Judge Dismisses Stromfeld Litigation

The litigation that shareholder and former Board of Directors member Dianne Stromfeld brought against North Shore Towers following the 2007 Board elections has been dismissed.
As an incumbent during the 2007 election, Stromfeld lost to former Board President Chuck Robbins by 862 share votes. A recount was not granted after a Board vote that resulted in a four-four tie. Stromfeld has said that she decided to file the lawsuit after reading a quote from Robbins that said anyone wishing to have a recount would have to take the matter to court.
The short form order of the New York Supreme Court Queens County case states that Stromfeld was seeking to set aside the 2007 election; remove Robbins from the Board and instead put herself on it; obtain records related to the election; prohibit those elected, Phyllis Goldstein, Robbins, Murray Lewinter and Robert Ricken, from acting as board members; and pay for her legal fees.
The lawsuit was dismissed by Justice Marguerite A. Grays on May 15. In her decision, Grays said that, “Petitioner’s allegations regarding the supervision of the election by AAA Administrator, therefore, are insufficient to state a basis for setting aside the June 21, 2007 election. Moreover, since none of the alleged irregularities, even if they existed, would change the outcome of the election, these irregularities fail to state a claim to set aside the election.”
“I think it was expected,” Towers counsel Errol Brett said of the dismissal. “I don’t think there was a case to begin with but she has her right to have her day in court.”
Regardless of the case’s dismissal, Stromfeld said that she felt vindicated by the judge’s decision.
“Any case is going to be dismissed if it doesn’t come to trial but she found in my favor on the most important issue, which is I have the right to the ballots,” Stromfeld said. “If I had been given the recount since day one this wouldn’t have happened. I feel fully vindicated.”
Although Grays dismissed the case, her ruling did state that since election records count as corporate records, shareholders have the right to inspect them. Grays wrote, “Although the shareholders may have believed that voting would proceed by secret ballot, this is not provided for in the bylaws… Petitioner, thus, may seek to inspect and make extracts of the June 21, 2007 election records.” However, Brett said that the court found she did not bring the right procedure to see the ballots and proper process would have to be brought for a decision to be made on seeing them. The decision states that the petitioner can seek an order that would compel an inspection, but that it has to be done as an order to show cause rather than through a special proceeding.
Robbins said that he felt justice had been served. He also said that this decision and a 2001 dismissal of a different election-related case show that the election process at North Shore Towers is being “conducted in a manner that has merit.”
“I feel that the election system in America clearly dictates that the person that receives the most votes wins. It doesn’t say what percentage of votes,” Robbins said. “It really says that the person with the most votes wins. Ms. Stromfeld did not acquire the most votes and that’s simply why she lost.”
At this point in time, Stromfeld said that she has not decided if she will take any further action. Although Brett said that a notice of appeal has been filed and that he received it in the mail around June 13, when asked if she and her attorneys had filed one, Stromfeld said that she had not spoken to her attorney and said “what he’s actually done I have no idea.”
The legal fees of the corporation totaled $86,000. As a potential witness Brett recused himself, and the Towers hired Steven Schlesinger to represent the corporation.
“I think the legal fees were realistic considering what was at stake,” Robbins said.
Stromfeld questioned where the oversight was on the assessment of the fees.
“I would like the board to investigate the exorbitant fees that Steven Schlesinger charged for a case that never came up for trial. There were no depositions. We were barely in court for between an hour and an hour and a half,” Stromfeld said. “How does he justify a fee that’s probably more than a criminal attorney would charge on a case that went to trial?”