The following papers numbered 1 to 50 were read on Riverbend Homeowner's Association Inc.'s ("Riverbend") motion for summary judgment on its counterclaims, and on the issue of liability, Riverbend's and Westchester Property Management Group, Inc.'s (WPMG") motion for summary judgment and plaintiff's motion for summary judgment:

PAPERS NUMBERED

Riverbend's Notice of Motion/Affirmation/Exhibits A-E1-7

Riverbend's and WPMG's Notice of Motion/Affidavit/

Exhibits A-J/Affidavit/Exhibits 1-88-28

Plaintiff's Affirmation in Opposition29

Plaintiff's Notice of Motion/Affirmation/Memorandum of Law/

Exhibits A-L30-44

Riverbend's Reply Affirmation/Exhibits A-B45-47

Riverbend's and WPMG's Opposition/Reply Affirmation/Exhibit K-L48-50

Upon the foregoing papers Riverbend's and WPMG"S motions are GRANTED, and plaintiff's motion is DENIED.

Procedural and Factual Background

Plaintiff owns a unit at the Riverbend Condominiums.Plaintiff purchased her unit on September 29, 2005. At that time she was given a copy of the offering plan and By-Laws as well as the condominium rules and regulations. On January 15, 2006, plaintiff rented her unit to Michael Bisordi for a period of one year. Plaintiff then entered into a new lease with Donna and Robert Bisordi on August 1, 2008. Plaintiff paid the common charges for the unit until 2009 when she started to have some financial issues. Apparently, Riverbend and WPMG had issues with plaintiff's tenants pets and where they parked their car.

Plaintiff commenced this action on May 22, 2009. Riverbend answered on July 27, 2009 and WPMG answered on March 8, 2010. In her complaint, plaintiff alleges that common charges, fees and fines were improperly and illegally assessed against her, that the common charge lien against her unit is an improper cloud upon her title to the unit, and that by filing the common charge lien and demanding that her tenants pay their rent to them , Riverbend and WPMG conspired to libel her and deny her full use of her property.In its answer Riverbend asserted two counterclaims. The first seeks foreclosure of the common charge lien in the amount of $10,355.64 and the second seeks $23,934.54 in association charges.

On November 10, 2009, this Court denied plaintiff's motion to dismiss Riverbend's affirmative defenses and counterclaims.

Riverbend's and WPMG's Motion for Summary Judgment

Riverbend and WPMG move for summary judgment dismissing the complaint on [*2]the ground that pursuant to the Condominium's Offering Plan the Condo^[FN1] has the power to promulgate and enforce rules and regulations governing the use of the common elements by the unit owners. Riverbend's By-Laws also provide that the property and business of the condo shall be managed by its Board of Managers who have the power to make reasonable rules and regulations which shall be binding on the unit owners. The By-Laws also provide the Board with the power to levy fines against any unit owner for violating the rules and regulations established to govern the conduct of the unit owners. Article III, Section 5(s) of the By-Laws permit the Board to levy fines of $50 for each separate violation and once a notice of the violation has been sent to the unit owner, each day thereafter that the violation continues may be considered a separate violation resulting in additional fines. The By-Laws also provide that the collection of fines may be enforced against a unit owner as if such fines were common charges.

Riverbend and WPMG note that Article X of the By-Laws addresses the sale, lease and mortgage of the units. Section 1 of that Article provides that Riverbend Condominium 1 has the right of first refusal to purchase or lease any unit which has already been offered by the unit owner for sale or lease. The Board has 20 days to exercise its right of first refusal or that right is deemed waived. The unit owner is required to provide the Board with an executed copy of the lease between the unit owner and the tenant. Article X also provides that "[a]ny purported sale or lease of a Unit in violation of this Section shall be voidable at the election of the Board of Managers."

Riverbend and WPMG also note that Article XIII of the By-Laws entitled "Rules and Regulations," state, in relevant part: "Rules and regulations concerning the use of units and the Common Elements shall be promulgated and may be amended by the Board of Managers . . . Copies of such Rules and Regulations shall be furnished by the Board of Managers to each Unit Owner prior to the time when the same shall become effective."

In support of their motion for summary judgment dismissing the complaint, Riverbend and WPMG submit the affidavit of Sally Starin, a senior property manager for WPMG who was the property manager for Riverbend Homeowners Association Inc. from October 1, 2005 to July 2009. Starin states that while she was the property manager for Riverbend she attended almost all of the Board of Managers meetings. Starin noted that no rule or regulation was ever passed by the Board which was not based on an unanimous vote which the Board thought was the correct way to operate.

