Dhamoon v. 230 Park South Apartments, Inc. , 849 N.Y.S.2d 61 ( 2007 )

OPINION OF THE COURT

Catterson, J.

In this dispute between a cooperative board and the owner of several commercial units in the co-op building, the issue raised on appeal is whether adjoining properties owned separately by a wife and husband can be designated by the co-op board a jointly-owned, single unit in order to enforce a certain house rule barring access to the wife’s property.

The appellant, Dr. Dhamoon,^* and her husband both hold shares in professional space in a Central Park South Building owned by 230 Park South Apartments, Inc., a cooperative corporation. It is uncontroverted that the appellant owns commercial units IF, 1G, 2F, and 2G. She has operated her gynecology medical practice in the building since 1978, and has done so as the tenant-shareholder of all four combined apartments since 1988. The appellant exclusively holds four separate stock certificates and four separate proprietary leases to the four units.

It is also uncontroverted that the appellant’s husband, Mr. Dhamoon, owns commercial units ID and IE. He operates a reproductive endocrinology practice, more commonly known as a fertility clinic. These two units are treated as one combined unit and he holds a single stock certificate and a single proprietary lease for both units. These combined units have street access.

At or about the time that the appellant acquired the stock and lease for the last apartment in 1988, the board of directors unanimously adopted a resolution approving, among other things, the permanent, irrevocable and lawful use of the apartments occupied by appellant for professional and commercial purposes in connection with her medical practice, and the combination of units IF and 1G, with a single entrance door installed at a location accessible through the building’s lobby. This was the only entrance from outside the building to the appellant’s gynecology practice.

In April 2005, House Rule 2 was revised pursuant to the cooperative’s bylaws. Article III, section 8 permits the Board to adopt and amend house rules “as it may deem necessary in [sic] respect to the Building of Corporation for the health, safety and convenience of the Shareholder-Tenants.” House Rule 2 provided that “[n]o patient or anyone accompanying a patient of any doctor who has an office in the Building, shall be permitted to sit or wait in the lobby area, public halls, elevator hallways or doorway of the Building for any reason whatsoever.” In 2005, the amended rule stated that “[n]o patient. . . or [other] invitee. . . of any doctor, dentist, or medical practitioner who has offices or facilities in the Building, if any, shall be permitted to . . . wait in or use the lobby area . . . for access to such office” (emphasis added). This amendment was enacted ostensibly because two security breaches in 2001 allegedly involved persons identified as patients or visitors of the appellant. The board’s counsel also wrote to Dr. Dhamoon to direct her to remove two signs pursuant to House Rule 6 which stated that no signs, notices or advertisements “shall be inscribed or exposed on the Building” without board approval.

The appellant’s practice is the only medical office that does not have a street entrance, and consequently Dr. Dhamoon is the only shareholder-tenant affected by amended House Rule 2. The co-op determined that the appellant’s patients could use the door from the street to her husband’s offices in order to enter her medical office. The co-op board relied on the fact that at some time in 1990, a door was installed to connect Dr. Dhamoon’s property to the kitchen in her husband’s medical offices for the convenience of her staff.

Thus, to enter the appellant’s waiting room, a patient would have to enter through her husband’s front street entrance, and pass through the waiting area and the exam-room hallway of Mr. Dhamoon’s fertility clinic space, turn left and walk through a kitchen and up a stairway to enter the appellant’s staff-office area, before entering the gynecology practice waiting area.

Dr. Dhamoon commenced this action in August 2005 seeking a declaration that House Rules 2 and 6 are invalid, and an injunction prohibiting and enjoining the enforcement of the rules. The co-op board did not file an answer, but in October served verified counterclaims alleging, inter alia, that Dr. Dhamoon was subletting her space in violation of the proprietary lease.

Subsequently, Dr. Dhamoon moved by order to show cause for a preliminary injunction enjoining the co-op board from enforcing the subject house rules, and obtained a temporary restraining order enjoining the respondent from restricting her patients from entering the building lobby. The respondent, by cross motion, sought pre-answer CPLR 3211 (a) dismissal of the complaint on the basis of documentary evidence and for failure to state a cause of action.

