Opinion
152648/2019
06-18-2020
185 WEST END AVENUE OWNERS CORP., Plaintiff, v. Naomi FREISTAT and Dr. Samuel Gold, Defendants.
Seyfarth Shaw LLP, New York, NY (Elizabeth D. Schrero, Alan L. Kazlow, and Tracee E. Davis of counsel), for plaintiff. Epstein & Weil, LLC, New York, NY (Judith H. Weil of counsel), for defendants.
Seyfarth Shaw LLP, New York, NY (Elizabeth D. Schrero, Alan L. Kazlow, and Tracee E. Davis of counsel), for plaintiff.
Epstein & Weil, LLC, New York, NY (Judith H. Weil of counsel), for defendants.
Gerald Lebovits, J.
In this declaratory judgment action, plaintiff 185 West End Avenue Owners Corp. (Owners) moves for partial summary judgment under CPLR 3212. For the following reasons, the motion is denied.
BACKGROUND
Owners is a New York corporation that owns the residential portion of a mixed-use condominium apartment building (the building) located at 185 West End Avenue in the County, City and State of New York. See verified complaint, ¶¶ 1-3. Defendants Naomi I. Freistat (Freistat) and Samuel H. Gold (Gold; together, defendants) are the respective owners of Professional Units 1A and 1F on the building's first-floor commercial portion. Id. , ¶¶ 7-8.
On March 26, 1987, Owners and the building's sponsor, non-party 185 West End Avenue Associates (the Sponsor), filed a declaration (the Declaration) with the Office of the Register of the City of New York that established non-party 185 West End Avenue Condominium (the Condominium). See notice of motion, Unis aff, ¶ 2; exhibit A. The building's residential portion was previously operated as a cooperative corporation, but is now controlled by the Condominium's board of managers (the Board) along with the rest of the building. Id.
Owners states that the building's 29 floor "residential unit" (i.e. , its portion) originally contained 432 apartments, and that there are ten "professional units" on the first floor and a basement "garage unit," both originally owned by the Sponsor. See notice of motion, Unis aff, ¶ 3; exhibit A. Owners notes that apartments 9J and 9K in its "residential unit" were combined into a single superintendent's apartment some time after the Declaration was filed (unit 9J/K). Id. , ¶ 4. Owners asserts that it continues to own unit 9 J/K pursuant to the terms of both the Declaration and the deed that it subsequently executed with the Sponsor. Id. ; exhibits A, B.
Owners further states that, on August 20, 1993, the Board "unilaterally" executed a first amendment to the Declaration (the First Amendment) that purported to exclude unit 9J/K from the building's "residential unit" and instead to reclassify it as part of the building's "common elements" for the purposes of establishing the building's "common interests" (i.e., the amount of square footage that is devoted to certain building-wide activity from which the building's common charges are calculated). See notice of motion, Unis aff, ¶¶ 5-9. Owners claims that executing and filing the First Amendment was improper for a number of reasons. See plaintiff's mem of law at 1-15. Owners also claims that the Board never implemented the changes contained in the First Amendment, and asserts that it only became aware of the First Amendment in 2018, when it was unable to complete a sale of unit 9J/K because of title issues. See notice of motion, Unis aff, ¶¶ 10-13.
As a result of the foregoing, Owners states that it prepared a proposed Second Amendment to the Declaration, which declares that the First Amendment was void ab initio , and circulated it to the Board (the Second Amendment). See notice of motion, Unis aff, ¶¶ 12-13; exhibit G. Owners notes that, pursuant to both the terms of the Declaration and Real Property Law (RPL) § 339-i (2) (the "Condominium Law"), the building's Unit Owners must unanimously consent to the Second Amendment in order for it to be effective. Id. , ¶ 13. Owners further notes that only Freistat and Gold have withheld their consent to the Second Amendment to date, and asserts that their reasons for doing so are invalid. Id. , ¶¶ 13-18.