Starin noted that on May 22, 2006, the Board voted to adopt a new rule that all dogs were to be registered with WPMG along with a copy of their dog license. On May 14, 2007, at the Board meeting the Board discussed whether to require a fee to be paid by dog owners because of the amount of damage that the dogs were causing to the condo grounds. At that meeting, the Board decided to charge dog owners $25.00 per year if they voluntarily registered their dog and $50 per year if WPMG had to notify and [*3]pursue the dog owner. Starin states that on July 16, 2007, she sent a letter to the unit owners, at the direction of the Board, notifying them of the change in the rules with respect to dog ownership.

Starin states that on December 3, 2007, the Board passed a change to rule by which late fees were charged for the late payment of commons charges.

Starin stated that she had a lot of interaction with plaintiff. Her first interaction was in when she notified plaintiff that she did not provide the Board with the lease for her rented unit and that plaintiff did not obtain a waiver of the board's right of first refusal. By letter dated November 1, 2007, Starin informed plaintiff that her tenants parked their car on the street and not in their driveway or garage in violation of the condo parking rules. Starin informed plaintiff that her tenant had left the car on the street for three days. As a result of these violations, plaintiff was fined $50 per day for the parking violation. She also incurred a fine of $50 because the lease for her unit had expired on January 14, 2007 and no new rental had been filed with WPMG.

Starin stated that on January 15, 2008, a letter was sent to the unit owners informing them that a new $500 fee was going to be charged for rentals when the existing leases expire. The new fee became effective February 1, 2008. That letter also explained the new late fee structure which was also to become effective February 1, 2008. By letter dated January 29, 2008, plaintiff was notified that she was in violation of a number of the condo rules and regulations. First, plaintiff's lease had expired on January 14, 2007 and had never been replaced making her tenants illegal for a period of more than one year. Further, plaintiff's tenants regularly violated the parking rules by parking their car in the designated visitors parking spaces or in another unit's driveway. Plaintiff's tenants also allowed their dog to run unleashed, to go the bathroom wherever it wanted and the tenants did not clean up after their dog. Plaintiff was fined $500 for the unpaid rental fee, $150 for unpaid WPMG administrative fee, $50 for the unpaid dog registration fee and $50 for not registering her tenants' dog.

By letter dated February 25, 2008, plaintiff was again notified that her tenants' dog was being let out of the unit unleashed and the tenants' failure to pick up after their dog. Plaintiff's tenants also parked their cars in their driveway, but allowed one of their cars to remain half in the driveway and halfway on the street thus forcing cars to drive around the jutting out car. Plaintiff was fined $50 for the dog issue and $50 for the parking issue.

By letter dated May 14, 2008, plaintiff was again notified that she had not complied with the rule which required the filing of the lease for her unit. In compliance with the By-Laws, plaintiff was notified that she was going to be fined $50 per day until the violation was resolved.

After receiving a letter from the unit owner next door to plaintiff's unit complaining of the dog and parking issues, Starin sent another letter to plaintiff informing her that her tenants allow their dog and cat out unsupervised and that her tenants failed to clean up after their dog. Plaintiff was fined $50 for the dog issue and $50 for the cat issue and was informed that a fine of $50 per day was going to be imposed until these violations were resolved.

Starin noted that on July 26, 2008, plaintiff filed a lease dated August 1, 2008 to July 31, 2009 for her unit. However, according to Starin, the lease was incomplete and [*4]not signed. Further, according to Starin, plaintiff was no longer permitted to rent out her unit since she was in arrears in her common charges payments for several months. Therefore, by letter dated August 8, 2008, the Board denied plaintiff permission to rent her unit.

On October 20, 2008, the Board instructed their counsel to file a lien on plaintiff's unit in the amount of $14,077.12.

Starin stated that on January 7, 2009, due to plaintiff's failure to make common charge payments, the Board sent a letter to plaintiff's tenants notifying them that they were in violation of several condo rules and regulations.

Starin noted that on March 30, 2009, by certified letter, Riverbend informed tenants that they were to pay their rent directly to Riverbend since plaintiff had not paid the common charges for a full year and fees and late charges accumulated.

According to Starin, as of April 1 2009, plaintiff had an outstanding balance of $22,678.60.

Based on the foregoing facts, Riverbend and W PMG argue that summary judgment dismissing the complaint is warranted since every action taken by the board was permitted pursuant to the provisions of the Offering Plan and By-Laws.

Riverbend's Motion for Summary Judgment on the Counterclaims

Riverbend move for summary judgment on its counterclaims arguing that when plaintiff purchased her unit she agreed to be bound by the offering plan and By-Laws of the condominium association. Therefore, plaintiff has no defense to the counterclaims that she is obligated to pay common charges and the fees and fines levied against her.

