Upon the foregoing papers, plaintiffs Lisa Aguilera del Puerto, Fernando J. del Puerto and Julia Aguilera move, pursuant to CPLR 3212, for an order granting them summary judgment on their second cause of action for breach of fiduciary duty on the ground that the subject defendant cooperative board and board members violated their fiduciary duty to plaintiffs by failing to treat them "fairly and evenly" in comparison to other similarly situated cooperative shareholders. Defendants Port Royal Owner's Corp., Kathleen Sagona, James P. Kelly, Eric Lehmann, Philip Micklaus, Alan J. Huber, Esther Ruiz, Paula Cappelluzzo, Ann Del Guercio and Wendy Burrell Mintzer (collectively the Board defendants) oppose the plaintiffs' instant motion on the ground that the plaintiffs lack standing to bring the instant action and that, in any event, the complained-of decisions made by the Board defendants are insulated from judicial scrutiny by the "business judgment rule."

The Board defendants also cross-move, pursuant to CPLR 3212, for an order granting summary judgment dismissing the complaint as against them on the ground that there are no triable issues of fact and the Board defendants are entitled to judgment as a matter of law dismissing plaintiffs' causes of action for breach of fiduciary duty, tortious interference with contract and fraud. In addition, defendants Jack Olivero and Miriam Olivero (the Oliveros) also cross-move, pursuant to CPLR 3212, for summary judgment on the ground that they were bona fide purchasers of the subject cooperative unit and the plaintiffs have failed to adduce any evidence, other than speculation and surmise, that the Oliveros either tortiously interfered with the subject contract or are liable for fraud with respect to same. Plaintiffs oppose both cross motions on the ground that triable issues of fact exist which preclude the grant of summary [*2]judgment

The Plaintiffs' Motion for Partial Summary Judgment - Breach of Fiduciary Duty and The Board Defendants Cross Motion for Summary Judgment as to all Claims

The instant action stems from the plaintiffs' failed attempt to purchase an additional unit at defendant Port Royal Owner's Corp., a cooperative corporation. The subject cooperative operates a residential vacation property located in Montauk, New York. Lisa Aguilero del Puerto (Ms. del Puerto) and her mother Julia Aguilero (Ms. Aguilero) jointly own the shares allocated to Unit 117 at the cooperative. Fernando J. Del Puerto is the husband of Ms. del Puerto.

In their complaint, the plaintiffs allege that in October 2001 they entered into a contract of sale with another shareholder, Rita Toole (Ms. Toole), to purchase Unit 217 in the subject co-operative. A purchase price of $55,000 was negotiated. In or about November 2001, Kathleen Sagona (Ms. Sagona), a member of the Board of Directors of the cooperative (the Board) and a defendant herein, allegedly informed Ms. del Puerto that the Board would waive the application fee for sale of Unit 217 and would be "thrilled" if plaintiffs purchased said unit. Ms. Sagona allegedly told Ms. del Puerto that the Board had previously waived the application fee for Luis Miranda, a shareholder who had purchased another unit in the co-operative. Ms. del Puerto allegedly informed Ms. Sagona that she and her husband needed to purchase the additional unit because they were planning a family and needed extra space. Ms. del Puerto also allegedly told Ms. Sagona that plaintiffs planned to sell Unit 117 once they purchased Unit 217 and had a buyer for Unit 117 "lined up."

On November 13, 2001, the plaintiffs mailed their application seeking Board approval of the purchase of Unit 217. Plaintiffs aver that on November 24, 2001, Ms. Aguilera witnessed a couple enter unit 217 even though such unit was under contract to the plaintiffs. Ms. Toole confirmed to Ms. Aguilera that no one was authorized to be in the unit. Mr. Arturo Salazar, a guest of then shareholder Julien Rivera, informed Ms. Aguilera that he had witnessed Board member and defendant Esther Ruiz (Ms. Ruiz) inform Mr. Rivera that she had shown Unit 217 to the Oliveros.Plaintiffs allege that Ms. Ruiz did not have authority from Ms. Toole to show the apartment.

On or about November 25, 2001, Ms. del Puerto allegedly spoke with Ms. Sagona regarding the status of plaintiffs' application and was told that not all of the Board members had received a copy. Thereafter, on December 2, 2001, Ms. Sagona sent a letter to plaintiffs requesting more information with respect to financing for the purchase of Unit 217, as well as the submission of an application fee.

