                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: July 7, 2016                      522390
________________________________

LOCH SHELDRAKE BEACH AND
   TENNIS INC.,
                    Appellant,
      v                                     MEMORANDUM AND ORDER

HELEN AKULICH,
                    Respondent.
________________________________


Calendar Date:   May 23, 2016

Before:   Garry, J.P., Egan Jr., Lynch, Devine and Mulvey, JJ.

                             __________


      Drew, Davidoff & Edwards, Monticello (Alexander J. Wulwick,
New York City, of counsel), for appellant.

     Lisa Ornest, New York City, for respondent.

                             __________


Mulvey, J.

      Appeal from an order of the Supreme Court (LaBuda, J.),
entered October 28, 2015 in Sullivan County, which, among other
things, denied plaintiff's cross motion for, among other things,
summary judgment.

      Plaintiff is a domestic business corporation that
manages a private, seasonal bungalow community in the Town of
Fallsburg, Sullivan County. Defendant is a shareholder of
plaintiff and an occupant of one of the bungalows pursuant to a
proprietary lease. The lease requires plaintiff's approval prior
to any structural additions or alterations to a bungalow.
Defendant, without seeking permission from plaintiff, extended
her deck during the community's off-season. After defendant
refused to remove the deck extension, plaintiff commenced this
                              -2-                522390

action seeking a declaratory judgment that the deck extension was
in violation of plaintiff's rules and regulations, a permanent
injunction directing removal of the extension and counsel fees
pursuant to plaintiff's proprietary lease. Defendant answered
and, among other things, set forth counterclaims for
discrimination, intentional infliction of emotional distress and
defamation.

      Following discovery, defendant moved for leave to amend her
answer to add breach of fiduciary duty as an additional
counterclaim and for permission to join Carol Stock, a
shareholder and occupant of one of the bungalows, as a defendant
on the counterclaims or, in the alternative, to join Stock as a
third-party defendant. Plaintiff cross-moved for summary
judgment and dismissal of defendant's counterclaims. Supreme
Court granted defendant's motion to amend her answer and to serve
a third-party complaint on Stock and denied plaintiff's cross
motion without prejudice, concluding that a determination on such
cross motion would be premature. Plaintiff appeals.

      We agree with plaintiff that Supreme Court erred in
granting defendant leave to amend her answer to add breach of
fiduciary duty as an additional counterclaim. Leave to amend a
pleading "should be freely granted in the absence of prejudice or
surprise resulting from the delay except in situations where the
proposed amendment is wholly devoid of merit" (Edwards & Zuck,
P.C. v Cappelli Enters., Inc., 124 AD3d 181, 183 [2014] [internal
quotation marks and citation omitted]; see CPLR 3025 [b]; see
also Ferran v Williams, 281 AD2d 819, 820-821 [2001], lv
dismissed 97 NY2d 653 [2001]; Konrad v 136 E. 64th St. Corp., 246
AD2d 324, 325 [1998]). To prevail on a breach of fiduciary duty
claim, the cause of action must allege the existence of a
fiduciary relationship, misconduct by the individual board
members and damages directly caused by a board member's
misconduct (see Parekh v Cain, 96 AD3d 812, 816 [2012]; Konrad v
136 E. 64th St. Corp., 246 AD2d at 326), and it must be pleaded
with the requisite specificity under CPLR 3016 (h) (see Theaprin
Pharms., Inc. v Conway, 137 AD3d 1254, 1255 [2016]). Defendant's
proposed breach of fiduciary duty counterclaim states:
"Plaintiff's enforcement of the cooperative by-laws is
inconsistent. This malfeasance and nonfeasance includes but is
                              -3-                522390

not limited to enforcement of the [bylaws]," rules governing
board and shareholder meetings, and rules regarding shareholder
construction projects, and that "inconsistent enforcement has led
to this vindictive action against [her] and wasteful expenditures
of cooperative income." Defendant's proposed counterclaim is
insufficient as a matter of law because she acknowledges that
plaintiff – presumably via its board – was acting in its
corporate capacity and she does not ascribe independent tortious
conduct to any individual director (see Hoppe v Board of
Directors of 51-78 Owners Corp., 49 AD3d 477, 477 [2008];
Kravtsov v Thwaites Terrace House Owners Corp., 267 AD2d 154, 155
[1999]). Even assuming that she has been singled out for harmful
treatment, that treatment is not per se inconsistent with the
board's role in furthering its interests (see Matter of
Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530, 537-538
[1990]; Consumers Union of U.S., Inc. v State of New York, 5 NY3d
327, 360 [2005]).