Plaintiff's Motion for Summary Judgment

In support of her motion for summary judgment, plaintiff argues that the manner in which Riverbend promulgated rules and regulations, circumvented the mandate of the Condominium Act and the By-Laws. While plaintiff acknowledges that she is in arrears in common charges, the lien filed against her unit includes fines and late fees which are not common charges and, therefore, the lien is void. Notably, plaintiff argues that the ledger which sets forth what she owes has charges which are not permitted pursuant to the By-Laws. Plaintiff argues that Real Property Law § 399-h clearly states that "Each unit owner shall be entitled to exclusive ownership and possession of this Unit," therefore, any restriction in plaintiff's ownership or possession of her unit is prohibited.

Plaintiff also argues that the promulgation of rules and regulations for the condo must be done with the same formality as an amendment to the By-Laws, to wit, approval of 2/3 vote of the unit owners. Therefore, since the rules and regulations promulgated by the Board were not voted upon by the unit owners the rules and regulations were void and unenforceable.

Therefore, plaintiff seeks summary judgment on her complaint arguing that the way she was treated by Riverbend and WPMG "is outrageous in that defendants intentionally libeled the plaintiff's property causing her tenant to use her security as rent, in that all privileges were withdrawn from the tenant." Plaintiff contends that because of the common charge lien, she is not able to sell her unit.

Discussion

[*5]Riverbend's and WPMG's Motion for Summary Judgment and Plaintiff's Motion for

Summary Judgment

A party seeking summary judgment bears the initial burden of affirmatively demonstrating its entitlement to summary judgment as a matter of law. (See Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]). Failure of a moving party to tender sufficient evidence to demonstrate as a matter of law the absence of a material issue of fact results in a failure to tender a prima facie entitlement to summary judgment and requires denial of the motion, regardless of the sufficiency of the opposing papers. (See McDonald v. Mauss, 38 AD3d 727 [2nd Dept 2007]).

Here, Riverbend and WPMG have established entitlement to summary judgment as a matter of law. Riverbend and WPMG have set forth the provisions of the Offering Plan and By-Law which permits the Board to promulgate rules and regulations regarding the common areas of the condominium. Moreover, plaintiff as a unit owner of the condominium agreed to be bound by the rules and regulations of the condominium.

In Matter of Levandusky v One Fifth Ave. Apt. Corp. (75 NY2d 530, 536 [1990]), the Court of Appeals not only employed the oft-quoted description of a cooperative or condominium association as, "a little democratic sub society of necessity" (Hidden Harbour Estates, Inc. v Norman, 309 So 2d 180, 182 [Fla Dist Ct App 1975]), but further characterized it as a "quasi-government." Fleshing out this analogy, the Court of Appeals said:

"Through the exercise of this authority, to which would-be apartment owners must generally acquiesce, a governing board may significantly restrict the bundle of rights a property owner normally enjoys. Moreover, as with any authority to govern, the broad powers of a cooperative board hold potential for abuse through arbitrary and malicious **3 decisionmaking, favoritism, discrimination and the like." (Matter of Levandusky v One Fifth Ave. Apt. Corp., supra at 536.)

While it acknowledged the potential for abuse of power, the Court found that the standard to be applied for the review of cooperative or condominium board actions should be modeled on the elastic business judgment rule from the corporate sphere as such a standard would best suit the purposes for which residential communities and their governing structures were formed. Those purposes were stated to be "protection of the interest of the entire community of residents in an environment managed by the board for the common benefit." (Id. at 537.)

Before reviewing a condominium Board's exercise of any power under the business judgment standard, however, the court must first make a determination as to whether the Board in fact possessed the power it purported to exercise. (See Schoninger v Yardarm Beach Homeowners' Assn., 134 AD2d 1, 6-7 [2nd Dept 1987]). Thus, the power claimed by the Board must either be granted by statute or derived from the declaration or By-Laws of the condominium. (1A [part 1] Rohan and Reskin, Condominium Law and Practice § 45.04 [1]; Fierro, Condominium Association [*6]Remedies Against a Recalcitrant Unit Owner, 73 St. John's L Rev 247, 252 [1999].)

Real Property Law § 339-v(1)(h) provides "1. The by-laws shall provide for at least the following: (h) Method of adopting and of amending administrative rules and regulations governing the details of the operation and use of the common elements."

Real Property Law § 339-v(2)(a) provides "2. The by-laws may also provide for the following: (a) Provisions governing the alienation, conveyance, sale, leasing, purchase, ownership and occupancy of units, provided, however, that the by-laws shall contain no provision restricting the alienation, conveyance, sale, leasing, purchase, ownership and occupancy of units because of race, creed, color or national origin."

