Bd. of Managers of the Crest Condo. v. City View Gardens Phase II, LLC

• Citation: 35 Misc.3d 1223,2012 N.Y. Slip Op. 50826,951 N.Y.S.2d 85
• Decision Date: 11 May 2012
• Docket Number: No. 4873/2011.,4873/2011.
• Parties: The BOARD OF MANAGERS OF the CREST CONDOMINIUM, Plaintiff, v. CITY VIEW GARDENS PHASE II, LLC, Boymelgreen Developers, LLC, Shaya B. Developers, Inc., R & I City Corp., Ronald Fatato, Itzhak Katan, Jeshayahu Boymelgreen, Lin & Associates, Emily Lin, M.A., Day Engineering, PC, Abraham Joselow, PE, PC, Defendants.
• Court: United States State Supreme Court (New York)

35 Misc.3d 1223
951 N.Y.S.2d 85
2012 N.Y. Slip Op. 50826

The BOARD OF MANAGERS OF the CREST CONDOMINIUM, Plaintiff,
v.
CITY VIEW GARDENS PHASE II, LLC, Boymelgreen Developers, LLC, Shaya B. Developers, Inc., R & I City Corp., Ronald Fatato, Itzhak Katan, Jeshayahu Boymelgreen, Lin & Associates, Emily Lin, M.A., Day Engineering, PC, Abraham Joselow, PE, PC, Defendants.

No. 4873/2011.

Supreme Court, Kings County, New York.

May 11, 2012.

Adam Leitman Bailey PC, New York, for plaintiff.

David Berg, Berg Law PLLC, Brooklyn, for defendants.

CAROLYN E. DEMAREST, J.

This action by The Board of Managers of the Crest Condominium (“Board”) alleges, inter alia, breach of contract, arising out of the construction of a newly erected building. Defendants City View Gardens Phase II, LLC (“City View”), Boymelgreen Developers, LLC (“Boymelgreen Developers”), Shaya B. Developers, Inc. (“Shaya”), R & I City Corp. (“R & I”), Ronald Fatato (“Fatato”), Itzhak Katan (“Katan”), Jeshayahu Boymelgreen (“Boymelgreen”), collectively referred to as “Defendants”, move to dismiss each of the seventeen causes of action in the complaint, pursuant to CPLR 3211(a)(1), (3), and (7).

BACKGROUND

City View was the sponsor of The Crest Condominium, located at 302 Second Street, Brooklyn, New York (“Condominium”). The building consists of 68 residential housing units, and one non-residential garage unit, with an alleged capacity of 32 parking spaces. Defendant Lin & Associates was the architectural firm retained “to prepare a report describing the construction” of the Condominium premises, pursuant to an agreement with City View. Defendant Emily Lin is alleged to be the principal of Lin & Associates (collectively, “Defendant Architect”). City View submitted the offering plan for the condominium project to the Attorney General, which was accepted on April 2, 2007. The offering plan was certified by defendants Fatato, Katan, and Boymelgreen, who are the principals of City View. Boymelgreen is also an alleged member of Boymelgreen Developers which is alleged to be a “controlling sponsor entity”. Shaya and R & I are alleged to be “principals” of City View.

According to the Complaint, under the offering plan, City View was to “perform such work and supply such materials, or will cause the same to be performed and supplied, as is necessary in order to complete the Building with a quality of construction comparable to the currently prevailing local standards.” The Sponsor was “obligated to bear all costs and expenses incurred in connection with completing construction of the Building substantially in accordance with the plans and specifications.” The complaint further alleges that under the offering plan, City View “will attempt to obtain a Permanent Certificate of Occupancy for the Building within 2 years after the first closing 1/4 but in any event, before the expiration of the applicable Temporary Certificate of Occupancy, as the same may be renewed, replaced or extended.” It is also alleged that City View was not in compliance with General Business Law 352–e (2–b) and 352–h, to maintain a special trust account containing funds certified by the Architect as reasonably necessary to complete the work needed to obtain a Permanent Certificate of Occupancy.

Plaintiff alleges that shortly after moving into their units in the Condominium, owners began experiencing “conditions indicating that the design and construction of their individual units and the building was defective and not constructed in a skillful manner, in that the workmanship and materials used in the construction did not meet the specific standards of the Building Code.” The unit owners and the Board gave notice to City View of these defects, and subsequently retained Howard L. Zimmerman Architects, P.C. and Jack Green Associates Consulting Engineers (collectively “HLZA”) to perform an investigation of the physical condition of the premises. On April 12, 2010, HLZA issued a report detailing various defects and violations relating to the construction of the Condominium. After the filing of a formal complaint against City View and a site visit by the New York State Attorney General, City View “acknowledged the presence of construction defects and agreed to remedy the same.” Plaintiff alleges that “only minor patch work was ever commenced.”

According to the Complaint, City View has also “failed to pay invoices in connection with the cost of the construction of the Building, causing mechanic's liens to be placed against the property” by multiple contractors. ¹

DISCUSSION

Defendants, in support of their instant motion, argue that each of the seventeen causes of action alleged by Plaintiff in the complaint must be dismissed pursuant to CPLR 3211(a)(1), (3), and (7). Defendants also cite to CPLR 3013, 3014, and 3016(b), asserting that dismissal is also required as the allegations in the pleading are not sufficiently particular to give the court and parties notice of the transactions or occurrences intended to be proved, as well as the material elements of each cause of action.

