CO-OP BOARD DISPUTE 158 CHAMBERS

In 2005, Dr. John Christopher Wirth, who has a practice at 225 Broadway, and his wife, Sylvie, bought the top-floor Unit 5 at 158 Chambers Street (above), which in the late 1970s had converted from commercial use to a residential cooperative. In the 19th century, the building  had been home to businesses as varied as stationer A. W. Law and the Mergentime & Lamm Union Extract Works, manufacturing chemists.

Over a century later, shareholder Paul Wallich made several alterations to the apartment, including the construction of a mezzanine and a skylight (below), which affected the fifth-floor hallway leading to the roof, where there was an outdoor deck. The alterations, though unapproved, were sound, and an updated certificate of occupancy was issued in December 2004.

The following month, the co-op board consented to the sale of the apartment so long as Wallich left "a sufficient escrow to deal with his improper alteration of the hallway owned by the co-op, leading to the roof. The amount shall be sufficient to restore, change or alter the hallway to the satisfaction of the co-op and" to its architect / engineer, John Daniel Nakrosis, Jr.

Following closing, Wallich placed $20,000 in escrow — $10,000 to fix the hallway and $10,000 for the installation of a riser. All of this was to be completed within 90 days of the agreement, which was dated March 3, 2005. Dr. Wirth, like each of the other four owners in the five-loft building, became a board member.

Here's where it gets tricky. According to the court in Wirth v. Chambers-Greenwich Tenants Corporation, the Wirths agreed not to permit use of the roof until certain additional protective measures were undertaken, which were to be pre-approved by both the co-op and the co-op's engineer at the Wirth's expense. But the doctor didn't do that. Instead — Hubris #1 — the couple laid Astroturf on the roof without seeking board approval, and placed furniture and entertained guests there without installing carry treads or taking other protective measures to protect the delicate roof membrane.

The Wirths, in turn, objected to the board wanting to alter the stairwell bulkhead, which was not a part of the architect / engineer's findings that all had agreed to — and which would cause them to lose about 15 square feet of roof space, "constituting a taking of their property to which they did not consent." Board member Wendy Klaus, a choreographer and dance teacher who owns the Ballets with a Twist children's dance studio on the third floor, where she also lives, testified that the extension of the bulkhead to install a landing at the top of the stairs was needed for safety reasons — even though the city had issued a certificate of occupancy without it. Hubris #2.

The Incredible Bulkhead

Because they refused to consent to the expansion of the bulkhead and to the release of escrow funds to do so, the Wirths alleged that the board singled them out for harmful treatment: refusing to approve the couple's alteration plans for the apartment itself, removing Dr. Wirth from the board in February 2007 when, said Wirth, he was removed without cause at a special shareholders' meeting at which the co-op's bylaws were amended to reduce the number of directors from five to four.

Enough, apparently, was enough, and shortly thereafter the Wirths put the apartment up for sale, receiving a $1,485,000 offer from one Chris Hoffman. He withdrew the offer a month or two later after he learned of the problems between the Wirths and the board, and because the board had told him — erroneously as it later turned out — that under law the building could only be used as joint living-work quarters for artists (JAR) certified by the City Department of Cultural Affairs.

In October 2007, the Wirths then entered into a contract for the same amount with one Timothy Merrel. The sale was conditioned upon the resolution of the dispute between the Wirths and the co-op board. The following month, the board said it would not allow the sale until certain conditions were met, including the resolution of the roof dispute and getting assurance from the Wirths that Merrel had been informed of the JAR requirement. In July 2008, Merrel backed out.

In response, the Wirths took the co-op and board members Klaus, Janet Checkman, Jean Louis Gezauby and Stephen Gaboury to court.

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