Defending Against Discrimination Claims The Business Judgment Rule May Apply

In what may prove to be a significant victory for cooperative and condominium boards sued for housing discrimination, an appellate court recently applied the protection of the business judgment rule to a discrimination claim for disability accommodation.

In Pelton v. 77 Park Avenue Condominium, et al., the plaintiff—a unit owner suffering from muscular dystrophy—claimed that the condominium and the nine members of its board discriminated against him in violation of the New York City Human Rights Law. The plaintiff sought $23.5 million in damages, acknowledging that the condominium board agreed to some accommodations by purchasing a special wheelchair lift, providing special building access, granting exception to a house rule prohibiting in-unit laundry machines, and assessing $130,000 from unit owners for renovations to make the building handicap accessible. However, the board also denied requests for other structural modifications to building facilities and for reprioritization building-wide renovations.  

The court determined that the board’s decisions concerning structural modifications throughout the condominium to accommodate Mr. Pelton was protected by the “deferential standard” of the business judgment rule (BCL), and therefore, the board’s decisions would not be subject to judicial scrutiny.  

Discrimination Law Before Pelton

City, state, and federal anti-discrimination laws seek to shield individuals from housing related decisions that are motivated by animus towards a particular class of people, whether based on, race, creed, color, national origin, sex, sexual orientation, age, disability, and/or marital status. In addition, these laws also require cooperatives and condominiums to make “reasonable accommodations” for disabled residents upon request, so that they may use and enjoy the premises as their neighbors do.  

“Reasonable accommodations” may include exceptions to rules, policies, services, or procedures—such as allowing a disabled resident to own a dog, despite a house rule prohibiting pets—as well as structural modifications to building facilities, such as wheelchair ramps or mechanical lifts. Accommodations must sometimes be made at the expense of the housing association when the claim is brought under the New York City Human Rights Law.

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5 Comments

  • My aunt lives in a building where the older tenants like herself are long-term renters. Most of the building are owners. The building management refuses to put in a reasonable ramp. It will only put in portable ramps that are too short and steeply angled to be safely used. My aunt, myself and her aides are not strong enough to negotiate the sharp angle. Neither can one of the main doorman. Two others can. When the doorman who can't do it is on duty he sometimes claims management says he does not have to if there is an aide present and verbally abuses my aunt! This cannot be legal! I am actually sympathetic to the doorman, despite his terrible manners, as the ramp is awfully sharply angled and too heavy to lift back in and out of the closet. Do you know of any regulations about the angle of the wheelchair ramp to qualify as "reasonable"? Any help much appreciated.
  • I am the author of thsi article, and the court decision discussed aove has been overturned. You get the ramp based on objective reasonableness that a court would have to determine.
  • I am a pastor with a disability and limited income who has a church in an industrial complex. We have ffallen behind in payments and he board as used intimidation, ruthless tactics, and unlawful means to try to get their money. Can you help. The congregation is mostly seniors.
  • I am permanently disabled-16 years-documented- Board failed to respond (no interactive process)to: 1-Reasonable accommodation request for service dog to walk on the common area (stabilize my walking); 2- Accepting service animal as Emotional Support animal; and 3-Reasonable accommodation request to permit dog to walk on common area based on Dr. reports of "frozen shoulder and torn rotator cuff. I live in Hawaii (Maui)- What case decisions against the condo board support my fact pattern
  • I was just wondering...can an affirmative defense be used against an employee in a discrimination case?