The Market

Sleeping with the co-op staff won't get you special treatment, judge rules

By Virginia K. Smith  | August 19, 2014 - 11:59AM

We'd have thought this would be common sense, but in case there was any lingering confusion, a new lawsuit from a co-op shareholder at the Carlyle on the Upper East Side has made it crystal clear: just because you're sleeping with someone doesn't mean you should expect them to take care of your apartment.

Habitat Magazine reports that Murray Schwartz, a former CEO of Merv Griffin Enterprises and a shareholder of one of the famous hotel's co-op apartments, sued the Hotel Carlyle Owners Corporation after his apartment was damaged while he was at another one of his residences in 2011. Apparently, water somehow made its way into the apartment from a different unit, creating mold and causing significant damage to the walls, wall coverings, and floors. Initially, the hotel's director of residences, Alexandra E. Tscherne, only told Schwartz that there was a "small leak," according to his lawsuit, and brought in workers to begin repairs without informing him.

One major catch to the whole thing: Schwartz and Tscherne had a "long time close personal relationship," as he put it in the suit, and as such, he claimed that she owed him a "fiduciary duty." In other words, because they had been sleeping together, she was legally obligated to act in his best legal and financial interests, rather than those of her employer. If that sounds like an absurdly high expectation of a person with whom you have a casual romantic relationship, a New York County Supreme Court judge agrees with you, and issued a pretty choice statement in dismissing the claim:

"A fiduciary relationship.... exists only when a person reposes a high level of confidence and reliance in another, who thereby exercises control and dominance over him [or her]. Indeed, [Schwartz's] deposition testimony suggests the opposite: that it was he who was the party in control, allowing [Tscherne], for example, to go to his beach house only in his presence or with his permission. [...] As a sophisticated businessman, Schwartz had to know that however close their personal friendship had grown, Tscherne's duty of loyalty was to the Hotel as her employer." 

Given that Schwartz was reimbursed for repair costs by his insurance company and given a temporary abatement on his maintenance charges, the judge also dismissed his claims that the building was somehow in breach of contract. She did agree with his claim that the hotel's actions had "deprived him of the use and enjoyment of his apartment," as well as the allegations of trespassing—remember, repairs were started without his consent or knowledge—so this likely isn't the last we'll hear of this strange case.


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