First Department Clarifies: Cooperative Boards Are Not Suable Entities in New York

Introduction

In Tahari v. 860 Fifth Avenue Corporation (2025 NY Slip Op 05584), the Appellate Division, First Department, addressed a recurring pleading issue in New York cooperative apartment litigation: whether a cooperative corporation’s board of directors can be sued as a separate juridical entity, apart from the cooperative corporation and apart from individual directors. The dispute arises from a long-running conflict between plaintiff-shareholder Elie Tahari and his cooperative corporation over the combination and renovation of two penthouse apartments. After earlier iterations of the case saw most breach of fiduciary duty claims against the corporation and individual directors dismissed (Tahari v 860 Fifth Ave. Corp., 214 AD3d 491 [1st Dept 2023]), the plaintiff re-pleaded breach of fiduciary duty solely against the “board of directors” and sought to add the sitting board president as a representative defendant.

The motion court (Engoron, J.) denied defendants’ motion to dismiss and granted the plaintiff’s cross-motion to amend. On appeal, the First Department (Scarpulla, J., writing for a unanimous panel of Webber, J.P., Scarpulla, Kapnick, González, and Michael, JJ.) reversed, holding that a corporate board of directors—here, a co-op board—has no independent capacity to be sued separate from the corporation itself. The Court also rejected the attempt to add the board president as a representative defendant, concluding that General Associations Law § 13 does not apply because a corporate board is not an unincorporated association.

Summary of the Opinion

Core holding: A corporate board of directors (including the board of a cooperative corporation) is not a suable entity separate and apart from the corporation it serves. The Business Corporation Law confers capacity to sue and be sued on the corporation, not on its board (BCL § 202[a][2]; § 701).
Disposition: Reversing the Supreme Court’s order, the First Department grants defendants’ motion to dismiss the complaint as against the “board of directors” and denies plaintiff’s cross-motion to amend to add the board president (Ryan Hagglund) as a representative defendant.
Clarification of precedent: The Court clarifies that prior First Department cases (e.g., Dau v 16 Sutton Place Apt. Corp., 205 AD3d 533 [1st Dept 2022]; Fuisz v 6 E. 72nd St. Corp., 222 AD3d 402 [1st Dept 2023]) should not be read to authorize direct suits against a board of directors because the issue of a board’s capacity to be sued was not raised in those cases.
Alternative defendants remain available: Shareholders may pursue appropriate claims against the corporation (e.g., for contract-based relief) and against individual directors for breach of fiduciary duty, where sufficiently pled (Weinreb v 37 Apts. Corp., 97 AD3d 54 [1st Dept 2012]; Peacock v Herald Sq. Loft Corp., 67 AD3d 442-43 [1st Dept 2009]).
No end-run via “the board” as a collective: A plaintiff whose claims against individual directors or the corporation have been dismissed cannot revive them by suing “the board” as a collective defendant.
General Associations Law § 13 inapplicable: A corporate board is not an “unincorporated association,” so it cannot be sued via a representative defendant under that statute (see Board of Mgrs. of the 28 Cliff St. Condominium v Maguire, 191 AD3d 25, 28 [1st Dept 2020]).

Analysis

Statutory Framework and Corporate Structure

The Court anchors its reasoning in the Business Corporation Law:

BCL § 202(a)(2): Private corporations may “sue and be sued in all courts” and “participate in actions or proceedings… as natural persons.” This confers juridical status and litigation capacity on the corporation.
BCL § 701: The business of a corporation is conducted by its board of directors. The board is a governance organ—a “group of individuals elected by the shareholders” to manage the company (citing Matter of Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530, 536 [1990]). But the statute does not grant the board independent juridical existence or capacity to be sued apart from the corporation.

The Court highlights a familiar corporate-law principle: a board is an organ of the corporate person, not a separate legal person. The BCL’s grant of personhood and litigation capacity to corporations does not extend to boards as standalone entities.

