Rokof Assocs. v. Vill. Place Corp.
| Decision Date | 21 November 2022 |
| Docket Number | Index No. 154737/2021,MOTION SEQ. No. 001 |
| Citation | 2022 NY Slip Op 33909 (U) |
| Parties | ROKOF ASSOCIATES, Plaintiff, v. VILLAGE PLACE CORP., BOARD OF DIRECTORS OF VILLAGE PLACE CORP. Defendant. |
| Court | New York Supreme Court |
DECISION + ORDER ON MOTION
The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18 19,20,21,22,23,24,25 were read on this motion to/for DISMISSAL.
In this hybrid special proceeding and plenary action, defendants Village Place Corp. (Village Place) and Board of Directors of Village Place Corp. (the Board) (together, defendants) move pursuant to CPLR 3211 (a) (1), (3) and (7), 3016 (b) and 7804 (f), to dismiss the verified petition and complaint brought by plaintiff Rokof Associates.
The following facts are drawn from the verified petition and complaint (the petition/complaint) unless otherwise noted and are assumed to be true for purposes of this motion. Village Place is a cooperative corporation which owns an apartment building located at 35 East 12th Street, also known as 48-50 East 13th Street, in Manhattan (NY St Cts Elec Filing [NYSCEF] Doc No. 1, petition/complaint ¶¶ 3 and 6). The Board is the elected board of directors for Village Place (id., ¶ 4).
Plaintiff a domestic partnership, was the sponsor of the conversion of the Building to cooperative ownership (id., ¶¶ 2-3 and 5-6). According to the offering plan dated May 15, 1977 (the Offering Plan), plaintiff was comprised of two partners, Stanley R. Rosenberg (Stanley) and Absalom Kofman (Absalom)[1] (NYSCEF Doc No. 10, William J. Geller [Geller] affirmation, Ex B at 20). The Offering Plan provided that and that the "Sponsor has reserved for issuance to it the 350 shares comprising the store, second floor and certain of the cellar space in the buildings"[2] (id. at 8 and 18). The first and second floors were designated units 1 and 2, respectively (id. at 7). Paragraph 13 (F) states, in part, that:
"[a]nything to the contrary in the body of the Proprietary Lease notwithstanding, the provisions herein contained shall take precedence and apply to the lease agreement between Village Place Corp., the proprietary lessor, and Rokof Associates, or such other entity or person designated as the proprietary lessee ... of units 1 and 2, which comprise the ground and second floors of the Building ... and the designated and appurtenant cellar space"
(id. at 12).
A description of the site in the "Sponsor's Statement of Present Building Condition" (the Building Report) states that "[t]he Street (1st) floor is built full on the lot except for a small courtyard on the East side trapazoidal [sic] in shape" (id. at 22). The courtyard (the Courtyard) is "at grade" (id. at 29). The report indicates that "[t]he first floor consists of a one room store" (id. at 31). The cellar is "one large storage room with smaller rooms for storage and the vaults which run out under both sidewalks" and contains "a boiler area, enclosed oil storage tank, [and] maintenance area" (id.). As for air conditioning, "[individual tenants have provided their own window air conditioners at various floors" (id. at 37).
According to the petition/complaint, plaintiffs members retained the unsold shares and the proprietary lease for the northern portion of the first floor between the A and B Lines and the appurtenant cellar-level spaces in the Building (NYSCEF Doc No. 1, ¶ 6). The preamble to the proprietary lease dated August 30, 1977 (the 1977 Lease) provided that plaintiff, as lessee, owned the 180 shares allocated to the "leased space," defined as the "unit space known as First Floor located on the 1st Floor of the Building" (NYSCEF Doc No. 11, Geller affirmation, Ex at 5). The term for "the leased space, with the equipment therein, if any, and the appurtenances" ran from June 29, 1977 until December 31, 2027 (id.). The 1977 Lease set annual rent at "a sum equal to that proportion of such cash requirements for such year, which the number of shares allocated to the Leased Space bears to the total number of shares of the Lessor issued and outstanding, and in force, on the date of the determination of such cash requirements of the Lessor" (id. at 6). Paragraph 47 of the rider to the 1977 Lease provided that "notwithstanding anything hereinbefore set forth to the contrary, Lessee shall have the right to occupy and utilize the cellar space appurtenant to the First Floor," and paragraph 50 specified that "the First Floor and the appurtenant cellar space may be occupied or utilized by Lessee for any business purpose permitted by law" (id. at 33) (block capitalization removed).