For their part, Freistat and Gold respond that the Second Amendment contains inaccuracies in the calculation of the "common interests" and "common elements" of their respective units which will result in the imposition of unduly large common charges unless they are corrected. See Freistat aff in opposition, ¶¶ 18-25. Freistat and Gold also state that Owners has not provided them with certain floor plans and other documents that they requested. Id. , ¶¶ 26-29. Finally, they assert that they cannot obtain relief from the Board, because Owners dominates the Board so completely that it is merely Owners' corporate alter ego. Id. , ¶¶ 4-17.
Whatever the truth of that latter allegation, Owners commenced this action on March 12, 2019 by filing a summons and complaint that seeks a declaratory judgment against Freistat and Gold only. See verified complaint. Owners did not name either the Condominium or the Board as a defendant. Freistat and Gold each filed answers with counterclaims on May 28, 2019. See answer (Freistat); answer (Gold). Owners then filed this motion for partial summary judgment on September 26, 2019 (motion sequence number 001).
DISCUSSION
When seeking summary judgment, the moving party bears the burden of proving, by competent, admissible evidence, that no material and triable issues of fact exist. See e.g. Winegrad v. New York Univ. Med. Ctr. , 64 NY2d 851, 853 (1985) ; Sokolow, Dunaud, Mercadier & Carreras v. Lacher , 299 AD2d 64, 70 (1st Dept 2002). Once this showing has been made, the burden shifts to the party opposing the motion to produce evidentiary proof, in admissible form, sufficient to establish the existence of material issues of fact which require a trial of the action. See e.g. Zuckerman v. City of New York , 49 NY2d 557, 562 (1980) ; Pemberton v. New York City Tr. Auth. , 304 AD2d 340, 342 (1st Dept 2003). A court may issue a declaratory judgment "as to the rights and other legal relations of the parties to a justiciable controversy whether or not further relief is or could be claimed." CPLR 3001 ; see e.g. Jenkins v. State of NY, Div. of Hous. & Community Renewal , 264 AD2d 681 (1st Dept 1999). A court may appropriately grant declaratory relief to a condominium owner that submits documents which support its right to summary judgment and there are no triable issues of fact raised in opposition. See e.g. , 600 W. 115th St. Corp. v. 600 W. 115th St. Condominium , 180 AD2d 598 (1st Dept 1992).
Here, Owners first cite to paragraph XVI (f) of the Declaration, which sets forth "the Sponsor's Right to Amend the Declaration," and provides as follows:
"Sponsor or its designee shall have the right without vote or consent of other Unit Owners, the Condominium Board or the holders of Unit mortgages, to execute or (on its request) to require the Condominium Board to execute and record in the Office of the New York City Register in New York County, ... an amendment or amendments to this Declaration (together with such other documents, plans and maps as may be required to effectuate the same) to reflect any changes in Units and the reapportionment of Common Interests resulting therefrom, made by Sponsor or its designee(s) in accordance with the Paragraph, including any changes necessary to create a new superintendent apartment ."
See notice of motion, Unis aff, ¶ 7; exhibit G (emphasis added).
Owners then cite the portion of the Condominium Law providing that:
"The common interest appurtenant to each unit as expressed in the declaration shall have a permanent character and shall not be altered without the consent of all unit owners affected , expressed in an amended declaration.... The common interest shall not be separated from the unit to which it appertains...."
RPL § 339-i (2) (emphasis added).
Owners finally cite the portion of paragraph XV (c) of the Declaration that provides as follows:
"If any provision of this Declaration ... is invalid under, or would cause this Declaration ... to be insufficient to submit the Property to the provisions of the Condominium Act, such provision shall be deemed deleted from this Declaration ...."
See notice of motion, Unis aff; exhibit G.
Owners argue that the First Amendment was executed in reliance on a portion of the Declaration that violates the Condominium Law (i.e., paragraph XVI [f] ), and that they are consequently entitled to a declaration that the First Amendment is "void ab initio and unenforceable." See plaintiff's mem of law at 10-11.