On December 3, 2001, Ms. del Puerto allegedly spoke with Ms. Sagona via telephone regarding the pending application and her concerns that the unit was being shown to other prospective buyers. Plaintiffs aver that Ms. Sagona was "hostile" during this conversation, accused Ms. del Puerto of "blackmail" and hurled insults at her. During the conversation, they also discussed issues pertaining to the refinancing of the cooperative, an issue they had discussed previously, and Ms. del Puerto allegedly told Ms. Sagona that she could not discuss such refinancing until after the impending holidays.On December 6, 2001, plaintiffs sent the Board the application fee and financial documents it had requested. By letter dated December 12, 2001, the Board rejected plaintiffs' application. Plaintiffs claim that such rejection occurred even though they were financially qualified to purchase the unit in question by reason of their [*3]combined income of $300,000 plus "substantial equity in Unit 117 and other assets." Plaintiffs also allege that the Oliveros were interviewed by the Board on January 5, 2002, despite not yet having signed a contract for the subject unit, and thereafter purchased the unit for $55,000.

Plaintiffs also aver that either Ms. Ruiz or her boyfriend Jean-Pierre Kerr ( Mr. Kerr) received a payment of $5,000 from the Oliveros, even though Mr. Kerr is not a licensed real estate broker and would not have been eligible for such a fee if plaintiffs had purchased the subject unit. Allegedly, Ms. Ruiz and Mr. Kerr had been evicted from their home and were in "dire straits" financially. Plaintiffs also aver that Mr. Kerr had found a buyer for Ms. Sagona's apartment, thereby facilitating the sale of same and allowing her to purchase another unit in the cooperative.

With respect to the sale of the subject unit to the Oliveros, their application to purchase was approved on or about February 4, 2002 and Ms. Toole signed a notice of intention to sell and the assignment and assumption of lease on February 15, 2002. Plaintiffs allege that the Oliveros demanded that certain repairs be made subsequent to entering into the contract with Ms. Toole and, in response, Ms. Toole threatened to terminate the deal. Thereafter, allegedly a Board member informed Ms. Toole's attorney that Ms. Toole was to continue with the sale of the unit to the Oliveros or else they would not approve any other purchaser she found or interview any prospective purchasers for three months.The Board also allegedly stated that they would require her to repair the bathroom floor of the unit and fine her for renting the unit. Ms. Toole allegedly informed Ms. del Puerto that she was forced to accede to the Board's demands as she "could not afford a legal fight."

Plaintiffs further allege that on October 13, 2002, Ms. Aguilera learned that Ms. Sagona had informed Frenie Ruberto (Ms. Ruberto), another shareholder, that the Board charged the application fee and denied the plaintiffs' application in order to "teach Ms. del Puerto a lesson." The plaintiffs aver that the denial of their application constituted retaliation for Ms. del Puerto's opposition, in May 2001, to a proposed dog ban at the cooperative, which, contrary to the wishes of Ms. Sagona, allegedly led to the "grand fathering" in of all pets currently owned by the shareholders.

In addition, Ms. Sagona allegedly told Ms. del Puerto at a Board meeting that her application had been denied because Ms. del Puerto had tried to bribe the cooperative into allowing her to purchase unit 217. Specifically, Ms. Sagona allegedly stated that the "bribe" in question consisted of Mr. del Puerto refusing to provide free legal services regarding the refinancing of the cooperative's mortgage unless the plaintiffs' application was approved.

Thereafter, plaintiffs commenced the instant action seeking damages based upon breach of fiduciary duty, fraud and tortious interference with contract. In the instant motion, they seek a grant of partial summary judgment with respect to their breach of fiduciary duty claim on the ground that the Board failed to treat them "fairly and evenly" in relation to other shareholders who purchased other or additional units in the co-operative.

In support of their motion for partial summary judgment on the breach of fiduciary duty claim, plaintiffs argue that the Board failed to treat them "fairly and evenly" by: (1) rejecting their application to purchase a second unit even though no other shareholder had ever been rejected with respect to such purchase; (2) failing to interview plaintiffs in conjunction with their application although all other shareholders were interviewed; (3) approving applicants who had worse debt to income ratios than the plaintiffs; (4) allowing at least one shareholder whose application was deemed deficient to cure the subject deficiency but failing to afford plaintiffs the [*4]same opportunity; and (5) approving applications it only could produce in incomplete form despite requiring a completed application from plaintiffs. Moreover, plaintiffs' claim that two of the four reasons cited by the Board in support of the rejection of plaintiffs' application did not appear in plaintiffs' credit reports.

