Buchman v. 117 E. 72Nd St. Corp.

• Citation: 2023 NY Slip Op 32900 (U)
• Docket Number: Index No. 656460/2021
• Decision Date: 11 August 2023
• Parties: PHYLLIS BUCHMAN, Plaintiff v. 117 EAST 72ND STREET CORP., RICHARD STERNE, NICHOLAS ACUAVELLA, CHARLES AYRES, PHILLIP LASKAWAY, STEPHEN \ LESSING, LISA MCCARTHY, TERAK ABDEL- MEGUID, ROBERT PINCUS, JEAN GOUTAL, FORM ARCHITECTURE, FORMARCH INTERIORS INC., and SEAN WEBB, Defendants
• Court: United States State Supreme Court (New York)

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2023 NY Slip Op 32900(U)

PHYLLIS BUCHMAN, Plaintiff
v.
117 EAST 72ND STREET CORP., RICHARD STERNE, NICHOLAS ACUAVELLA, CHARLES AYRES, PHILLIP LASKAWAY, STEPHEN \ LESSING, LISA MCCARTHY, TERAK ABDEL- MEGUID, ROBERT PINCUS, JEAN GOUTAL, FORM ARCHITECTURE, FORMARCH INTERIORS INC., and SEAN WEBB, Defendants

Index No. 656460/2021

Supreme Court, New York County

August 11, 2023

Unpublished Opinion

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For Plaintiff John J. Malley Esq. Smith Buss &Jacobs 733 Yonkers Avenue, Yonkers, NY 10704

For Defendants 117 East.72nd Street Corp., Stearne, . Acuavella,.Ayres, Laskaway, Lessing, McCarthy,. Abdel-Mequid, and Pincus Maria Boboris Esq. Braverman Greenspun P.C. 110 East 42nd Street, New York, NY 10017

For Defendant Goutal. Dennis A. Amore Esq. and Scott R. .Matthews Esq. Windels Marx Lane & Mittendorf, LLP 156 West 56th Street, New York, NY 10019

For Defendants Form Architecture, Formarch Interiors Inc., and Webb Patrick Palladino Esq. Milber Makris; Plousadis &Seiden, LLP . 1000 Woodbury Road, Woodbury, NY 11797

DECISION AND ORDER

LUCY BILLINGS, J.S.C.

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Defendants move in three' separate' motions to dismiss this" "action pursuant to C . P. L. R. § 3211(a)(1), (5), and (7). Plaintiff moves to amend her complaint and submits a proposed second amended complaint. Aff. of John J. Malley Ex. B, NYSCEF Doc. No. 58. For the reasons explained below, the court grants plaintiff's motion to amend her complaint (motion no. 003) and, with defendants' consent, applies all three motions for dismissal to the second amended complaint. The court then grants the motion by defendants Form Architecture, Formarch Interiors Inc., and Webb (motion no. 002) to dismiss the claims against these defendants. The court grants in part and denies in part defendant Goutal's cross-motion (motion no.. 004) and the remaining defendants' motion (motion no. 001) to dismiss the claims against Goutal and the remaining defendants.

I. BACKGROUND FACTUAL ALLEGATIONS

Defendant 117 East 72nd Street Corp., a cooperative, owns a residential building at 117 East 72nd Street, New York County. Plaintiff owns shares in the cooperative associated with suites 1W and SR1C on the building's first floor. Plaintiff's husband, now deceased, used those' premises as a medical office for over 50 years. Defendants Sterne, Acuavella, Ayre, Laskaway, Lessing, McCarthy, and Abdel-Meguid are current or former members of the cooperative's Board of .Directors. Defendant Pincus was an employee of the cooperative''S managing agent who served as the

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board's Assistant Secretary.

Defendant Goutal purchased the shares of the cooperative associated with suite IE, also on the building's first floor, on or about January 13, 2015. That suite had long been used as a dermatologist's office. Goutal hired defendants Form Architecture, an architecture firm, Formarch Interiors, and Webb, an architect in the firm, and a shareholder of Formarch Interiors, to renovate suite IE into a residential apartment. These architect defendants submitted to the New York City Department of Buildings (DOB) signed forms and information that misrepresented plaintiff's premises as a residential apartment, rather than a medical office. The Building's Certificate of Occupancy (CO) in 2015 allowed at least one of the suites on the first floor to be used as a professional office. Goutal and Pincus, as the board's Assistant Secretary, signed an application to DOB to convert the professional suites on the first floor to residential apartments, so there would be no professional suites in the building. DOB then issued a CO for the building that limited the use of the entire first floor, including plaintiff's premises, to residential apartments rather than professional office space. Defendants did not provide notice of this change to plaintiff in advance or afterward.

In 2017, when plaintiff attempted to sell the shares associated with her premises, she discovered that the building's

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amended CO barred use of her premises, as a medical office and allowed only residential use. The change reduced the premises' value and required extensive and expensive renovation to convert the premises to residential Use. The cooperative denied plaintiff's request to re-amend the CO to allow use of her premises as a professional office.

II. THE MOTIONS

The first amended complaint claims breach of a fiduciary duty against defendant board members and Pincus.;, aiding and abetting breach of a fiduciary duty against Goutal; fraudulent concealment and negligent misrepresentation against Goutal and the architect defendants; and fraudulent concealment, breach of the covenant of good faith and fair dealing, and promissory estoppel against the cooperative. The first amended complaint also seeks injunctive relief against the cooperative, Goutal, and the architect defendants to apply to re-amend the CO and seeks attorneys' fees against the cooperative pursuant to plaintiff's proprietary lease and New York Real Property Law (RPL) § 234.

