Orange Orchestra Props. v. Gentry Unlimited, Inc.
| Decision Date | 23 December 2021 |
| Docket Number | Index 100198/2019 |
| Parties | ORANGE ORCHESTRA PROPERTIES, LLC, TIMOTHY MOORE, individually, and in his capacity as a member of ORANGE ORCHESTRA PROPERTIES, LLC, shareholder of GENTRY UNLIMITED, INC., and MARY MOORE, individually, and in her capacity as a member of ORANGE ORCHESTRA PROPERTIES, LLC, shareholder of GENTRY UNLIMITED, INC., Plaintiff, v. GENTRY UNLIMITED, INC., and THE BOARD OF DIRECTORS OF GENTRY UNLIMITED, INC., Defendants. MOTION SEQ. No. 005 |
| Court | New York Supreme Court |
DECISION + ORDER ON MOTION
JOHN J. KELLEY JUDGE.
The following e-filed documents, listed by NYSCEF document number (Motion 005) 111, 112, 113, 114, 115, 116, 117, 118, 119 120, 121, 122, 123, 124, 125, 127, 128, 129, 130, 131, 132 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144 145 were read on this motion to/for DISMISSAL .
This is an action for declaratory and injunctive relief against a residential cooperative corporation and the board of directors of that corporation and to recover damages against those defendants for, inter alia, trespass to property and unlawful eviction, arising from the defendants' denial of the plaintiffs' proposed plans to alter and rehabilitate a cooperative apartment unit and its concomitant termination of the underlying proprietary lease. The defendants move pursuant to CPLR 3211(a) to dismiss the third amended complaint based on a defense founded upon documentary evidence (CPLR 3211[a][1]), lack of standing (CPLR 3211[a][3]), and for failure to state a cause of action (CPLR 3211[a][7]), the latter based, among other things, on the contention that the business judgment rule applicable to residential cooperative corporations bars the plaintiffs' claims. The plaintiffs oppose the motion. The motion is granted only to the extent that (a) the complaint is dismissed insofar as asserted by Mary Moore for lack of standing, (b) all causes of action save the eighth cause of action are dismissed insofar as asserted by Timothy Moore for lack of standing, and (c) the tenth cause of action is dismissed only insofar as asserted by the plaintiff Orange Orchestra, LLC (Orange), against the defendant Gentry Unlimited, Inc. (Gentry) for failure to state a cause of action. The motion is otherwise denied.
Orange the owner of shares allocated to an apartment in a complex owned by Gentry, a residential cooperative corporation. The defendant The Board of Directors of Gentry Unlimited, Inc. (the board), denied Orange's application for permission to alter, renovate, and rehabilitate that apartment by relocating gas pipes, and installing plumbing and other water-using fixtures and appliances in a room immediately above a room in another apartment in which no such fixtures were installed, a so-called "wet-over-dry" configuration. Initially, the plaintiffs, who were originally petitioners/plaintiffs, commenced a hybrid CPLR article 78 proceeding and plenary action against the defendants and several individual board members, seeking judicial review of the board's determination to deny permission to construct the wet-over-dry configuration and make the other proposed alterations, and also sought declaratory, monetary, and injunctive relief. The defendants, who were then respondents/defendants in the hybrid proceeding and action, moved to dismiss the petition/complaint (SEQ 001). While that motion was pending, the plaintiffs withdrew the petition/complaint, and instead served and filed an amended complaint on April 26, 2019, rendering that motion academic.
