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UNLAWFUL DISCRIMINATION IS HELD SUFFICIENTLY CULPABLE TO SUPPORT A CLAIM OF INTERFERENCE WITH PROSPECTIVE ECONOMIC RELATIONS

In 30 CPS LLC, v. Board of Managers of Central Park South Medical Condominium, _ _ N.Y.S.2d _ _, 2009 WL 513458 (Sup. Ct. N.Y. County 2009), a condominium unit owner brought an action against the condominium board ("Board") and its president, alleging (i) breach of contract; (ii) tortuous interference with prospective relations and (iii) discrimination.

Plaintiff sought to convert its condominium unit (the "Unit") from a restaurant to residential use, which was permissible under the condominium declaration and the New York City Zoning Resolutions. In connection with its proposed conversion, plaintiff obtained the approval of the New York City Board of Standards and Appeals and the New York City Department of Buildings (collectively, the "City"). The Board, however, did not approve of plaintiff's contemplated change and asked the City to revoke its permit. Ultimately, the City revoked its permit due to the Board's opposition to the change in use of the Unit.

The court noted that breach of a binding agreement and interfering with nonbinding "economic relations" are two separate torts with different elements. Regarding the latter, "the plaintiff must show that defendant's conduct was not 'lawful' but 'more culpable,' such as a crime or an independent tort, or conduct intended to inflict harm on the plaintiff." Id. at *5, citing Carvel Corp. v. Noonan, 3 N.Y.3d 182 (2004). "In addition, the plaintiff must prove that the defendants knew of the proposed contract, intentionally interfered with it and that it would have been entered into but for the interference." Id.

In this case, plaintiff alleged that the Board had knowledge of a proposed contract for the sale of the Unit to a prospective purchaser; that the contract would have been entered into had the Board not interfered with plaintiff's attempted conversion of the Unit; and that the Board's interference was based on ethnic animus.

The court held that unlawful discrimination is sufficiently culpable to support a claim of interference with prospective economic relations and denied defendants' cross-motion for summary judgment.

Sean C. McPhee, Esq.

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