      Next, Supreme Court should have denied defendant's motion
for leave to serve a third-party complaint on Stock. CPLR 1007
provides that "a defendant may proceed against a person not a
party who is or may be liable to that defendant for all or part
of the plaintiff's claim against that defendant" (see Sunbelt
Rentals, Inc. v Tempest Windows, Inc., 94 AD3d 1088, 1089
[2012]). The precept is that "the liability sought to be imposed
upon a third-party defendant must arise from or be conditioned
upon the liability asserted against the third-party plaintiff in
the main action" (Zurich Ins. Co. v White, 129 AD2d 388, 391
[1987] [internal quotation marks, emphasis and citation
omitted]). Here, defendant acknowledges that Stock was not a
board member during the relevant time period, but attempts to
hold Stock liable because Stock allegedly complained about
defendant's deck extension to the local building department and
to plaintiff. This allegation wholly fails to state a basis for
third-party liability against Stock arising out of the claims
asserted by plaintiff against defendant (see generally Qosina
Corp. v C & N Packaging, Inc., 96 AD3d 1032, 1034 [2012]; Rausch
v Garland, 88 AD2d 1021, 1022 [1982]).

      Turning to that part of plaintiff's cross motion seeking
summary judgment, a moving party is entitled to summary judgment
                              -4-                522390

where there are no triable issues of fact and where that party
makes a prima facie showing that it is entitled to a favorable
determination as a matter of law (see CPLR 3212 [b]; William J.
Jenack Estate Appraisers & Auctioneers, Inc. v Rabizadeh, 22 NY3d
470, 475 [2013]; Alvarez v Prospect Hosp., 68 NY2d 320, 324
[1986]; Andre v Pomeroy, 35 NY2d 361, 364 [1974]). The decisions
and actions of a residential cooperative board are reviewed under
the business judgment rule, "[s]o long as the board acts for the
purposes of the cooperative, within the scope of its authority
and in good faith" (Matter of Levandusky v One Fifth Ave. Apt.
Corp., 75 NY2d at 537-538; see 40 W. 67th St. v Pullman, 100 NY2d
147, 153-154 [2003]; Walden Woods Homeowners' Assn. v Friedman,
36 AD3d 691, 692 [2007]).

      In order for plaintiff to succeed on its cause of action
for a declaratory judgment and issuance of a permanent injunction
to require defendant to remove her deck extension, plaintiff must
demonstrate that the deck extension was unauthorized in violation
of the parties' previous agreement, and that the action by
plaintiff was authorized, made in good faith and in furtherance
of its legitimate interests (see Walden Woods Homeowners' Assn. v
Friedman, 36 AD3d at 692; Matter of Renauto v Board of Directors
of Valimar Homeowners Assn., Inc., 23 AD3d 564, 564 [2005];
Hidden Ridge At Kutsher's Country Club Homeowner's Assn. v
Chasin, 289 AD2d 652, 654 [2001]; see generally 40 W. 67th St. v
Pullman, 100 NY2d at 155-157). To that end, plaintiff submitted,
among other things, its proprietary lease, which states that a
shareholder "shall not, without the written consent of
[plaintiff], make any structural additions to or alterations in
the premises." Additionally submitted were excerpts from
plaintiff's shareholder's handbook, which refers to deck
alterations as "large scale" projects and states that
shareholders "must get permission from the board before beginning
any exterior alterations and additions, including but not limited
to: room/deck additions . . . [or] new decks." Indeed, it was
within plaintiff's scope of authority (via its board) to approve
such renovations pursuant to its proprietary lease and
shareholder's handbook since plaintiff's board has an obligation
"to promote the health, happiness, and peace of mind of the
majority of the unit owners" (Hidden Ridge At Kutsher's Country
Club Homeowner's Assn. v Chasin, 289 AD2d at 654 [internal
                              -5-                522390

quotation marks and citation omitted]), and the record
demonstrates that plaintiff's community values uniformity and
that plaintiff's legal action is in furtherance of that goal (see
Matter of Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d at 538;
Martino v Board of Mgrs. of Heron Pointe on Beach Condominium, 6
AD3d 505, 506 [2004]). There is no dispute that defendant
extended her deck by approximately three feet without first
obtaining the requisite approval from plaintiff and then refused
plaintiff's request to remove the offending portion of her deck.

