13315 Owners Corp. v. Kennedy, 4 Misc. 3d 931 (2004)

Citation: 13315 Owners Corp. v. Kennedy, 4 Misc. 3d 931 (2004)
Parent Document: 13315 Owners Corp. v. Kennedy, 4 Misc. 3d 931 (2004)
Jurisdiction: New York (state)
Effective Date: 2004-06-29
Original Source: https://www.courtlistener.com/opinion/6305035/13315-owners-corp-v-kennedy/ ↗

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In this case respondent raises two successful defenses to applying the business judgment rule, although he needed to show but one. Respondent has proven that the board acted outside the scope of its authority and in bad faith. The board, improperly elected, denied due process: it gave neither valid notice nor an opportunity to be heard. The court thus declines to apply the business judgment rule under Pullman’s phase one and moves to Pullman phase two. In phase two, the court reviews the evidence under a competent-evidence analysis to decide whether a shareholder’s actions were objectionable. Although petitioner lists many potentially objectionable acts on respondent’s part, only a trial judge can decide whether it all rises to objectionable conduct and whether respondent is responsible for his subtenant’s actions.

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