Co-op Passenger Ship Can Expel Resident for Misconduct

Facts: A passenger ship operated in the same manner as a cooperative building, housing a private residential community for 165 residents. Resident owned shares to three units costing almost $3 million. A female crew member and a minor female guest complained that resident had sexually harassed them. Pending investigation, the board of directors expelled resident from the ship and sued him. The board asked the court for an order permanently barring resident from the ship. Resident, in turn, asked that he be allowed to return. Court: Landlord wins. The board acted within its authority under the business judgment rule, as well as the ship rules and residence agreement. The board was responsible for ensuring the safety of all those onboard. And, because residents are confined together in a closed space while the ship travels between ports, the board is required to provide a higher standard of care than is a board of a cooperative building. But the board must pay resident the value of his residency rights as of the date he was expelled.

World of Residensea II Ltd. v. Villasenor: NYLJ, 3/29/07, p. 22, col. 3 (S.D.N.Y.; Carter, J)