In addition, plaintiffs contend that the Board pressured Ms. Toole into selling the subject unit to the Oliveros in February 2002 by misrepresenting that if she didn't complete the sale, the Board would not be meeting for three or four months and thus would not approve any one else during that time. Plaintiff maintains that contrary to the Board's statements, it actually did hold meetings in February, March and April 2002. Plaintiffs argue that the Board engaged in such disparate treatment and otherwise improper conduct in order to deny the plaintiffs' application and, instead, approve the sale of the subject unit to the Oliveros, who were allegedly long time friends of Ms. Ruiz. Such denial was allegedly prompted by Ms. del Puerto's opposition to the proposed pet ban at the cooperative as well as personal animosity directed against plaintiffs by members of the Board with regard to, inter alia, Ms. del Puerto's involvement in the proposed refinancing of the cooperative and Ms. Aguilera's support of a past president of the Board which allegedly disrupted her relationship with Ms. Ruiz. Accordingly, plaintiffs argue that the Board defendants violated their fiduciary duty to plaintiffs by failing to treat them "fairly and evenly" with respect to their purchase application.

In support of their motion, plaintiffs submit evidence that three other shareholders had higher income-to-debt ratios and were nonetheless approved to purchase additional units at the co-operative.^[FN1] Specifically, defendant Paula Cappelluzzo had a 49% debt-to-income ratio, defendant Sagona had a 40% debt-to-income ration and shareholder Ms. King had a 71% debt-to-income ratio. Plaintiffs had a 32% debt-to-income ratio. Ms. King submits an affidavit which states the following with regard to her purchase of an additional unit; "I formerly owned the shares allocated to Unit 202 [at the cooperative] and currently own the shares allocated to Unit 225. * * * I purchased the shares allocated to Unit 225 in or around August 2000 for $124,200. After submitting my purchase application, I was interviewed by [the Board]. During the interview [defendant Sagona] informed me that the income reported on my application was not sufficient and that in order for the Board to approve my application someone would have to guarantee my maintenance payments and that I would be required to escrow 8 months of payments until I sold Unit 202. I agreed to these terms (my daughter . . . became my guarantor) so that I could purchase 225. No such terms were required of me when I previously purchased Unit 202."

Plaintiffs also submit the deposition testimony of shareholder Ms. Ruberto concerning the alleged "personal animosity" of some Board members toward plaintiffs

and the alleged payment by the Oliveros to defendant Mr. Kerr, the boyfriend of defendant Ms. [*5]Ruiz, of a $5,000 finder's fee with respect to Unit 217. Ms. Ruberto testified that Mr. Kerr told her and her husband, in the presence of defendants Ms. Ruiz and Ann del Guercio, that Ms. Sagona had said that she was not going to approve plaintiffs' purchase of Unit 217 due to Ms. del Puerto's opposition to the pet ban. Ms. Ruberto also stated that she assumed Mr. Kerr had obtained a finder's fee for Unit 217 because he was able to obtain a security deposit for a new apartment despite financial difficulties he and Ms. Ruiz had been facing. She further testified that Ms. King had informed her that Mr. Kerr had received a finder's fee from her with regard to a unit she had purchased at the cooperative.

In opposition to plaintiffs' motion for partial summary judgment, the Board defendants argue that plaintiffs lack standing to assert a cause of action for breach of fiduciary duty because the plaintiffs' status in the instant action is that of prospective purchasers as opposed to shareholders. In addition, the Board defendants argue that its decision to deny the plaintiffs' application is insulated from judicial review pursuant to the "business judgment rule."

With respect to their cross motion, the Board defendants contend that there is no evidence that the Board interfered in the subject contract of sale for Unit 217 and, in any event, since the decision to deny plaintiffs application is protected by the business judgment rule, a cause of action for tortious interference with contract premised upon such denial cannot stand. With respect to the plaintiffs' breach of fiduciary duty claim, the Board defendants maintain that the decision to deny plaintiffs' application was based on the totality of the financial information provided to the Board by plaintiffs, and the Board did not treat plaintiffs' application differently than it did the applications of other cooperative shareholders. Finally, the Board defendants argue that the plaintiffs' fraud cause of action must also fail as the plaintiffs have not identified any misrepresentations made to them by the Board upon which they relied to their detriment.