Where a motion to dismiss is brought pursuant to CPLR 3211(a)(1) on the grounds that the action is barred by documentary evidence, such motion may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law (Leon v. Martinez, 84 N.Y.2d 83, 88 [1994];Rubinstein v. Salomon, 46 A.D.3d 536, 539, 849 N.Y.S.2d 69 [2d Dept 2007] ).

“When assessing the adequacy of a complaint in light of a CPLR 3211(a)(7) motion to dismiss, the court must afford the pleadings a liberal construction, accept the allegations of the complaint as true, and provide [the] plaintiff 1/4 the benefit of every possible favorable inference” (AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co., 5 N.Y.3d 582, 591 [2005], quoting Leon, 84 N.Y.2d at 87, 614 N.Y.S.2d 972, 638 N.E.2d 511;see also Goshen v. Mutual Life Inc. Co. of NY, 98 N.Y.2d 314, 326 [2002] ). Whether a plaintiff can ultimately establish its allegations “is not part of the calculus to determine a motion to dismiss” (EBC, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11, 19 [2005] ). “Further, any deficiencies in the complaint may be amplified by supplemental pleadings and other evidence” (AG Capital Funding Partners, L.P., 5 N.Y.3d at 591, 808 N.Y.S.2d 573, 842 N.E.2d 471;see also Rovello v. Orogino Realty Co., 40 N.Y.2d 633, 635–636 [1976] ). Such a motion, pursuant to CPLR 3211(a)(7), must fail if the facts as alleged fit within any cognizable legal theory ( see Leon, 84 N.Y.2d at 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511;Morone v. Morone, 50 N.Y.2d 481, 484 [1980];Rovello, 40 N.Y.2d at 634, 389 N.Y.S.2d 314, 357 N.E.2d 970).

As a threshold matter, Defendants assert that the Plaintiff Board lacks the legal capacity pursuant to CPLR 3211(a)(3), to bring this action, arguing that Plaintiff is no more than a group of “disgruntled” unit owners. With respect to a cause of action relating to the sale of condominium units, a “condominium board has standing to make such a claim on behalf of the individual condominium unit owners by reason of explicit statutory authority, namely, Real Property Law § 339–dd, under which the board of managers of a condominium is empowered to maintain an action on behalf of the condominium owners with respect to any cause of action' relating to common elements of more than one unit” ( see Residential Bd. of Managers of Zeckendorf Towers v. Union Square–14th Street Assoc., 190 A.D.2d 636, 594 N.Y.S.2d 161 [1st Dept 2003] ). The Complaint alleges numerous defects affecting the common areas, as well as multiple units on different floors, thus satisfying the commonality elements required by the statute. Further, Plaintiff has submitted an affidavit showing unanimous consent of the Board members to commence the action in the form of individually signed letters dated February 28, 2011 that are purportedly in compliance with the Condominium's by-law § 2.17(B).² Accordingly, Defendants' contention that plaintiff lacks standing is unsubstantiated and the motion to dismiss for lack of standing is denied except as discussed below.

Defendants also argue that the individual defendants, Fatato, Katan, and Boymelgreen, cannot be held liable to Plaintiff on a breach of contract theory, due to their lack of privity with Plaintiff, citing, Retropolis, Inc. v. 14th Street Dev. LLC, 17 A.D.3d 209, 210, 797 N.Y.S.2d 1 [1st Dept 2005] and Collins v. E–Magine, 291 A.D.2d 350, 351, 739 N.Y.S.2d 15 [1st Dept 2002].

It is well settled within the Second Department that a plaintiff may seek damages for a breach of contract against the individual principals of the sponsor, based upon certification of the offering plan and the incorporation of the terms of the offering plan in a specific provision of the purchase agreement ( see Hamlet on Olde Oyster Bay Home Owners Assn., Inc. v. Holiday Org., Inc., 65 AD3d 1284, 1288 [2d Dept 2009]; Tiffany at Westbury Condominium v. Marelli Dev. Corp., 40 A.D.3d 1073, 1075–1076, 840 N.Y.S.2d 74 [2d Dept 2007]; Kikirov v. 335 Realty Assoc. LLC, 31 Misc.3d 1212[A] [Sup Ct, Kings County 2010]; Board of Mgrs. Of Woodpoint Plaza Condominium v. Woodpoint Plaza LLC, 24 Misc.3d 1233[A] [Sup Ct, Kings County 2009] ). Accordingly, as the Complaint asserts such certifications were contained in the offering plan, which was incorporated by reference into the purchase agreements, the motion to dismiss for lack of privity as to the individual defendants Fatato, Katan and Boymelgreen is denied.

Plaintiff's first cause of action alleges breach of contract against Defendants City View, Boymelgreen Developers, Shaya, R & I, Fatato, Katan, and Boymelgreen with respect to the defects in the Condominium's construction. Defendants assert that Plaintiff has not properly pled pursuant to CPLR 3013, asserting that the complaint fails to adequately set forth, in nonconclusory language, the...