Stock certificate no. 33, dated May 2, 1983, reflected that "Absolom Kofman and Rena Kofman, Jt. Ten. as to an undivided 50%, and Stanley R. Rosenberg and Ruth Rosenberg, Jt. Ten. as to an undivided 50%" owned the 180 shares (NYSCEF Doc No. 12, Geller affirmation, Ex D at 2) (block capitalization removed).
The space described as "unit 1" in the Offering Plan was subsequently divided into two. The seventh amendment to the Offering Plan dated December 20, 1985 (the Seventh Amendment) read, in relevant part:
(NYSCEF Doc No. 13, Geller affirmation, Ex E at 2). The last page of the Seventh Amendment also identified Stanley and Ruth Rosenberg (Ruth) and Absalom and Rena Kofman (Rena) as the "Holders of Unsold Shares and Offerors Hereunder as Successors in interest to Rokof Associates, Sponsor" (id. at 7). The "Offerors" sold the shares allocated to Unit 1A to a religious corporation, B'Nai Israel of New York, and retained the 100 shares allocated to unit IB (the Leased Premises or Unit IB) for themselves (id. at 5 and 12).
Between 1986 and 2014, four additional transfers of title for the 100 shares allocated to Unit IB were made and two proprietary leases were executed. Stock certificate no. 44 dated February 6, 1986 listed Absalom and Rena, as joint tenants with an undivided 50% share, and Stanley and Ruth, as joint tenants with an undivided 50% share, as the owners (NYSCEF Doc No. 12 at 4). Stock certificate no. 92, dated September 15, 2008, reflected that Absalom, Rena, Stanley and Ruth changed the form of ownership from a joint tenancy to a tenancy in common, with each couple owning an undivided 50% interest (id. at 3). Absalom, Rena, Stanley and Ruth, as lessees, then executed a proprietary lease dated September 15, 2008 (the 2008 Lease) for the "unit space known as Apartment 1-B located on the 1st Floor of the Building" for the period September 15, 2008 to December 31, 2047 (NYSCEF Doc No. 2, petition/complaint, Ex A at 7).
Stock certificate no. 104, dated March 28, 2014, listed "Absalom Kofman as to an Undivided 50%, and Stanley R. Rosenberg and Ruth Rosenberg, as TEN COM, as to an undivided 50%" as the owners (id. at 8). Stock certificate no. 105, dated March 28, 2014, reflected that Joav Kofman (Joav) and Gil Kofman (Gil) assumed Absalom's 50% share as tenants in common (id. at 10). Joav, Gil, Stanley and Ruth, as lessees, then executed a proprietary lease, dated March 28, 2014, for Unit IB for the period March 28, 2014 to December 31, 2047 (the 2014 Lease) (NYSCEF Doc No. 14, Geller affirmation, Ex at 9). The 2014 Lease repeated the definition of the "leased space" from the preamble in the 2008 Lease (id.), with an amendment dated September 2, 2010 adding: "the rooms in the Building as partitioned on the date of the execution of this lease designated by the above stated apartment number, together with their appurtenances and fixtures and any closets, terraces, balconies, roof, or portion thereof outside of said partitioned rooms, which are allocated exclusively to the occupant of the Leased Space" (id. at 2). The provision governing the calculation of rent remained unchanged from the 1977 Lease (id. at 10).
In 2018, Village Place sought to amend the form proprietary lease to authorize the Board to license portions of the Building's roof to shareholders who wished to install air conditioning condensers to service their units (NYSCEF Doc No. 1, ¶ 10). The Board allegedly contacted plaintiff for its support in passing the amendment, representing that the amendment would not affect any area in the Building apart from the roof (id., ¶ 11). By letter dated April 10, 2019, Village Place asked each shareholder to vote whether it was in favor of the proposed amendment (NYSCEF Doc No. 3, petition/complaint, Ex B at 3). By correspondence dated June 28, 2019, Village Place informed the shareholders that the amendment (the Roof Amendment) had passed (NYSCEF Doc No. 15, Geller affirmation, Ex G at 1). Plaintiff alleges the amendment would not have passed without its support (NYSCEF Doc No. 1, ¶ 11). At present, shareholders who maintain a condenser on the Building's roof pay a $125 monthly...
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