In opposition to plaintiffs' motion and in support of their own cross motion, the Board defendants submit the deposition testimony of Ms. Sagona, Mr. Lehmann and Ms. Ruiz with respect to the Board's decision to deny the plaintiffs' application. Ms. Sagona testified that the plaintiffs' application was denied due to deficient credit information, insufficient income verification and the plaintiffs' record as shareholders. She also testified that the income Ms. del Puerto stated on her application was greater than the support she gave for such figure.

At his deposition, Mr. Lehmann specified the nature of such deficiencies as follows:

There were dozens and dozens of reasons [the plaintiffs' financials were deficient for application purposes]. They had very little income coming in as far as their debt to income ratio. They had - - their tax return for 2000 claimed 115 and change thousand. [Ms. del Puerto] had made only $13,000 in her business that year gross receipts. [Mr. del Puerto] had two jobs making 48,000 on one and 50 something thousand or roughly in those numbers on the other two, on two separate jobs. I don't know if they were at the same time or if he was holding two jobs down to make that kind of money or if it was start one and stop the other one, but together their combined income was only $115,000. They were $550,000 in debt. They had 31 claims - - 31 not claims, what's the word, inquiries,

31 inquiries in a twelve month period [on their] credit report. On their credit report there were 31 statements inquiries . . . . They had 22 credit cards. [Ms. Aguilera] had multiple . . . deficiencies. In other words . . . if you look at the notes the credit report gives you, it's things like bad debt to income ratios [and] too many credit cards open. [These credit delinquencies were] mainly for [Ms. del Puerto] and [Ms. Aguilera]. [Ms. Aguilera] had more delinquencies [*6]than [Ms. del Puerto]. [Ms. del Puerto's] main delinquenc[y] was Wells Fargo Bank. There were three of them that I remember and [Ms. Aguilera] had a tremendous amount, so these were, when you add all of those up, I was protecting 56 other shareholders from a possible debt problem, a possible in arrears. I don't remember the amount, but I remember at a board meeting discussing that [Ms. Aguilera] was in arrears within the last . . . six or twelve or eighteen months . . . . I don't know the exact time frame, but they had been in arrears a long time. It might have been consecutive, but it was so long age I don't remember at this point.

[T]here was [another] major issue. They were borrowing money from . . . a friend or an associate, a shylock, I don't know what his relationship to the whole situation was, and supposedly it was for interest only because they wanted to speed up the application process, which I just purchased another house and had a mortgage inside two weeks, so I don't know what they were speeding up by not getting it. The only thing I could see is that they couldn't get a mortgage with 31 inquiries against them and that's why they had to borrow the money privately and they were going to pay 299 [dollars] and change a month for interest only and from there they were going to seek other . . . financial means or whatever, some type of mortgage . . .and we had no - - we had no information on this guy. We had an application that wasn't . . . a mortgage, a lending agreement that wasn't signed. There was pretty much a typed piece of paper with no signature on it [and [t]here was a clause in [the lending agreement] that stated that he became the shareholder in the event [the plaintiffs] defaulted. Now we had no information on him whatsoever. His name was not on the application. His name was not on the first thing we sent out, the contract and the application, and he would have bec[o]me our shareholder and what if he had bad credentials or what if he didn't want to pay us maintenance? I could not do that to the other 56 shareholders. It's not . . . right. My fiduciary responsibility is to take care of 56 other people . . . .

Defendant Ruiz also stated at her deposition that plaintiffs had an unfavorable debt-to-income ratio and that the large amount of debt carried by plaintiffs concerned the Board with respect to their application to purchase an additional unit.

The Board defendants also submit the deposition testimony of Ms. del Puerto wherein she affirms that her joint credit report with Mr. del Puerto indicated, inter alia, that their proportion of revolving balance to revolving credit was too high, they had too many bank or national revolving accounts, their proportion of loan balance to loan amount was too high and they had too many accounts with balances. Other factors noted on the credit report with respect to the del Puertos' credit history were "level of delinquency on accounts, length of time accounts have been established, amount owed on account is too high and too many inquiries within the last 12 months." Ms. del Puerto also testified that although plaintiffs hoped to sell Unit 117 in April 2002, they did not officially sell it to anybody or begin negotiations with regard to such sale. At her deposition, Ms. Aguilera stated that she had an American Express account submitted to a collection agency and multiple delinquencies with respect to credit card payments. Ms. Aguilera also testified that she was in arrears with respect o maintenance [*7]payments for Unit 117 on at least five occasions in 1999 and 2000.

