There has been a lot of interest in what happened on Tuesday morning…and not without a bit of grousing over our inability to provide instant feedback. As a preliminary matter, I hope fellow shareholders and tenants can please cut us a little slack. We (the plaintiffs and a heartwarmingly growing number of fellow residents) are paying legal fees and other costs from our own pockets, and carving out scarce time from our busy work and family lives to write, copy, collate, stuff, and mail informational packets, etc.
Please also bear in mind that whatever information shareholders and residents have received about the substance and factual allegations in the lawsuit has come from us, at our own financial and sweat expenditure. The Board leadership has provided two brief notices to shareholders intended not to enlighten but to obscure issues and frighten shareholders, by demonizing me and my fellow plaintiffs and the Election Inspectors. The first notice was distributed to apartments within days of the complaint, and provided nothing but the names of the plaintiffs and scary language to terrorize shareholders about costs and insurance; the other notice was placed as a front-page banner in the recent “Down By the Riverside”, and limited itself to providing a bigger estimate for costs. And I use the term “Board leadership” precisely – no Board meeting was convened to approve the first announcement with the plaintiffs’ names, and before it was issued, the text of that notice was never even shared with, never mind approved by, the Board in whose name it was distributed to shareholders.
The Board leadership certainly never saw fit to tell the community about other litigations it has needlessly pursued – such as a recently settled case in which YOUR CO-OP pointlessly spent some $35,000 or more in legal fees in order to try (happily, without success) to punish a shareholder for the arrogance of believing he had a right to exercise his own aesthetic judgment within the interior of his own apartment. (The intrepid shareholder will be telling his own story soon. Watch this site!)
How many other such litigational black holes have the arrogance and defensiveness of a few obliged YOUR CO-OP to fund? Don’t know? Neither do several of your Board members. Ask them. And be sure to ask the Board leadership next Monday.
So, Tuesday was a setback for the plaintiffs, but, some premature gloating by the Board leadership not with standing, the lawsuit is hardly over. Through what appears to have been a legal misjudgment by plaintiffs’ lawyer, the Corporation was not specifically named as a respondent in the complaint. Though the error was quickly corrected by an amended filing, the judge could use the oversight as grounds to dismiss the case for a technical failure to provide timely notice of the lawsuit to the Corporation, and thus failing to include a “necessary party.”
On the other hand, there are at least two legal theories that would give the judge more than enough legal authority to use his discretion to excuse the mistake, provided we can meet certain other technical hurdles. There is no question that the failure, if that’s what it was, did not in any way prejudice the Corporation or the other defendants, and certainly not the shareholders.
After listening to both sides’ arguments at Tuesday’s hearing, the judge decided to take the “necessary party” issue under advisement, stating that he would produce a written opinion on the question. If he decides to hold the plaintiffs strictly accountable for the lawyer’s technical mistake, he could dismiss the case. If, however, he decides that we have met certain other technical hurdles, he can excuse the mistake and we’re back in business. We may still get our day in court.
I don’t want to understate the setback – which could end the case, and which, in the best of outcomes, will still cost us precious time (hopefully not more than a month) in what is supposed to be an “expedited proceeding.” Still, to me, in the two sessions we’ve had, the judge seemed clearly to be interested in the case and to consider the allegations worthy of a serious listen. For one example, he noted at one point that he understands the merits of the claims.
It is important to note that if the judge had thought the case was simply frivolous or groundless, he could easily have dismissed the case at Tuesday’s hearing, giving reasons orally, without needing to write a formal opinion. Yet he chose to defer decision on the technical “necessary parties” issue. The question is whether the technical problem we face is too great for him to address the merits, which, in my view, he would like to get to.
The judge also dismissed the case as against Honest Ballot. Though I was troubled at first, I do not think now that this was an adverse decision for us. The judge noted that in the special limitations of the election-challenging proceeding, the sole remedy, as a practical matter, is a new election. Accordingly, unlike the directors and Corporation defendants, Honest Ballot could not provide us any remedy even if we receive a completely favorable judgment. Our rights to get testimony or other evidence from Honest Ballot are unaffected by excusing them from the case.
If we do have the case dismissed on the “necessary parties” technicality, those responsible for what was at very best a farcical, confusing and chaotic election process should not be allowed to parade around as if they have been vindicated of the serious allegations in our complaint, not least of which was the unprecedented decision entirely to exclude the Election Inspectors from participating in the vote counting and validation process, in violation of applicable norms under the NY Business Corporations Law, our own Corporation’s By-Laws, and well established prior year WVH practice.
As Linda Gibbs, President of Honest Ballot, stated under oath in her Affidavit supporting the WVH Board leadership, “[T]he election inspectors in this election [did not] have any of the duties or responsibilities as asserted by the petitioners. These inspectors had no more than a ceremonial role.” (Emphasis added.) Please consider how you feel, as a shareholder, with a Board leadership that considers basic shareholder oversight over the most important decision in the Co-Op calendar as merely “ceremonial.” Are they really people to whom you want to entrust your life savings?
If the Board leadership does win on a technicality, that will say nothing at all about the merits of the case.
Regardless of the outcome, we ask those who support fair elections to redouble their efforts to make sure that this never happens again, by recruiting your neighbors and voting in the next election for people who respect your rights and believe in transparent and inclusive governance for our community.Ken Hurwitz 684 Washington Street Plaintiff in the election lawsuit