In Fletcher v. Dakota, Inc., an African American plaintiff sued New York’s famous Dakota building and individual defendant board members on the basis that he was discriminated against after attempting to purchase the apartment adjacent to his for the purpose of combining the two apartments. He was successful at trial and defendants appealed the trial court’s decision. In addressing the claims against the individual board of director defendants the Appellate Division, First Department clarified its own ruling in Pelton v. 77 Park Ave. Condominium, 38 A.D.3d 1 (2006). It stated that while breach of contracts will not generally give rise to individual director liability, the participation of a director in a corporation’s tort will be sufficient to give rise to individual liability.
The individual director defendants further appealed the trial court’s decision based on the fact that the complaint failed to allege acts separate and distinct from those that were taken as board members. The Appellate Division upheld plaintiff’s retaliation claims against the corporation and individual defendants to the extent plaintiff alleged (1) plaintiff engaged in a protected activity by opposing conduct prohibited thereunder; (2) defendants were aware of that activity; (3) plaintiff was subject to an adverse action; and (4) there was a causal connection between the protected activity and the adverse action.
Reviewing the complaint, plaintiff was able to maintain his claims against the corporate defendant, but not yet as against one of the individual director defendants, as he joined the board after plaintiff’s alleged opposition to conduct occurred. Moreover, additional defamation claims were dismissed against the corporation because the Appellate Division found that the complaint did not properly allege that, in respect of certain conduct, that the defendants “knew or should have known that plaintiff was opposing discrimination” when he made certain complaints.
As a result, the Appellate Division made substantial modifications to the trial court’s order, which it otherwise affirmed.
Special thanks to Alison Weintraub for her contributions to this post. For more information, please contact Bob Cosgrove at firstname.lastname@example.org.