The Board defendants further submit additional deposition testimony by Ms. Ruberto wherein she states that Mr. Kerr and Ms. Ruiz told her that the plaintiffs were not going to be approved by the Board to purchase Unit 217 due to their financial deficiencies.

With respect to Ms. King, the Board defendants submit the deposition testimony of defendants Ms. Sagona and Eric Lehmann (Mr. Lehmann), wherein they state that at the time of her purchase application, she owned Unit 202 free and clear of any mortgage, her daughter co-signed her purchase application and it was Ms. King who suggested to the Board that her daughter become a guarantor for the purchase of Unit 225 in order to cure the financial deficiency identified by the Board.

Summary judgment should only be granted where there are no triable issues of fact (Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]). In order to prevail on a motion for summary judgment, the movant must present a prima facie case demonstrating entitlement to judgment as a matter of law (Prince v Di Benedetto, 189 AD2d 757, 759 [1993]; Zarr v Piccio, 180 AD2d 734, 735 [1992]). Once the movant has established its prima facie case, the party opposing a motion for summary judgment bears the burden of "produc[ing] evidentiary proof in admissible form sufficient to require a trial of material questions of fact . . . mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient" (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; see also Romano v St. Vincent's Medical Center of Richmond, 178 AD2d 467, 470 [1991]; Tessier v New York City Health & Hospitals Corp., 177 AD2d 626 [1991]). The evidence presented on summary judgment must be scrutinized in the light most favorable to the party opposing the motion (Goldstein v Monroe County, 77 AD2d 232, 236 [1980]). Since summary judgment deprives a party of his or her day in court (Henderson v City of New York, 178 AD2d 129 [1991]), it is a drastic remedy that will only be awarded when there is no triable issue of fact and the court can render a decision as a matter of law (Barclay v Denckla, 182 AD2d 658 [1992]). However, the opponent of a motion for summary judgment "must establish the existence of material facts of sufficient import to create a triable issue" and resort to mere "surmise, conjecture or suspicion" in order to defeat said motion will not suffice (Shaw v Time-Life Rcords, , 38 NY2d 201, 207 [1975]).

Here, the Board defendants are entitled to summary judgment dismissing the plaintiffs' complaint as against them. As an initial matter, the court finds that the business judgment rule applies to the Board's decision to deny the plaintiffs' application to purchase an additional cooperative unit. "Under the business judgment rule, which applies to the directors of residential cooperative corporations . . . absent a showing of discrimination, self-dealing or misconduct by board members, corporate directors are presumed to be acting in good faith and in the exercise of honest judgment in the lawful and legitimate furtherance of corporate purposes'" (Jones v Surrey Cooperative Apartments, Inc., 263 AD2d 33, 36 [1999], quoting Auerbach v Bennett, 47 NY2d 619, 629 [1979 ]). Accordingly, "[s]o long as the board acts for the purposes of the cooperative, within the scope of its authority and in good faith, courts will not substitute their judgment for the board's. Stated somewhat differently, unless a resident challenging the board's action is able to demonstrate a breach of this duty, judicial review is not available" (Matter of Levandusky v One Fifth Avenue Apartment Corp., 75 NY2d 530, 538 [1990]).

Accordingly, in determining whether a cooperative board unreasonably withheld its [*8]consent to a transfer of shares, "it is the business judgment rule, not the court's independent assessment of the reasonableness of the decision, that provides the proper standard of review" (Barbour v Knecht, 296 AD2d 218, 224 [2002]). It is similarly well settled, however, that "[t]he business judgment rule is not an insuperable barrier [but instead] permits review of improper decisions, as when the challenger demonstrates that the board's action . . . deliberately singles out individuals for harmful treatment'" (id., quoting Levandusky, 75 NY2d at 540). Given a board's duty to treat all shareholders "fairly and evenly," a substantiated showing of the unequal treatment of shareholders by the subject board is sufficient to overcome the application of the business judgment rule (see Buttita v Greenwich House Cooperative Apartments, Inc., 11 AD3d 250, 251 [2002]; Louis and Anne Abrons Foundation, Inc. v 29 Est 64th Street Corp., 297 AD2d 258, 260 [2002]; Barbour v Knecht, 296 AD2d at 219; Smolinsky v 46 Rampasture Owners, Inc., 230 AD2d 620, 621 [1996]; Ackerman v 305 East 40th Owners Corp., 189 AD2d 665, 667 [1993]; Aronson v Crane, 145 AD2d 455, 456 [1988]; Cohen v Seward Park Housing Corp., 7 Misc 3d 1015 [A][2005]; Axelrod v 400 Owners Corp., 189 Misc 2d 461, 464 [2001]).

