Biondi v. Beekman Hill House Apartment Corp.

Simone Demou was a shareholder in the Beekman Hill House Apartment Corporation (Beekman) (defendant), a residential co-op. Demou sought to sublet her unit to Gregory Broome, a Black man. Broome was financially eligible, but his application was denied by Nicholas Biondi (plaintiff), Beekman’s president, and the rest of the Beekman board after Biondi learned that Broome was Black. Demou and Broome sued Biondi and Beekman for violating state and federal civil-rights laws. The jury awarded Demou and Broome both compensatory and punitive damages. The trial court additionally found that Biondi and the Beekman board had acted in bad faith toward Demou and Broome and that their actions were not in the best interest of the co-op. While the case was pending appeal, the parties reached a settlement whereby Biondi agreed to pay a reduced amount of punitive damages. Biondi then sought indemnification from Beekman. Beekman sought to dismiss Biondi’s indemnification claim, arguing that public policy forbade indemnification for punitive damages. The trial court denied Beekman’s motion. The appellate division reversed, finding that (1) Biondi was seeking indemnification for punitive damages, which was against public policy; and (2) Biondi was seeking indemnification for actions conducted in bad faith in violation of Business Corporation Law (BCL) § 721. Biondi appealed.