A Brooklyn condominium board learned a painful lesson recently when a jury awarded $55,000 in punitive damages to a unit owner who lived with a leaking roof for 11 years.
The verdict in the case
The case was tried in New York City Civil Court in Brooklyn in July and August of 2003. I represented the unit owner at trial and from July 2000 to date. The case involved a longstanding dispute between my client and the board of managers. The jury awarded my client $15,800 in compensatory damages for property damage in addition to the $55,000 in punitive damages.
Worse yet for the board, punitive damages are not covered by directors and officers (D&O) insurance in New York State. After the trial judge denied the board's motion to set aside or reduce the amount of the punitive damage award, the board - with the approval of unit owners - imposed a special assessment on all unit owners to pay the verdict, and the verdict was paid by the board in April 2004 - with interest. Thus, all unit owners had to pay for the board's failure to address the leaks.
The dispute began in 1992 when my client purchased a duplex unit with a rooftop terrace in a new 36-unit condominium building in Brooklyn. Roof leaks occurred regularly from 1992 through 1997. After consultants confirmed that the roof was poorly constructed, the board called a special assessment on unit owners in 1997 and the roof was completely reconstructed. However, leaks continued into my client's unit.