Precedents and Authorities Cited

Matter of Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530 (1990): Cited for the role of a co-op board as the managerial body of the corporation, whose decisions are generally reviewed under the business judgment rule. Levandusky contextualizes the board’s function but does not transform the board into a separate juridical entity.
Stromberg v East Riv. Hous. Corp., 82 Misc 3d 871 (Sup Ct, NY County 2023): A trial-level decision concluding “no basis exists to treat the board of a cooperative corporation as a juridical entity distinct from the cooperative itself,” after reviewing statutory and case law. The First Department aligns with this reasoning.
Biales v 10 E. End Ave. Owners, Inc., 85 Misc 3d 1202(A), 2025 NY Slip Op 50074(U) (Sup Ct, NY County 2025): Another trial-level authority recognizing that a board, as such, lacks separate capacity to be sued. The First Department cites it approvingly.
Flarey v Youngstown Osteopathic Hosp., 151 Ohio App 3d 92, 2002-Ohio-6899, 783 NE2d 582 (7th Dist 2002): Persuasive out-of-state authority capturing the practical problem with treating boards as juridical entities:
“[I]t would be nonsensical to hold a board of directors liable as a collective entity. A board of directors may not own property in its own name. Thus, any judgment against it could not be recovered from the collective group. Furthermore, a judgment against the collective entity cannot apply to the individual, as the individuals are liable only if they participated in the tortious conduct. Thus, such a suit would be, for all practical purposes, pointless.”
Federal analogues: Siegler v Sorrento Therapeutics, Inc., 2021 WL 3046590 (Fed. Cir. 2021); Heslep v Americans for African Adoptions, Inc., 890 F Supp 2d 671 (N.D.W. Va. 2012); Team Sys. Int'l, LLC v Haozous, 2015 WL 2131479 (W.D. Okla. 2015); Lopez-Rosario v Programa Seasonal Head Start/Early Head Start de la Diocesis de Mayaguez, 245 F Supp 3d 360 (D.P.R. 2017), aff’d 847 F App’x 9 (1st Cir. 2021). These cases reflect the broader doctrinal understanding that boards lack separate capacity to be sued.
Dau v 16 Sutton Place Apt. Corp., 205 AD3d 533 (1st Dept 2022): The motion court relied on Dau to permit suit against a co-op board. The First Department clarifies that Dau does not stand for that proposition; in Dau the question of a board’s capacity to be sued was not raised or decided. The same clarification applies to Fuisz v 6 E. 72nd St. Corp., 222 AD3d 402 (1st Dept 2023) (see n.1).
Weinreb v 37 Apts. Corp., 97 AD3d 54 (1st Dept 2012); Peacock v Herald Sq. Loft Corp., 67 AD3d 442-43 (1st Dept 2009): These decisions confirm that breach of fiduciary duty claims may be brought against individual directors, underscoring the availability of proper defendants other than the board as a unit.
Board of Mgrs. of the 28 Cliff St. Condominium v Maguire, 191 AD3d 25 (1st Dept 2020): Cited to explain the contours of “unincorporated associations” and why General Associations Law § 13 does not enable suit against a corporate board through a representative defendant. A corporate board is not an unincorporated association.

Legal Reasoning

The Court’s reasoning is straightforward and rooted in corporate personhood and statutory capacity:

No statutory capacity for boards: The BCL authorizes a corporation to sue and be sued (BCL § 202[a][2]). It does not extend this capacity to a board of directors. Although the board manages the corporation (BCL § 701), it does so as the corporation’s governing organ, not as a free-standing juridical person.
Practical inability to satisfy judgments: Echoing Flarey, a “board” does not own property or maintain separate assets from the corporation. As a result, a judgment against a board would be largely unenforceable and would create confusion over whether, and how, it binds individuals who did not personally engage in actionable conduct.
Channeling claims to proper defendants: New York law provides alternative, appropriate defendants:
- The corporation for corporate obligations (e.g., proprietary lease disputes, injunctive or declaratory relief governing corporate action).
- Individual directors for fiduciary breaches where adequately pled, such as bad faith, self-dealing, or conduct outside the business judgment rule (see Weinreb, Peacock, Levandusky).
Refusing an end-run: After earlier dismissals in the same litigation (214 AD3d 491), the plaintiff re-cast his fiduciary duty claim against “the board.” The Court holds that a plaintiff cannot revive dismissed claims simply by substituting the collective label “board” for corporate and individual defendants. Capacity cannot be manufactured by caption.
Representative theory rejected: Plaintiff sought to add the board president under General Associations Law § 13, which authorizes suits against unincorporated associations via representatives. The Court holds that a corporate board is not an unincorporated association, so § 13 is inapplicable. Leave to amend is therefore denied.