In the instant case, the Board defendants have established, prima facie, that the Board's decision denying the plaintiffs' application to purchase an additional cooperative unit was made "for the benefit of the residents collectively . . . .within the scope of its authority and in good faith" (Levandusky, 75 NY2d at 538). Three of the Board members testified at their depositions that the plaintiffs' application was denied due to, inter alia, an unacceptably high debt-to-income ratio, the failure of Ms. del Puerto to provide adequate verification of her income, the existence of a large number of credit card delinquencies and open credit cards with balances, accumulated arrears and late maintenance payments with respect to Unit 117 (the unit already owned by plaintiffs Ms. Del Puerto and Ms. Aguilera), the proposed interest-only private financing for the purchase by an individual for whom plaintiffs provided little information and the dearth of information made available to the Board with respect to the sale of Unit 117 which allegedly would take place after the plaintiffs' purchase of Unit 217. Accordingly, the Board has presented sufficient evidence to support its contention that, as noted by defendant Lehman at his deposition, it denied plaintiffs' application with the purpose of "protecting 56 other shareholders from a possible debt problem, from a possible arrears" occasioned by the plaintiffs' demonstrable financial deficiencies.

In response to the Board defendants' prima facie case, plaintiffs have failed to raise a triable issue of fact. The court notes that, contrary to the Board defendants' contentions, plaintiffs have standing to bring the instant action as shareholders who were owed a fiduciary duty by the Board with respect to their purchase application (see generally Barbour, 296 AD2d at 218; Cohen, 7 Misc 3d at 1015). Plaintiffs primarily rely upon evidence which allegedly demonstrates that they were treated differently than other shareholders with respect to their application to purchase an additional unit at the cooperative. In support of such contention, plaintiffs submit calculations demonstrating that at least three other shareholders had less favorable debt-to-income ratios than plaintiffs, but nonetheless were approved by the Board to purchase additional units in the cooperative. Plaintiffs also proffer the affidavit of Ms. King, a shareholder who was ultimately approved to purchase an additional unit at the co-operative despite the fact that she initially was informed that she did not have sufficient income. Ms. King states that she was told by the Board that in order to be approved she would have to obtain a guarantor and place 8 months of maintenance payments in escrow until she sold her original unit. After she agreed to such terms and enlisted her daughter as a guarantor, she was approved [*9]by the Board to purchase the additional unit. Plaintiffs also allege that they were the only shareholders not afforded an interview by the Board and that the Board considered incomplete applications by other applicants while requiring that plaintiffs submit a complete application.

The foregoing allegations do not raise a triable issue of fact. Although the debt-to-income ratios of some shareholders approved to purchase additional units might have been less favorable than that of plaintiffs, plaintiffs have not proffered any evidence that such shareholders also demonstrated additional comparable financial deficiencies such as poor credit reports, past arrears in mortgage or maintenance payments, unverified income or private interest-only financing. Accordingly, given that it is largely undisputed that plaintiffs exhibited numerous financial deficiencies upon their application to purchase an additional unit, the Board's good faith in this regard could only be successfully impugned via a showing that other shareholders with a comparable level of financial deficits were nonetheless approved as purchasers of additional shares. Instead, plaintiffs have merely identified three shareholders who had income-to-debt ratios which were arguably less favorable than plaintiffs and have not submitted any evidence that the subject shareholders exhibited any additional financial deficits. Such limited deficiencies, without more, cannot serve to raise an issue of fact with respect to whether plaintiffs were treated "fairly and evenly" vis-a-vis other tenants. To do so would necessitate resort to surmise and conjecture that such alleged income-to-debt ratio deficiencies might evidence the existence of additional unidentified financial deficits comparable to those exhibited by plaintiffs, thereby rendering the Board's treatment of plaintiffs impermissibly different than its treatment of other similarly situated shareholders. However, absent admissible evidence of such comparable financial deficiencies and the Board's approval of the subject shareholders' purchase applications despite same, the court cannot find, on the record before it, that a question of fact exists with respect to the alleged disparate treatment of shareholders by the Board.

