Robert D. Tierman, Litwin & Tierman and Salon, Marrow, Dyckman, Newman & Broudy

Litwin & Tierman and Salon, Marrow, Dyckman, Newman & Broudy, Partner

Robert D. Tierman

The client’s tale. The case I briefly recount here, for better or worse, is not mine. But it conveys a key lesson that many boards learn too late or too soon forget. While scanning recent co-op and condo court decisions, I noted a case between a Manhattan co-op and two shareholders with a caption that seemed quite familiar to one that first arose in the early 1990s in which a shareholder fought the board for years over a disputed air conditioner installation and related failure to pay maintenance. The case went on for years, and we practitioners in the field often refer to that case as a real-life Jarndyce v. Jarndyce, i.e., the case that would never end (Jarndyce v. Jarndyce, the fictional case that went on for 20 years, from Charles Dickens’s Bleak House).

I thought that real-life Jarndyce had finally ended five to ten years ago, and that, over twenty years later, this 2014 decision must reflect a new controversy between the parties. In fact, this decision involved the original controversy. Worse yet, the 2014 decision revealed the co-op continuing to incur substantial legal fees litigating mainly over legal fees, and the shareholders were now suing the co-op in a Suffolk County court, which shortly before had denied the co-op’s attempt to move the controversy back to the original Manhattan-based court. In fact, in its 2014 decision, that court confirmed that the Suffolk County court should now decide the remaining issues involving this Manhattan co-op controversy first arising over two decades ago.

The lawyer’s take. Seemingly routine disputes between co-op and condo boards and apartment owners should be treated with thoroughness and care from the outset, because you never know when a confluence of factors may turn such a dispute into an endless, expensive controversy. Boards must diligently enforce their contractual rights and house rules for the greater good of all apartment owners. But they also should do their best to resolve controversies before they escalate. The art in this is determining when to hold firm and when and how to bend, and there usually is no totally correct answer. Boards can maximize their chances of making the right decision at various stages of a controversy with good communication and analysis. That means board members talking thoroughly and directly to their professional advisers and taking the time to understand and analyze each particular situation.

Case closed. The management of many disputes is hard enough with perfect knowledge and wise decision-making. With anything less, the potential to perpetuate a 20-year legal morass is greatly enhanced.