In May 2006, the court denied Dr. Dhamoon’s motion for a preliminary injunction finding no likelihood of success on the merits. The court found it “crystal clear” from photos in evidence that the spaces comprised a single “integrated office space” (2006 NY Slip Op 30276[U], *5). It also relied on what it termed “prior inconsistent judicial statements” as to the ownership of the spaces (id. at *4). The court further granted the respondent’s cross motion and dismissed the complaint, severed and continued the respondent’s counterclaims and directed the matter to be recaptioned. For the reasons set forth below, we reverse.

The court’s decision essentially stands for the novel and legally untenable proposition that merely because parties are married, property held separately becomes property held jointly for the benefit of an independent third party. Thus, the court erred in determining that the six units comprise a single space, and so are jointly owned by the appellant and her husband.

First, there is no evidence whatsoever in the record to suggest that the six units were, or are, jointly owned. Indeed, all of the evidence of record establishes the opposite. The appellant acquired four separate units in 1984, 1986, and 1988. Her husband acquired two separate units in 1987. While Mr. Dhamoon combined his two units and received one stock certificate and one proprietary lease, these units were never combined with the appellant’s units and she still holds four separate proprietary leases and stock certificates. Nor is there any evidence in the record that a request was ever made, or granted, as to the “regrouping of space” or “reallocation of shares” that would result in all six units becoming one jointly-owned integrated space as would be required by article V, section 7 of the co-op bylaws.

While, the co-op corporation relies heavily on the fact that there is a door connecting appellant’s medical office with her husband’s fertility clinic, this fact alone is not dispositive of joint ownership. Property rights are not affected by any decision of neighboring owners to remove barriers to entry between their properties. Nor is it dispositive, contrary to the court’s reasoning, that the appellant and her husband hold executive or directorial positions in each other’s practices or that their respective practices may be owned by one corporation. None of these factors affecting the appellant’s business are at all relevant to their separate ownership of their respective interests in real property.

Further, we find that it is particularly egregious for the court to have supported its determination of joint ownership by reference to purported judicial admissions of the appellant’s husband in which he allegedly swore under oath that he owned the shares of all six units. Whether the appellant’s husband was mistaken, or was lying, whether he even made the statement, or what he gained by making the statement is not a matter before this Court. The relevant determination is that the separate properties of husband and wife were not magically converted into one jointly-owned property without any conveyance in writing but merely by appellant’s husband’s statement, even if the statement was made under oath. (See General Obligations Law § 5-703.) In this case, the stock certificates and proprietary leases held separately by husband and wife trump any judicial admission.

Finally, it is a basic tenet of New York property law that property owned separately by two parties cannot be combined into a joint ownership on the order of an independent third party. Simply because the two parties involved are married does not change this principle. While property acquired separately during marriage may be combined and equitably distributed during a divorce proceeding (Judson v Judson, 255 AD2d 656 [1998]), there is no legal authority, nor has there been since the Married Women’s Property Act of 1860, that would allow a third party to compel married parties to combine their separate properties into joint ownership during marriage. (See Domestic Relations Law § 236 [B].) Thus, the co-op corporation has no authority to require that the appellant’s patients utilize the street entrance of a separately-owned property, in the process creating an impermissible easement over that property.

Accordingly, the order of the Supreme Court, New York County (Shirley Werner Kornreich, J.), entered May 16, 2006, insofar as it denied appellant’s motion for a preliminary injunction, granted respondent’s cross motion to dismiss the complaint and amended the caption, should be reversed, on the law, without costs, the complaint reinstated, appellant’s motion for a preliminary injunction granted, respondent directed to serve an answer within 20 days of service of a copy of this order, and the original caption restored.

* Dr. Dhamoon was the original plaintiff, and the co-op board, the original defendant. Their positions switched as a result of the order on appeal. In this opinion, for clarity, Dr. Dhamoon is designated the appellant, and the co-op board, the respondent.