Defendants respond that other portions of the Declaration also violate the Condominium Law, and that Owners is not entitled to its requested declaration because both the Declaration and the First Amendment are void, unenforceable and in need of further amendment. See defendants' mem of law at 12-14, 16-17. Defendants particularly allege that both the Declaration and the First Amendment contain inaccurate statements of the square footage of Professional Units 1A and 1F which has resulted in the ongoing miscalculation of the units' "common interests" and "common elements" in violation of RPL § 339-i, and the imposition of improper common charges on them. Id. They also allege that Owners' proposed Second Amendment does not correct these miscalculations, and argue that a declaratory judgment to annul the First Amendment and instead enforce either the Declaration or the Second Amendment would improperly continue the original violation of RPL § 339-i. Id.
Owners reply that defendants' argument amounts to an "unrelated square footage claim," and assert that they are entitled to the declaratory judgment they seek because "defendants do not contest that the First Amendment violates the Condominium Act." See plaintiff's reply mem at 2-4.
Having carefully reviewed the Declaration, the First and Second Amendments, the building's By-Laws and the Condominium Act, the court finds that the parties' arguments all miss their mark. Owners is not entitled to summary judgment on its request for declaratory relief.
First, Owners' initial argument mischaracterizes the circumstances of the Condominium's adoption of the First Amendment. By citing paragraph XVI (f) of the Declaration and stating that the execution of the First Amendment was a "unilateral" act, Owners implies that the Sponsor forced through the defective First Amendment in violation of the requirement in RPL § 339-i (2) that "common interest[s] ... shall not be altered without the consent of all unit owners affected." However, this is belied by the "Secretary's Certificate" attached to the First Amendment which recites that
"The First Amendment to the Declaration dated August 20, 1993 annexed hereto and made apart hereof was approved and executed by the Condominium Board by unanimous vote of the Condominium Board and at the request of the Sponsor as provided in Article XVI (f) of the Declaration."
See notice of motion, Unis aff; exhibit C (emphasis added). This documentary evidence indicates that the Board adopted the First Amendment in compliance with the rule in RPL § 339-i (2) that common interests may only be altered with "the consent of all unit owners affected." Further, paragraph XVI (f) of the Declaration specifically authorized the Sponsor to request that it be amended to create a superintendent's apartment. Id. Thus, the documentary evidence refutes Owners' insinuation that the Sponsor and/or the Board committed a procedural violation. Therefore, the court rejects Owners' argument as unfounded.
Second, Owners' initial argument mischaracterizes the terms of the Declaration. They cite only the portion of paragraph XV (c), which provides
"If any provision of this Declaration ... is invalid under, or would cause this Declaration ... to be insufficient to submit the Property to the provisions of the Condominium Act, such provision shall be deemed deleted from this Declaration ...."
See notice of motion, Unis aff; exhibit A. This gives the impression that the Declaration authorizes the "deletion" of any of its provisions that are found to violate the Condominium Act; including the "Sponsor's unilateral voting provision" contained in the aforementioned paragraph XVI (f).
The whole of paragraph XV (c), however, actually states as follows:
"If any provision of this Declaration or of the Condominium By-Laws is invalid under, or would cause this Declaration or the Condominium By-Laws to be insufficient to submit the Property to the provisions of the Condominium Act, such provision shall be deemed deleted from this Declaration or the Condominium By-Laws, as the case may be, for the purpose of submitting the Property to the provisions of the Condominium Act, but shall nevertheless be valid and binding upon, and shall inure to the benefit of, the owners of the Property and their heirs, executors, administrators, legal representatives, successors and assigns, as covenants running with the Land and with every part thereof and interest therein under the other applicable law to the extent permitted under such applicable law with the same force and effect as if, immediately after the recording of this Declaration or the Condominium By-Laws, all Unit Owners had signed and recorded an instrument agreeing to each such provision as a covenant running with the land . If any provision that is necessary to cause this Declaration or the Condominium By-Laws to be sufficient to submit the Property to the provision of the Condominium Act is missing from this Declaration or the Condominium By-Laws, then such provision shall be deemed included as a part of this Declaration or the Condominium By-Laws, as the case may be, for the purpose of submitting the Property to the provisions of the Condominium Act."
