By Joseph Ax
NEW YORK (Reuters) - Board members at The Dakota, one of New York City's most exclusive residences, can be personally sued for alleged racial discrimination after they rejected a prominent money manager's attempt to double the size of his apartment, a state appeals court ruled on Tuesday.
The Dakota, once home to former Beatle John Lennon and site of his 1980 murder, is known for its celebrity residents and exacting standards, having turned down a number of well-known applicants over the years.
Alphonse "Buddy" Fletcher, a hedge fund manager, sued the building and individual board members in 2011, claiming the board had turned down his offer to buy an adjoining apartment because of his race. Fletcher is black.
The lawsuit claims the board rejected his purchase to retaliate against Fletcher because he had stood up for Jewish applicants who had been called "Jewish mafia" by board members.
The board has claimed that Fletcher, who is a former board president, did not have the finances to buy the apartment. Fletcher is also suing them for defamation in connection with that assertion.
On Tuesday, the Appellate Division, First Department, declined to dismiss discrimination claims against two board members, Bruce Barnes and Peter Nitze, saying they could be held personally liable for any discriminatory action the cooperative corporation took.
The court dismissed several other counts against The Dakota and Barnes and Nitze on various legal grounds. A number of other claims were not at issue in Tuesday's appeal.
"The board made a good faith judgment. Fletcher was not financially qualified to purchase a second apartment," said Christine Chung, a lawyer for the board. She said The Dakota and its board members were confident the case would be found to be baseless.
A lawyer for Fletcher did not respond to a request for comment on Tuesday.
In 1991, Fletcher sued his former firm, Kidder Peabody, for race discrimination, eventually winning a settlement. His wife, Ellen Pao, a partner at Kleiner Perkins Caufield & Byers, sued the California venture capital firm in May for sexual harassment and discrimination. The company has said the lawsuit has no merit.
The case is Fletcher et al. v. Dakota, Inc., et al., Appellate Division, First Department, No. 6630.
(Reporting by Joseph Ax; Editing by Noeleen Walder)