## Facts

- Harbor House, Incorporated (defendant) owned and operated a residential cooperative apartment building.
- Ownership and occupancy were structured through cooperative shares and a proprietary lease for a specific apartment.
- The cooperative’s governing arrangement limited transfers: a cooperative unit could be sold only with the consent of the cooperative/shareholders under the approval provisions in the cooperative documents.
- Conrad Jones (plaintiff), a Harbor House shareholder, entered into a contract with Florence McNulty (plaintiff), also a shareholder, for Jones to purchase McNulty’s cooperative interest and take over McNulty’s proprietary lease for her apartment.
- McNulty’s apartment was located directly beneath Jones’s apartment.
- Jones sought the additional apartment to meet the needs of his expanding family.
- Harbor House disapproved the proposed transfer because of Jones’s stated intended use of the additional apartment.
- Jones and McNulty sued, seeking injunctive relief to compel approval, alleging Harbor House unreasonably withheld consent.
- After trial, the court found that Harbor House acted reasonably and in good faith in denying approval and entered judgment for Harbor House.
- Jones and McNulty appealed to the Connecticut Supreme Court.

## Issues

1. Whether Harbor House unreasonably withheld approval of the proposed transfer of cooperative ownership and the related proprietary lease based on Jones’s intended use of the apartment.
2. Whether the plaintiffs were entitled to injunctive relief compelling the cooperative to approve the transfer.

## Decision

- The Connecticut Supreme Court affirmed the trial court’s judgment for Harbor House.
- The Court upheld the finding that Harbor House acted reasonably and in good faith when it refused to approve the sale.
- The Court therefore denied the requested injunction compelling the cooperative to consent to the transfer.

## Legal Principles

- Cooperative apartments may lawfully condition transfers of shares and proprietary leases on the cooperative’s consent when the restriction is part of the cooperative’s governing instruments.
- When a cooperative has authority to approve or disapprove a transfer, its decision must be made in good faith and must be reasonable rather than arbitrary.
- A party seeking to compel consent by injunction must show that the cooperative’s refusal violated the applicable standard (lack of good faith and/or unreasonableness).
- Appellate review gives weight to the trial court’s factual findings on good faith and reasonableness when supported by the record.

## Conclusion

The Connecticut Supreme Court held that Harbor House’s refusal to approve Jones’s purchase of McNulty’s cooperative interest was a reasonable, good-faith exercise of its approval power under the cooperative arrangement, so the plaintiffs were not entitled to an injunction compelling the transfer.


Jones v. O'Connell, 189 Conn. 648, 458 A.2d 355 (1983)