The Appellate Division of the Supreme Court of NY, first department recently issued a decision in the case of Goldstone v. Gracie Terrace Apt. Corp. This case took the form of a dispute between a condominium renter and the apartment building owner in a swanky Manhattan penthouse, similar in broad strokes to cases we have discussed before, but with different legal and contractual issues. Longtime readers may be starting to realize that disputes between owners and lessees of prime New York City real estate are an especially fertile and cutting-edge field for both attorneys and the Appellate Division.
Background of the Case
The plaintiff was a longtime lessee of a penthouse unit located on East 82nd Street. Unfortunately a 10,000 gallon water storage tank above her residence overflowed, causing flooding and the even more unfortunate growth of toxic mold. Toxic mold is an especially concerning problem as it can have a severe impact on the occupants’ health and can be quite difficult to eradicate.
Based on previous court decisions and other actions, it was clearly the defendant’s job to repair and renovate the apartment – that fact was not at issue in this case. What was at issue was the defendant’s actual plan to do the repairs.
Defendant’s architects proposed adding 2 inches of insulation to various walls of the unit to ensure they were waterproof in the event of future overflows. Plaintiff strongly objected to this plan, saying that this would cause two major problems. Problem one would be that the square footage of the apartment would be reduced by 50 square feet, a not inconsiderable amount in the abstract as Manhattan has some of the most expensive real estate in the world. Problem two would be that this plan would necessitate the reconfiguration of the interior of the apartment, including cabinets, doors, some interior walls, etc to ensure the unit was up to building code with the addition of the insulation.
Plaintiff thus filed for an injunction to prevent the defendant from doing any repair or renovation work on the apartment. An injunction is a remedy sought when monetary damages are not enough – the theory, in extremely oversimplified terms, is that certain harms are irreparable or severe enough that the court must exercise its authority and prevent them from happening via the issuance of a court order to prohibit certain conduct.
Analysis and Disposition
The court focused on whether or not the harm to the plaintiff, under the two theories mentioned above, would in fact be irreparable. Plaintiff placed a great deal of emphasis on the lease agreement – saying that it was a contract for the premises exactly as they were described at the time of signing, and that the renovation plan would thus be a breach of contract. The irreparable harm was the idea that having less living space than contracted for would be something that ordinary damages could not compensate.
The court disagreed. Like the lower court, they viewed the loss of 50 square feet in a 1400 square foot apartment as minimal. They felt that this loss of living space and the consequent reconfiguration of the apartment’s interior was exactly the kind of harm that could be compensated for with mere money – for instance by lowering the rent amount, maintenance fees, and making the apartment owners bear the cost of fitting new fixtures and furnishings comparable to the old ones. Another significant factor was that the plan that the plaintiff proposed would involve demolishing exterior walls, which would be prohibitively expensive and also would harm other tenants in the building. The court stuck to the contract-law basis of residential leases, and a central tenet of contract law is that the vast majority of damages may be compensated for with simple money.
If you’re involved with a dispute over a lease agreement or another situation with a condominium owner, please don’t hesitate to contact our office for a consultation.