      As plaintiff established its entitlement to summary
judgment, the burden then shifted to defendant to submit evidence
in admissible form showing the existence of any material issue of
fact (see Forest Hills Gardens Corp. v Evan, 12 AD3d 563, 564
[2004]; see generally O'Brien v Couch, 124 AD3d 975, 976 [2015]).
This defendant failed to do. Although defendant argued that
plaintiff was not entitled to rely on the business judgment rule
because it has treated her unfairly, she has failed to
demonstrate that plaintiff has pursued this action in bad faith,
and it is undisputed that plaintiff failed to remove the deck
extension after a formal request was made for its removal.
Defendant has also failed to offer any evidence of plaintiff's
ulterior motivation for instituting legal action against her or
evidence that plaintiff has failed to take adverse action against
other shareholders in similar circumstances (see Bregman v 111
Tenants Corp., 97 AD3d 75, 83-84 [2012]; Louis & Anne Abrons
Found. v 29 E. 64th St. Corp., 297 AD2d 258, 260-261 [2002];
Board of Mgrs. of Manhattan Val. Townhouses v Murovich, 273 AD2d
11, 11 [2000]; Cooper v 6 W. 20th St. Tenants Corp., 258 AD2d
362, 362 [1999]). Accordingly, plaintiff's cross motion for
summary judgment with respect to its cause of action for a
declaratory judgment and the issuance of a permanent injunction
should have been granted.

      As to that part of plaintiff's cross motion seeking
dismissal of defendant's counterclaims, we find that the
counterclaims fail to state a cause of action, are not supported
by the record and should have been dismissed. In deciding "a
motion to dismiss a claim for failure to state a cause of action,
the court must afford the complaint a liberal construction,
accept as true the allegations contained therein, accord the
                              -6-                522390

plaintiff the benefit of every favorable inference and determine
only whether the facts alleged fit within any cognizable legal
theory" (Bailey v Chernoff, 45 AD3d 1113, 1116 [2007] [internal
quotation marks and citations omitted]; see Leon v Martinez, 84
NY2d 83, 87-88 [1994]; Haire v Bonelli, 57 AD3d 1354, 1356
[2008]). Initially, defendant's counterclaim for discrimination
alleges that plaintiff's enforcement of its bylaws is
inconsistent, including enforcing rules with respect to
construction projects, and the purpose of this inconsistent
enforcement is to discriminate against defendant. To succeed on
an unlawful discrimination claim, defendant must first be a
member of a class protected by statute that affords her
protection (see Singh v State of N.Y. Off. of Real Prop. Servs.,
40 AD3d 1354, 1356 [2007]; Di Mascio v General Elec. Co., 27 AD3d
854, 855 [2006]). Since defendant has wholly failed to
demonstrate what protected status or statute provides her relief
from plaintiff's alleged "inconsistent enforcement" of its
bylaws, defendant's discrimination counterclaim should have been
dismissed.1

      Defendant's counterclaim alleging intentional infliction of
emotional distress also fails to state a cause of action. To
support such a claim, a party is "required to plead extreme and
outrageous conduct, the intentional or reckless nature of such
conduct, a causal relationship between the conduct and the
resulting injury, and severe emotional distress" (Hyman v
Schwartz, 127 AD3d 1281, 1283 [2015] [internal quotation marks
and citations omitted]; see Howell v New York Post Co., 81 NY2d
115, 121 [1993]). It is well settled that "the alleged conduct
must be 'so outrageous in character, and so extreme in degree, as
to go beyond all possible bounds of decency and be utterly
intolerable in a civilized community'" (Hyman v Schwartz, 127


    1
        In her brief, defendant contends, for the first time,
that she "is being discriminated against on the basis that she is
a divorced Russian woman whose boyfriend stays with her on the
weekends even though they are not married." Although the record
reflects that defendant is Russian, there is no indication in the
record that she has been discriminated against based on her
national origin.
                              -7-                522390

AD3d at 1284, quoting Murphy v American Home Prods. Corp., 58
NY2d 293, 303 [1983] [internal brackets and ellipsis omitted]).
Here, defendant merely alleges that "[m]embers of the b]oard have
engaged in an intentional, orchestrated campaign against [her] to
insult, demean, threaten and otherwise injure her . . . [and
this] has resulted in emotional injury." She points to her
deposition testimony in which she stated that members of the
board told her that they were going to have the building
inspector give her a fine every day for her violation and that
she would "be ruined financially" and "will [have to] spend
thousands and thousands of dollars to pay the fines until [she]
cut[s] the deck off." Defendant further stated that, "some
people at [the board] meeting . . . screamed and yelled at [her]
and . . . shook their hands over [her] head." Even assuming the
veracity of defendant's testimony, these allegations do not rise
to the level of being "so outrageous in character, and so extreme
in degree, as to go beyond all possible bounds of decency" (Hyman
v Schwartz, 127 AD3d at 1284; see Murphy v American Home Prods.
Corp., 58 NY2d at 303; Associates First Capital v Crabill, 51
AD3d 1186, 1188-1189 [2008], lv denied 11 NY3d 702 [2008]).