Impact and Implications

This opinion squarely resolves a pleading ambiguity in New York’s First Department and will have immediate, practical consequences:

Pleading practice in co-op litigation: Plaintiffs should not name a “board of directors” as a standalone defendant. Claims must be directed to the corporation and/or to specific directors (or officers) where legally warranted and adequately pled.
Motion practice: Defendants can challenge claims against a “board” under CPLR 3211(a)(3) (lack of capacity to be sued) and/or 3211(a)(7) (failure to state a claim), citing this decision and the absence of statutory capacity in the BCL.
Injunctive and declaratory relief: Orders compelling or restraining “board” action should be directed at the corporation (whose officers and directors implement corporate action), rather than at the “board” as a named defendant. The corporation remains the proper entity to bind.
No representative workaround: Plaintiffs cannot leverage General Associations Law § 13 by naming a board president or other director in a purported representative capacity for the “board.” The statute governs unincorporated associations, not corporate boards.
Insurance and indemnification clarity: Directing claims to the corporation and individual insured persons aligns with typical D&O insurance structures and corporate indemnification regimes, reducing uncertainty over who is a defendant and how coverage attaches.
Alignment with broader doctrine: The ruling harmonizes New York practice with the widely accepted understanding, reflected in other jurisdictions, that a board is an organ of the corporate person and not a separate juridical litigant.
Cabining prior case citations: Litigants can no longer cite Dau or Fuisz to justify naming a “board” as a defendant; those cases did not decide capacity, and this opinion clarifies the law.

Complex Concepts Simplified

Capacity to sue or be sued: “Capacity” refers to a party’s legal status allowing it to be a litigant. Corporations have capacity under BCL § 202(a)(2). A “board of directors” does not; it is a managerial organ of the corporate person, not a separate legal person.
Board vs. corporation: The corporation is the entity that owns property, enters contracts, pays judgments, and bears liabilities. The board directs the corporation’s affairs; its actions are corporate actions but do not transform the board into an independent entity.
Business Judgment Rule (BJR): Under Levandusky, courts defer to board decisions made in good faith, within the scope of authority, and in the corporation’s legitimate interests. The BJR goes to the merits and standard of review; this case concerns capacity and proper defendants, not whether the BJR protects particular board decisions.
Unincorporated associations and GAL § 13: Section 13 allows suit against associations that aren’t corporations (e.g., certain clubs or groups) by naming a representative. A corporate board is not such an association; it is embedded in the corporate structure governed by the BCL.
Individual director liability: Directors can face personal liability for fiduciary breaches when plaintiffs allege particularized facts showing bad faith, self-dealing, or actions outside lawful authority. A conclusory, collective claim against “the board” does not satisfy this standard.

Case-Specific Context and Procedural Notes

Prior Tahari decision (214 AD3d 491 [1st Dept 2023]): Most fiduciary-duty claims against the corporation and individual directors were dismissed for failure to state a claim. Plaintiff’s attempt to plead breach of fiduciary duty against “the board” in a later complaint was a strategic shift that the Court has now rejected as impermissible.
Leave to amend: Although CPLR 3025(b) favors liberality, leave may be denied where the amendment is palpably insufficient or futile. Because a board lacks capacity to be sued and GAL § 13 does not apply, adding the board president as a representative defendant would be futile; the Court therefore denies the cross-motion.
Proper captioning going forward: Plaintiffs should caption claims against the cooperative corporation (e.g., “860 Fifth Avenue Corporation”) and, when warranted and adequately pled, against identified directors (e.g., “John Doe, as Director,” or by name), rather than “Board of Directors of [Corp.].”

Practice Pointers

When seeking relief about board action: Name the corporation. Frame relief to bind the corporation’s officers and agents to act or refrain from acting consistent with the court’s order. Avoid naming “the board” as a defendant.
Fiduciary-duty claims: If suing individual directors, plead specific, non-conclusory facts showing bad faith, self-dealing, discrimination, or actions outside the scope of authority. Mere disagreement with policy decisions will invoke the business judgment rule and risk dismissal.
Service and enforcement: Direct service and enforcement mechanisms at the corporation and the individual defendants, ensuring that any judgment is enforceable against a juridical entity with assets or, where appropriate, against individuals who engaged in actionable conduct.
Don’t rely on Dau or Fuisz to name a board: Those cases did not decide the capacity question; Tahari now squarely forecloses board-as-entity pleading in the First Department.

Conclusion

Tahari v. 860 Fifth Avenue Corporation settles a recurring procedural question in New York cooperative and corporate litigation: a corporate board of directors is not a suable entity distinct from the corporation. Claims must be directed at the corporation itself and, where appropriate and sufficiently pled, at individual directors. The First Department’s opinion harmonizes New York practice with corporate-law fundamentals and persuasive authorities from other jurisdictions, dispels misreadings of prior First Department decisions, and forecloses attempts to use the “board” label to revive dismissed claims or to invoke General Associations Law § 13. The ruling offers clear guidance for future pleadings, motion practice, and the structuring of injunctive or declaratory relief in disputes over corporate governance—particularly in the cooperative housing context.