of conducting an election to fill the remaining six seats on said Board.

The election in question was held on June 24, 2003. For many years prior thereto, no election for Board members had been held at the annual meeting of the stockholders, evidently due to the failure to have a quorum present. It appears that none of the members serving on the Board prior to the June 24 meeting had been elected but had become members by a vote of the other members of the Board, pursuant to section 2.9 of the bylaws of the condominium.

The condominium was created as an unincorporated association pursuant to article 9-B of the Real Property Law (the Condominium Act) and has between 235 and 250 units (different figures were given by petitioner and respondents). Most of the units are owned by individuals but approximately 51 units are owned by corporations and foreign governments.

By notice dated December 20, 2002, the Board notified the unit owners that the cooling tower had to be replaced at a cost of approximately $600,000, major facade work was required at a cost of between $3,000,000 and $4,000,000, and that the Board had unanimously voted to levy a special assessment of $975,000 to be paid by all unit owners based on their share of percentage of common interest. The special assessment was due on January 15, 2003. The unit owners were further advised that effective February 1, 2003 all common charges would be increased by 20% and that the Board expected an additional special assessment for 2003 which was anticipated to be “somewhat higher” than the assessment due January 15, 2003.

Following receipt of notice of the assessment, a number of unit owners formed the Concerned Homeowners Group of the Dag Hammarskjold Tower Condominium and retained attorneys, who wrote the condominium’s attorney requesting that an annual meeting be called to conduct an election for the entire nine members of the Board. The Board refused to conduct an election for nine members but served notice that a meeting [593]*593would be held for the election of three members to fill the positions occupied by Phyliss Elstein, the Board president, George Avras, the vice-president, and Kathleen Garrett, alleging that under the staggered term provisions of the bylaws, those were the three positions scheduled for election in 2003.

The Concerned Homeowners formed a slate of three candidates (hereinafter Pro Slate) made up of petitioners and Denise Grant and solicited proxies for the Pro Slate. Two employees of the condominium’s managing agent and an associate of petitioner’s attorneys were appointed by the Board to serve as inspectors of election. The inspectors disallowed a number of Pro Slate proxies but nevertheless announced that a quorum had been achieved based on the attendance by unit owners either in person or by proxies which had been validated by the inspectors.

The following morning the inspectors met to tally the votes and determined that the Pro Slate had been elected. (Also voted on at the meeting were proposals to reduce the number of unit owners required to consent to borrow money and consent to borrow up to $1,000,000 for the facade project. These proposals were not approved by the unit owners.) Respondents Phyliss Elstein and George Avras observed the vote tally and objected to the validation by the inspectors of a number of Pro Slate proxies because the signatures of the unit owners had been acknowledged by a notary who was also a Pro Slate candidate.

On July 5, 2003, Denise Grant received an e-mail from Janet Roman, the account executive assigned to the condominium by the managing agent, informing her that on June 30, 2003 the Board had retained special counsel to review the entire election. Subsequent thereto, on July 11, 2003, petitioners’ attorneys received a letter from the special counsel-retained by the Board in which he stated that it appeared that there were an insufficient number of unit owners present at the meeting either in person or by proxy to have properly conducted the election. This conclusion was based on Pro Slate proxies for 61 units representing approximately 16.37% of the common interest being notarized by candidate Bernardo, and suspect notarizations on seven units representing approximately three percent of the common interest (it was later alleged that the suspect notarizations actually involved at least four proxies wherein the persons whose signatures had been acknowledged did not personally appear before the notary).

The letter from special counsel further indicated that the proxies submitted by entity unit owners of seven additional [594]*594units contained, defects in attorney opinion letters, corporate resolutions and certifications. (In 1997 the Board adopted a resolution requiring that signatures on all proxies of individuals be acknowledged and the proxies of all corporations or other entities must be accompanied by an acknowledgment of the signature of the designor of the proxy; an opinion rendered by a New York attorney that the entity was duly organized and in good standing; the identity of all directors, managers or officers of the entity and a certified copy of the resolution of the board of directors or other governing body of the entity authorizing the proxy. The resolution indicated that proxies had been submitted bearing designors’ signatures which appeared not to be authentic and it served the interests of the condominium to ensure that all proxies be properly designated by authentic signatures of designors.)

This article 78 proceeding was instituted following the refusal to recognize petitioners and Denise Grant as duly elected members of the Board.

I find that a quorum was present at the annual meeting and that all of the proxies with allegedly faulty acknowledgments were properly counted since acknowledgments were not required.

As a general rule, absent some statutory or bylaw provision, no special form is required for a proxy (Prince v Albin, 23 Misc 2d 194 [1960]). The issue we are confronted with is whether a board may require that a proxy be acknowledged when such a requirement is not contained in the bylaws. There appears to be only one case touching on that issue. In West v Board of Directors of Seward Park Hous. Corp. (Sup Ct, NY County, June 14, 2000, Miller, J., Index No. 602319/00), plaintiff challenged the entire proxy procedure to be used in an upcoming election for three directors. One of the requirements which the board had put into effect was notarization of any proxy that was mailed back to the honest ballot association, which was to supervise the election, prior to the election or submitted by one other than the signatory shareholder. It was alleged, as it is in the case at bar, that the motivation for requiring notarization was to insure the integrity of the voting process. Justice Miller evidently found no impediment to the board requiring notarization of the proxies.

Although respondents strongly rely on the West decision, I find it to be distinguishable from the case at bar. In West, the bylaws were completely silent as to voting by proxy. It has been [595]

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Bluebook (online)
1 Misc. 3d 591, 765 N.Y.S.2d 227, 2003 N.Y. Misc. LEXIS 1237, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brodsky-v-board-of-managers-nysupct-2003.