Moreover, although the Board allowed one shareholder to obtain a guarantor and place 8 months of maintenance payments in escrow in order to cure the problem of her insufficient income, such shareholder has been identified as apparently exhibiting only one category of financial deficiency - insufficient income - as opposed to the multiple deficiencies attributable to plaintiffs and, in any event, there is no evidence that the plaintiffs proposed that they be allowed to obtain a guarantor as a curative measure upon the rejection of their application. Also, although plaintiffs allege that the production of incomplete applications by the Board defendants during discovery warrants a finding that the Board improperly approved incomplete applications while rejecting the complete application of plaintiffs, the Board defendants have produced ample evidence that the Board only considered complete applications and the discovery deficiencies complained of were due to the loss of documents by the cooperative's management company. In addition, to the extent that plaintiffs' allege that their application was denied on some grounds which were not included in their credit report, they have not demonstrated that such additional grounds for rejection were not otherwise supported or that the Board is constrained from considering financial criteria not reflected in such reports. Finally, although plaintiffs were denied an interview, whereas other shareholders allegedly were not, they have not proffered any evidence that the other shareholders afforded an interview possessed comparable financial deficiencies and, in fact, defendant Lehmann stated that plaintiffs were not interviewed because their financial deficits were so numerous. Accordingly, as the plaintiffs have failed to "establish the existence of material facts of sufficient import to create a triable issue" (Shaw, 38 NY2d at 207), the court is constrained to apply the business judgment rule and grant that portion of the [*10]Board defendants' motion for summary judgment dismissing the plaintiff's breach of fiduciary duty cause of action.

To the extent plaintiffs allege the existence of self-dealing or bad faith on the part of the Board, they have failed to raise a triable issue of fact in this regard as well. Here, there is no admissible evidence that the Board denied the application based upon factors other than the best interest of the shareholders. Rather, the plaintiffs primarily rely on unsubstantiated hearsay statements - namely, statements made to Ms. Ruberto by Mr. Kerr recounting other statements allegedly uttered by Ms. Sagano - that the denial of the plaintiffs' application was done in retaliation for Ms. del Puerto's opposition to the proposed dog ban. In addition, the only allegation of self-dealing similarly involves mere speculation on the part of Ms. Ruberto that Mr. Kerr, the boyfriend of Board member Ruiz, "must have" received a finder's fee from the Oliveros with respect to their purchase of Unit 217 because he was able, near the time of said purchase, to afford a security deposit on an apartment despite financial difficulties. However, neither hearsay (see Young v Fleary, 226 AD2d 454 [1996]; Siegel v Terrusa, 222 AD2d 428 [1995]) nor speculation (Shaw, 38 NY2d at 207), such as that proffered by plaintiffs, is sufficient to defeat a motion for summary judgment.

Also, although the complaint states that Ms. Sagona allegedly told Ms. del Puerto at a Board meeting that her application had been denied because Ms. del Puerto tried to bribe the cooperative into allowing her to purchase the unit by refusing to provide free legal services regarding the refinancing of the cooperative's mortgage unless the plaintiffs' application was approved, no admissible evidence with respect to such claim has been proffered by plaintiffs in support of their instant motion or in opposition to the Board defendants' cross motion. Finally, the disparate personal conflicts alleged by plaintiffs - including, i.e., at least one verbal altercation between Ms. del Puerto and Ms. Sagona regarding the refinancing issue and tense relations between Ms. Aguilera and Ms. Ruiz with respect to Ms. Aguilera's alleged support of a former president of the cooperative - are insufficient to demonstrate the requisite bad faith necessary to overcome the application of the business judgment rule to the Board's decision. Rather, the discrete and isolated nature of such conflicts - which allegedly were limited to interactions between the plaintiffs and Ms. Sagona and Ms. Ruiz, two Board members who have not been shown to exercise control over any other members of the Board - render the plaintiffs' broad claims of retaliation and personal animosity merely conclusory. Accordingly, as plaintiffs have failed to raise a triable issue of fact with respect to the existence of any alleged self-dealing or bad faith on the part of the Board, the Board defendants are entitled to summary judgment dismissing the plaintiffs' breach of fiduciary duty cause of action.

