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Pekelnaya v. Allyn10/25/2005
ents, the unit owners are not liable for plaintiffs' damages (see Smith v Parkchester N. Condominium, 163 Misc 2d 66 ). As this Court stated in Aarons v 401 Hotel (12 AD3d 293, 293-294 ), "An undivided interest in the common elements, including the land, does not equate with a proprietary interest in the portion of the building where the accident occurred sufficient to impose liability."
Plaintiffs further argue that the unit owners should be held liable as a matter of policy to afford a means of recovery to a person injured by a defect in the common elements. They note that unlike the cooperative form of ownership, in which the corporation is the owner of the premises and thus provides a source of payment for damages in excess of insurance coverage, the condominium is owned by the unit owners. Therefore, if the condominium's board of managers does not carry insurance against injury to third persons, the effect is to render the condominium judgment proof under circumstances such as these.
While the concern voiced by plaintiffs is sound, it is not material to the matter before us. Here, the condominium board has obtained substantial insurance coverage. Plaintiffs' grievance is not that the amount of liability insurance is inconsequential but that it will be insufficient to cover their damages. Be that as it may, the law only affords a means of recovery; it does not guarantee that the defendant will have sufficient resources to provide full compensation for any and all losses sustained. The situation confronting plaintiffs in this regard is no different than that faced by a plaintiff who is severely injured by a motorist carrying only the minimum liability insurance required by the Vehicle and Traffic Law.
We note that the Condominium Act, while setting forth minimum insurance requirements for property damage (Real Property Law § 339-bb), makes no provision for minimum liability coverage. Defendant Noelle A. Dean points out that California Civil Code § 1365.9(b)(2)(A) requires a condominium to obtain minimum liability insurance in the amount of $2 million if it contains 100 or fewer units. This is precisely the amount of liability coverage obtained by the board of managers in this case. Thus, the board cannot be faulted for unreasonably disregarding the interests of third parties who might sustain injury as the result of the condition of the premises. Nor can it be said that the board failed to exercise good faith in deciding the appropriate amount of liability coverage or that its decision was not the product of honest judgment in furtherance of a legitimate purpose of the condominium (see Auerbach v Bennett, 47 NY2d 619, 629 ).
Whether a judgment awarding damages for personal injury sustained as the result of the defective condition of the common elements of a condominium should be enforceable against the individual dwelling units and whether the board of managers of a condominium should be required to carry a minimum amount of general liability insurance, and the amount of such coverage, are matters appropriately addressed by the Legislature. Balancing the resulting public benefit against the financial impact upon the individual condominium unit owners and the infringement upon the discretion of the board of managers to exercise its business judgment involves competing policy considerations that are within the particular province of the legislative branch of government (see Matter of Kelly, 166 AD2d 822, 824 ). We urge legislation to require a condominium to obtain a minimum amount of liability insurance coverage in such amount as may be deemed adequate to protect the public.
Accordingly, the order of the Supreme Court, New York County (Sherry Klein He
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