      We reach a similar conclusion with regard to defendant's
final counterclaim alleging defamation. "The elements of a cause
of action for defamation are a false statement, published without
privilege or authorization to a third party, constituting fault
as judged by, at a minimum, a negligence standard, and it must
either cause special harm or constitute defamation per se"
(Tattoos By Design, Inc. v Kowalski, 136 AD3d 1406, 1407 [2016]
[internal quotation marks and citation omitted], amended 138 AD3d
1515 [2016]; see Roche v Claverack Coop. Ins. Co., 59 AD3d 914,
916 [2009]). Defendant claims that plaintiff, at a shareholders
meeting, "broadcast false statements about [her] . . . calling
her immoral, saying that she was out to 'destroy the fabric of
the universe,' . . . [and] 'destroy everyone's summer,' and that
she was a '700 pound gorilla.'" These alleged defamatory
statements are insufficient to state a cause of action as they
are opinions and not facts (see Rosner v Amazon.com, 132 AD3d
835, 837 [2015], lv denied 26 NY3d 917 [2016]), and our inquiry
distills to whether a reasonable reader would believe whether the
statements were conveying facts about defendant (see Gentile v
Grand St. Med. Assoc., 79 AD3d 1351, 1353 [2010]). It is evident
                              -8-                522390

that the alleged statements were "intended to be invective
expressed in the form of heavy-handed and nonsensical humor"
(Wahrendorf v City of Oswego, 72 AD3d 1604, 1605 [2010]
[internal quotation marks and citations omitted]). To the extent
that defendant is attempting to allege special harm, the alleged
statements do not signal that defendant committed a serious
crime, and she does not allege that the statements relate to a
matter of significance and importance in her profession (see
Gentile v Grand St. Med. Assoc., 79 AD3d at 1354).

      Finally, with regard to plaintiff's request for counsel
fees, we note that each litigant is generally presumed
responsible for his or her own counsel fees, unless an award is
authorized by an agreement or a statute (see Matter of Kaczor v
Kaczor, 101 AD3d 1403, 1404 [2012]; Dupuis v 424 E. 77th Owners
Corp., 32 AD3d 720, 722 [2006]). Generally, proprietary lease
agreements containing a provision for counsel fees are
enforceable where a cooperative board or landlord has prevailed
in an action or proceeding (see Matter of Cohan v Board of
Directors of 700 Shore Rd. Waters Edge, Inc., 108 AD3d 697, 700
[2013]). Here, paragraph 48 of plaintiff's proprietary lease
states, in part: "If the Lessee shall at any time be in default
hereunder and the Lessor shall incur any expense . . . in
instituting any action or proceeding based on such default, or
defending, or asserting a counterclaim . . . [against the Lessee]
the expense thereof to the Lessor, including reasonable
attorney's fees and disbursements, shall be paid by the Lessee to
the Lessor on demand, as additional rent." Plaintiff commenced
this action only after defendant refused to remove the offending
portion of the deck and after defendant was afforded an
opportunity to avoid litigation. We find that plaintiff, as the
prevailing party, is entitled to recover counsel fees from
defendant (see Matter of Cohan v Board of Directors of 700 Shore
Rd. Waters Edge, Inc., 108 AD3d at 700; Huron Assoc., LLC v 210
E. 86th St. Corp., 18 AD3d 231, 232 [2005]; see generally Estate
of Del Terzo v 33 Fifth Ave. Owners Corp., 136 AD3d 486, 489-490
[2016]).

     Garry, J.P., Egan Jr., Lynch and Devine, JJ., concur.
                              -9-                  522390

      ORDERED that the order is reversed, on the law, with costs,
defendant's motion denied, plaintiff's cross motion granted,
summary judgment awarded to plaintiff, defendant's counterclaims
dismissed and matter remitted to the Supreme Court for a
determination of plaintiff's counsel fees.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