The cooperative, its board members, and Pincus (cooperative defendants) move to dismiss, the first amended complaint against them pursuant to C.P.L.R. § 3211(a)(1) and (7) based on plaintiff's proprietary lease, which describes her premises as residential, and her failure to state a claim for which relief may be granted. The architect defendants move to dismiss the

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first amended complaint against them pursuant to C.P.L.R. § 3211 (a) (1), (5)', and (7) on the same bases and based on expiration of the applicable statutes of limitations.

Plaintiff moves to join the Cooperative's Board of Directors as a defendant and amend her 'complaint a second time to claim breach of a fiduciary duty against the board as well as its members. C.P.L.R. §§ 1002(b), 3025(b). Plaintiff also moved for a default judgment against Goutal, who had not yet appeared in this action. Goutal then cross-moved to. file a late response to the first amended complaint and to dismiss it pursuant to C.P.L.R. 3211(a)(1), (7), and (8), based on documentary evidence, failure to state a claim,' and lack of jurisdiction. Plaintiff and Goutal stipulated to withdrawal of her motion and his cross-motion based on a lack of jurisdiction and to consider. Goutal's cross-motion timely and apply the remainder of the cross-motion against the proposed second amended complaint..

III. PLAINTIFF'S MOTION TO JOIN THE BOARD AND AMEND HER COMPLAINT

Plaintiff' seeks to join the Board of Directors of 117 East 72nd Street Corp, as a defendant in her first claim for breach of a fiduciary duty, add 'allegations to support the claim against the new defendant, and correct typographical errors. C.P.L.R. §§ 1002(b), 3025(b). No. party' opposes joinder of the Board of Directors, but the cooperative defendants and architect defendants oppose the amendments as futile because they fail to

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cure the grounds for dismissal in their motions. Both sets of defendants ask to apply their motions to the second amended complaint in the event the court permits the joinder and amendment. In the interest of efficiency, and as the court may permit amendment unless it is "palpably insufficient or clearly devoid of merit," WDF, Inc, v. Trustees of Columbia Univ., 170 A.D.3d 518, 519 (1st Dep't 2019), the court grants the joinder and amendment and applies defendants' motions and the crossmotion to the second amended complaint. C.P.L.R. §§ 1002(b), 3025(b); Kim v. White &Case LLP, 216 A.D.3d 408, 409 (1st Dep't 2023).

IV. STANDARDS APPLICABLE TO. DEFENDANTS' MOTIONS

A motion to dismiss based on documentary evidence pursuant to C.P.L.R. § 3211(a) (1) will succeed only if admissible documentary evidence completely refutes plaintiff's factual allegations, resolving all factual issues as a matter of law. Himmelstein, McConnell, Gribben, Donoghue &Joseph, LLP v. Matthew Bender &Co., Inc., 37 N.Y.3d 169, 175 (2021); Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit &Capital, Inc., 30 N.Y.3d 572, 601 (2017); Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 (2002); VXI Lux Holdco S.A.R.L. v. SIC Holdings, LLC, 171 A.D.3d 189, 193 (1st Dep't 2019). In a motion to dismiss a claim pursuant to C.P.L.R. § 3211(a)(5), based on expiration of the applicable statute of

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limitations, defendants bear the initial burden to establish, prima facie, when plaintiff's claim accrued, and that the time, to sue has expired. MTGLO Invs., LP v. Wozencraft, 172 A.D.3d 644, 644-45 (1st. Dep't 2019); Norddeutsche Landesbank Girozentrale v. Tilton, 149 A.D.3d 152, 158 (1st Dep't 2017); Lebedev v. Blavatnik, 144 A.D.3d 24, 28 (1st Dep't 2016). The burden then shifts to plaintiff to raise an issue whether the claim is timely or the statute of limitations is tolled or otherwise inapplicable.. MTGLO. Invs., LP v. Wozencraft, 172 A.D.3d at 644-45; Norddeutsche Landesbank Girozentrale v. Tilton, 149 A.D.3d at 158.

Upon a motion to 'dismiss the complaint based on its failure to state a claim pursuant to C.P.L.R. § 3211(d)(7), the court accepts plaintiff's allegations as true, liberally construes them/ and draws all reasonable inferences in her favor. Himmelstein, McConnell, Gribben, Donoghue &Joseph, LLP v. Matthew Bender &Co., Inc., 37 N.Y.3d at 175; Connaughton v. Chipotle Mexican Grill, Inc., 29 N.Y.3d 137, 141 (2017); JF Capital Advisors, LLC v. Lightstone Group, LLC, 25 N.Y.3d 759,-764 (2015); Miglino v. Bally Total Fitness of Greater N.Y., Inc., 20 N.Y.3d 342, 351 (2013). Defendants bear the burden to establish that the complaint "fails to state a viable cause of action." Connolly v. Long Island Power Auth,, 30 N.Y.3d 719, 728 (2018). Dismissal is warranted only if the complaint fails to

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allege facts that fit within any cognizable 'legal theory. Sassi v. Mobile Life Support Servs., Inc., 37 N.Y.3d 236, 239 (2021); Faison v. Lewis, 25 N.Y.3d 220, 224 (2015); ABN AMRO Bank, N.V. v. MBIA Inc., 17 N.Y.3d 208, 227 (2011); ...