Co-Ops—Business Judgment Rule—Court Dismisses Claim That Shareholders Violated Their Proprietary Leases by Permitting Subtenants (Daughter and Son-in-Law) to Use and/or Occupy Their Apartment While Not Concurrently Residing With Them—Statute of Limitations—Co-Op Allegedly Had Knowledge of the Subtenants’ Occupancy for 17 Years—Continuous Breach Theory Rejected
A cooperative corporation (petitioner) commenced a holdover proceeding against the respondent proprietary lessees (shareholders) and the shareholders’ daughter and son-in-law, alleging that the shareholders had “violated substantial obligations of the proprietary lease” (lease) “by permitting the undertenants” (subtenants) “to use and/or occupy [the subject apartment] while not concurrently residing with them” and that the shareholders have violated “the [lease] and house rules by permitting their dogs to bark incessantly, urinate upon other apartment doors, and roam unleashed through the seventh floor corridor of the building.” The shareholders and the subtenants (collectively “respondents”) moved for summary judgment dismissing the improper occupancy allegations on the grounds that such claim “is barred by the statute of limitations.”
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