Bd. of Mngers of Honto 88 Condo v. Red Apple Child Development Center

NEW YORK COUNTY
Contracts

New York Law Journal

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Justice Debra James

Red Apple Child Development Center is the owner of 22 condominium units in the building known as 88 Honto Condominium, in which it operated a school. These 22 units were originally designated as medical units until Red Apple converted them into the school. Board of Managers of Honto 88 Condominium sought foreclosure of Red Apple's units for nonpayment of its share of the common charges. Red Apple, while not denying that it has not paid the common charges, asserted that it was entitled to a set-off against such unpaid common charges of the part of the electrical service charges attributable to the common elements of the condo which, it claimed, was the obligation of the condo, which it paid. The court, among other things, granted plaintiff's motion to dismiss the defendant's affirmative defense alleging a breach of fiduciary duty. The court determined that although a condo board was held to be in a fiduciary relationship to the unit owners, Red Apple failed to allege that the actions taken by the board were not taken in good faith, in the exercise of honest judgment or in the furtherance of legitimate corporate purposes.

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