Here, Riverbend's By-Laws authorize the Board to "determine and levy monthly assessments ( Common charges') to cover the cost of common expenses of the Condominium . . . " (By-Laws Part [b] Document Number 8, at page 265). Park (k) of Document 8 of the By-Law also authorizes the Board:

To make reasonable rules and regulations and to amend the same from time to time. Such rules and regulations and amendments shall be binding upon the Unit Owners when the Board as approved them in writing. A copy of such rules and regulations and all amendments shall be delivered to each Unit Owner.

Part (s) of Document 8 of the By-Law authorizes the Board to:

Levy fines against any Unit Owner for violating the Rules and Regulations established to govern the conduct of Unit Owners. No fine shall be levied for more than $50.00 for any separation violation, but for each day the situation creating such violation continues after a Unit Owner has been sent notice of such violation, such situation may be considered a separate violation resulting in an additional fine unless the Board deems otherwise. Collection of fines may be enforced against the Unit Owner(s) as if such fines were a Common Charge assessed with respect to and payable by the particular Unit Owner(s) against whom such fines were levied. Such fines shall be collected in addition to, and not in derogation of any rights of the Unit Owners, Board of Manager or the Condominium;

With respect to leasing a unit pursuant to the provisions of Article X of the By-Laws, No Unit Owner other than the Sponsor may sell or lease his Unit . . . except by complying with the following provisions: . * * * Any Unit Owner who receives . . . a bona fide offer for a lease of his Unit, which he intends to accept, shall give notice by Certified or Registered Mail to the Board of Managers of such offer and of such intention, the name and address of the proposed . . .lessee . . . "

Article X also provides, in relevant part, "In the event such Unit is to be leased, the offering Unit Owner shall execute and deliver to the Board of Managers . . . a lease between the offering Unit Owner, as landlord, and Board of Managers, as tenant, for the rental and term contained in such Outside Offer. In the event the Board of Managers . . fails to accept such offer within twenty (20) days" the offering Unit Owners shall be free to contract to lease the unit. Article X also provides "Any purported sale [*7]or lease of a Unit in violation of this Section shall be voidable at the election of the Board of Managers."

Based upon these provisions of the Real Property Law and Riverbend's By-Laws, Riverbend and WPMG have demonstrated that they had the authority to promulgate rules and regulations regarding the use of common elements of the condo as well as regarding the leasing of a unit.

Thus, pursuant to the Riverbend's By-Laws plaintiff was to provide the Board of Managers with a copy of the lease for her Unit. When, upon notice of that requirement, plaintiff failed to comply with the obligations responsibilities she agreed to when she purchased her unit, the Board acted properly by imposing fines. Further, plaintiff's continued failure to provide the lease allowed the Board to impose additional fines. Likewise, the Board was empowered to promulgate rules regarding pets and parking at the condominium.

Pursuant to the rules and regulation No. 7 "The sidewalks, pathways, driveways and entrances of the Association Property or comprising any portion of the Common Elements shall be not obstructed . . . " Clearly, plaintiff's tenants violated this rule by parking their cars in such a manner as to leave them partially in the driveway and partially in the street. Thus, the imposition of a fine for this violation was proper.

Likewise, plaintiff's tenants acts of letting their dog run unleashed in the common areas, no cleaning up after their dog soiled the common areas, permitting their cat out into the common areas are all acts which involve the common elements of the condominium

Contrary to plaintiff's argument there is nothing in the RPL or the By-Laws which mandate that the promulgation of rules and regulations must be done with the same formality as an amendment to the By-Laws. Notably, the Board can promulgate rules and regulations as they see fit. Pursuant to Article XIII of the By-Laws, Unit Owners, however, have the right to amend or repeal any rule or regulation promulgated by the Board with a majority vote at a duly conducted Unit Owner's meeting. Moreover, there is no evidence that any actions take by the Board was taken to "intentionally libel" plaintiff. Notably, by plaintiff's own admission, she has not consistently paid her common charges.

On account of the foregoing, Riverbend and WPMG motion for summary judgment dismissing the complaint is GRANTED and plaintiff's motion for summary judgment is DENIED.

Riverbend's Motion for Summary Judgment on its Counterclaims

Based upon the foregoing legal analysis regarding Riverbend's rights to promulgate and enforce its own rules and regulations, its motion for summary judgment on the counterclaims is GRANTED on the issue of liability. Plaintiff, for her part, contends that there have been payments which are not reflected in Riverbend's arrears number.

Moreover, since Riverbend did not provide the Court with the provision of the By-Laws which allow it to collect legal fees [*8]from unit owners that portion of the motion seeking legal fees is DENIED.

The parties, attorneys only, are directed to appear on August 9, 2011, in the Settlement Conference Part, room 1600 at 9:30 for the scheduling of an inquest on the issue of amount due and owing Riverbend, excluding legal fees.

Dated: White Plains, New York

July 5, 2011

HON. WILLIAM J. GIACOMO, J.S.C.