Andrew P. Brucker in Legal/Financial on February 2, 2023 For Habitat Magazine
A license to vent. Disputes between co-op and condo boards and their shareholders or unit-owners have become more vitriolic than ever, thanks in no small part to the Internet. People can complain viciously and broadcast it instantly while remaining anonymous. It’s a recipe for charges of defamation.
That was the case in Brightwater Towers Condominium v. Vitebsky, Zilberman and Sosina. A number of unit-owners felt that the board was not handling the operations of the 700-unit Coney Island condominium properly. Three of them — Alexander Vitebsk, Leonid Zilberman and Irana Sosina — created a Google group, BWTUnitOwners, and sent out accusatory statements to the nearly 500 unit-owners who belonged to it.
Initial emails stated that board members should not “harass, threaten or attempt any means to control” residents and that the board was “no longer functioning to benefit the owners but to…squeeze extra income from us.” Another declared that the condo had “reached a serious moment of crisis which, if not addressed immediately, will have grave consequences on all BWT owners.”
Another email provided a list of actions board members should not take, including accepting gifts from owners, residents, contractors or suppliers, or spending unauthorized association funds for their own benefit. While the board was not directly accused of such improper behavior, one might get the impression that the board was guilty of such actions. Subsequent emails asked why board members were ignoring the condo’s bylaws and whether there was enough misconduct to warrant “removal for cause.”
See you in court. The condo board brought an action for defamation, claiming that all statements by the group were false. In addition, the board claimed that the group’s accusations were libelous. According to the board’s complaint, the statements were made with malicious intent to injure its reputation, and the defendants acted with knowledge of the falsity of the statements, and with reckless disregard for the truth.
For the plaintiffs to prevail in a defamation action, the statements made must be false, which means they must allege facts and not opinions. The second hurdle is that the defamatory statements must be “published.” This traditionally means that the statements must be broadcast or sent in some manner to the public at large — for example, by placing an ad in a newspaper.
However, there is the so-called “common interest privilege,” which allows statements to be made to a group of individuals who share a common interest, such as the unit-owners in a condominium. The Brightwater defendants invoked this privilege when they made a motion to dismiss the complaint, but it was denied by the court, which ruled their accusations could be read as “statements of fact, not opinion.” Further, the court felt that the defendants failed to prove that the common interest privilege applied. This decision was appealed by the defendants, and the Appellate Division reversed the lower court. The appeals court held that the statements constituted rhetorical hyperbole that could not be proven true or false. Further, the court held that a reasonable reader would have concluded they were reading opinions rather than facts.
A preemptive defense. So what can a board do to prevent a handful of dissidents from spreading nasty and often anonymous statements insinuating that it is acting improperly? Communication is the key. Quarterly newsletters are one way to keep residents abreast of the operations of the building and the decisions of the board. But the best way may actually have been provided by the pandemic — virtual meetings. The sniping by a few owners will most likely have very little effect if all residents hear directly, and frequently, from the board. Provided, of course, that the board is telling the truth.
For Vitebsky, Zilberman and Sosina: Kenneth Michael Giancola, Sam J. Shlivko
For Brightwater Towers: Daniel Szalkiewicz
Andrew P. Brucker is a partner at the law firm Armstrong Teasdale. The statements and views in this article are his own and not necessarily those of the firm.