In their amended complaint, the plaintiffs alleged that, in November 2014, Orange purchased shares of Gentry that had been allocated to Apartment 1F in a building located at 23 West 88th Street in Manhattan, and was issued a proprietary lease on November 17, 2014. They further alleged that the plaintiffs Timothy Moore and Mary Moore were the sole members of Orange, and intended to reside in the subject unit as their primary residence. The plaintiffs alleged, however, that none of them was provided with a copy of any relevant house rules. They asserted that they retained an architect to prepare plans for rehabilitation and renovation of the apartment. They further alleged that the proprietary lease, although requiring board approval for the relocation of water and steam risers and plumbing fixtures by tenant shareholders, provided that such approval may not unreasonably be withheld; they further averred that the proprietary lease dispensed with the need for board approval where the proposed alterations were to be made by a holder of unsold shares, that is, a person or entity who purchased shares from the sponsor for investment purposes and has chosen not to reside in the unit, or a successor purchaser of those shares who did not intend to become a tenant shareholder. As relevant here, the plaintiff additionally alleged that the proprietary lease permitted tenant shareholders to remove refrigerators, air conditioners, dish washers, washing machines, and ranges, without board approval, as long as the removal required no structural alterations and caused no permanent damage to the unit. The plaintiffs further asserted that the board routinely approved various plans submitted by other coop owners in the building.
In the amended complaint, the plaintiffs went on to assert that they submitted their proposed architectural plans to the board, which included an "offset" consisting of a four-foot rerouting of three gas lines, only one of which was active, that their plans did not require structural alterations and would cause no permanent damage, and that five architects certified to the propriety of the plans. They contended that, in 2015, they executed the required alteration agreement and submitted it to the board, and that the board initially approved both the architectural plans and the agreement, but, 14 months later, rescinded its approval, and voted on September 11, 2016 to prohibit the plaintiffs from continuing with any renovation and improvement work and to require the execution of a replacement alteration agreement. According to the allegations in the amended complaint, beginning in November 2017, the board excluded Timothy Moore, formerly a board member, from its meetings, and unlawfully voted to suspend work on the plaintiff's apartment via proxy. In addition, the plaintiffs alleged that the board compelled them to retain architects and other professionals favored by the board. They further asserted that, during the time when their contractors were able to undertake work in the apartment, they located and replaced ceiling beams that had been charred by a previous fire, and that the replacement of the beams was Gentry's responsibility, as the beams were not within the subject apartment, but a structural element of the building itself.
As set forth in the amended complaint, the plaintiffs alleged that the board, on May 14, 2018, delivered a notice terminating Orange's proprietary lease, based on Orange's purported default under the terms of the lease. The plaintiffs asserted, however, that Orange cured any purported breach of the proprietary lease, and that the termination notice was thus a nullity. They also claimed that, as shareholders in Gentry, they requested to inspect Gentry's books and records, but were denied access. In addition, they asserted that Gentry entered into the subject apartment without their knowledge and approval.
In the first cause of action, the plaintiffs sought a judgment declaring that the termination notice is null and void. In the second cause of action, the plaintiffs sought judgment declaring that their alteration plans must be approved. In the third cause of action, the plaintiffs sought a permanent mandatory injunction compelling the board to approve their plans. In the fourth cause of action, the plaintiffs sought damages for trespass. In the fifth cause of action, the plaintiff's sought damages for unlawful entry and eviction, trebled pursuant to RPAPL 853. In the sixth cause of action, the plaintiff sought a mandatory injunction compelling Gentry to provide access to its records concerning its procedures for hiring of contractors and construction professionals. In the seventh cause of action, the plaintiff sought a mandatory injunction compelling Gentry to provide access to its financial books and records. In the eighth cause of action, the plaintiffs sought a judgment declaring that the defendants violated their operating instruments by excluding Timothy Moore from their meetings. In the ninth cause of action, the plaintiffs sought an award of attorneys' fees, as permitted in paragraph 28 of the proprietary lease and Real Property Law § 234.
By order dated September 10, 2019, the court (Edmead, J.) granted the plaintiff's motion for leave to serve and file a second amended complaint to the extent of permitting them to name an additional board member as a party defendant, but denied the branches of the motion seeking to add a tenth cause of action, sounding in fraud, and an eleventh cause of action for disgorgement of certain revenue. The plaintiffs served and filed the second amended complaint on October 1, 2019. It essentially repeated the factual allegations set forth in the amended complaint, and added only allegations that the additional board member engaged in activities similar to those in which the other board members were alleged to have been engaged.
By order dated November 6, 2019, the court (Edmead, J.) denied those branches of the plaintiff's motion that sought to amend the second amended complaint so as to add causes of action sounding in...
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