Given the application by the court of the business judgment rule, the plaintiffs' cause of action for tortious interference with contract and fraud must also fail. Where, as here, there has been no showing that the cooperative's challenged decision was rendered in bad faith or in furtherance of purposes other than those legitimately held by the cooperative corporation and, accordingly, the business judgment rule applies, "it is plain that . . . [a] claim that said [complained-of] actions constitut[e] tortious interference with the subject sale of cooperative shares . . . [is] not tenable" (Woo v Irving Tenants Corp., 276 AD2d 380, 380 [2000], citing Levine v Yokell, 245 AD2d 138, 139 [1997]). Similarly, given the application of the business judgment rule to the Board's determination, no triable issues of fact exist with respect to the fraud claim asserted by plaintiffs , given that such claim is primarily premised upon the alleged "bad faith" of the Board in reaching its decision to deny the plaintiffs' application. In any event, [*11]the plaintiffs have not identified any misrepresentations made to them by the Board upon which they relied to their detriment. Rather, they appear to base their fraud claim on representations allegedly made by a Board member to Ms. Toole, via her attorney, that the Board would not be meeting for a few months, and, thus, would not be reviewing potential purchasers of Unit 217 during that time. Ms. Toole allegedly was "pressured" by such statements into selling the subject unit to the Oliveros. Plaintiffs allege that such representation was allegedly not true, as the Board did end up meeting during the months in question. However, there is no evidence that such statement was made with knowledge that it was false and, in any event, such statement was not made to, or relied upon by, plaintiffs. In addition, such statement was made subsequent to the rejection of plaintiff's application, the denial of which the court has already adjudged to be insulated from review pursuant to the business judgment rule. Accordingly, as plaintiffs have failed to raise any triable issues of fact with regard to either their tortious interference with contract claim or fraud claim, such claims are subject to dismissal pursuant to CPLR 3212.

The Oliveros' Cross Motion for Summary Judgment

The Oliveros are also entitled to summary judgment dismissing the plaintiffs' complaint. The gravamen of plaintiffs' claims against these defendants is that the Oliveros allegedly paid a finder's fee of $5,000 to Mr. Kerr, the boyfriend of Board member Ms. Ruiz, thereby engaging in fraud and "tortiously interfering" in the contract of sale between Ms. Toole and the plaintiffs. Given that the Oliveros' alleged liability for tortious interference with contract and fraud is inextricably intertwined with similar claims asserted by plaintiffs against the Board defendants, such claims must also fail for much the same reasons. The court has determined that the Board defendants have, prima facie , demonstrated that the Board's decision to deny the plaintiffs' purchase application was made in good faith and is protected by the business judgment rule, and plaintiffs have failed to raise a triable issue of fact in opposition thereto, as no valid contract existed that was subject to interference by third parties.

It is undisputed that the contract's validity was contingent upon the Board's approval of the plaintiffs' application. As such application was denied pursuant to the Board's exercise of its business judgment, a valid contract did not exist between the plaintiffs and Ms. Toole. Moreover, the only alleged evidence of the putative "finder's fee" primarily relied upon by plaintiffs in support of their claims against the Oliveros is the wholly unsubstantiated speculation of Ms. Ruberto. Although plaintiffs contend that summary judgment is premature as the Oliveros have failed to comply with certain discovery requests to produce bank records for the relevant time period, it is well settled that speculation or surmise that material information will be revealed upon further discovery will not suffice as a ground to deny a motion for summary judgment (see Smith v Fishkill Health-Related Center, Inc., 169 AD2d 309, 316 [1991], lv denied 78 NY2d 864 [1991]). Here, it is entirely speculative, given that Ms. Ruberto's testimony with respect to the alleged finder's fee, in and of itself , relies solely upon unsupported conjecture and unsubstantiated guesswork, that any evidence concerning such fee would be revealed upon further discovery. Accordingly, the Oliveros' cross motion for summary judgment is granted in its entirety.

As a result, the plaintiffs' motion for partial summary judgment is denied. The Board defendants' cross motion for summary judgment dismissing the complaint as against them is granted in its entirety. The Oliveros cross motion for summary judgment dismissing the complaint as against them is also granted in its entirety.

The foregoing constitutes the decision, order and judgment of the court. [*12]

E N T E R,

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J. S.C.