Id. (emphasis added). This language actually states that any provision of the Declaration that does not comport with the Condominium Act shall only be "deleted" for the purpose of "submitting the Property to the provisions of the Condominium Act" (i.e., completing the building's registration process with the Office of the Register of the City of New York), but that such provision shall nevertheless continue to be enforced in the governing of the building, and shall forever be treated "as a covenant running with the land." Regardless of whether this language is enforceable (since it does appear to condone violations of the Condominium Act), it completely contradicts Owners' assertion that the Declaration authorizes the "Sponsor's unilateral voting provision" in paragraph XVI (f) to be "deleted" and Owners' subsequent suggestion that such deletion would require that the First Amendment be annulled. Thus, because Owners' initial argument is belied by the plain language of the documents and statutes from which it drew the above selective, misleading quotes, the court rejects that argument.
This is not the only instance where Owners appears to have made deceptive representations about the Declaration's terms. In a March 9, 2018 letter to the owners of all of the building's professional units, Owners alleged that the Declaration required the Sponsor to exercise its right to reclassify the superintendent's apartment as a common element within one year of the Declaration's registration, but that the Sponsor failed to do so. See Freistat aff in opposition, exhibit 4. However, after extensively reviewing the Declaration itself, the court was unable to find any provision that set forth such a one-year time limitation on the Sponsor's right.
Owners' remining arguments are similarly meretricious. They assert that "the [Board] cannot divest plaintiff of its exclusive ownership and possession of the super's apartment as part of the residential unit," and that "unit ownership must be conveyed by deed and no such conveyance was made." See plaintiff's mem of law at 11-13. However, as previously discussed, paragraph XVI (f) of the Declaration authorizes the Sponsor to request the reclassification of the superintendent's apartment and the corresponding reapportionment of the building's "common interests," and the Secretary's Certificate appended to the First Amendment indicates that the Board approved the Sponsor's request to do so by unanimous vote. See notice of motion, Unis aff, exhibit C. Thus, Owners' suggestion that "the Board" illegally divested it of ownership of the superintendent's apartment is inaccurate and disingenuous.
Further, to the extent that Owners alleges that the Sponsor or the Board acted improperly, and seeks a declaration to that effect, Owners should have named them as defendants in this action. Owners did not do so. New York law has long required that a court must refuse to render a declaratory judgment in the absence of necessary parties. CPLR 1001 (a) ; see e.g. , Wood v. City of Salamanca , 289 NY 279 (1942) ; Jennings v. Chase Home Fin., LLC , 136 AD3d 444 (1st Dept 2016). Thus, because Owners' proposed declaratory judgment seeks to challenge and/or compel actions by unnamed, necessary parties, the court declines to make such a declaration.
It is impossible to tell from the parties' submissions whether the Sponsor still retains any ownership interest in the building's professional units and/or garage unit which would entitle it to voting rights and/or representation on the Board.
Owners also contend that the First Amendment must be nullified because of "erroneous increases in square footage and/or common interests," coupled with the Board's "failure to file amended floor plans and/or implement the First Amendment's terms." See plaintiff's mem of law at 13-15. The court notes that defendants' opposition papers contain similar contentions that the Declaration itself, as well as the First and Second (proposed) Amendments, all include inaccurate measurements of the building's floor space which result in persistently incorrect calculations of "common interests," "common elements" and "common charges." See defendants' mem of law at 11-14.
These arguments, however, are nothing more than contentions by counsel. It is black letter law that "[a]n attorney's affidavit is of no probative value on a summary judgment motion unless accompanied by documentary evidence which constitutes admissible proof." Adam v. Cutner & Rathkopf , 238 AD2d 234, 239 (1st Dept 1997). Here, neither party has presented any documentary evidence to support its assertions about the building's floor space. Therefore, the court discounts both parties' respective arguments as unsupported. The court similarly discounts defendants' opposition argument, that "plaintiff has failed to provide requested discovery," as unavailing, since it does nothing to meet defendants' burden of proof with respect to the issues of the actual, correct square footage of their respective units and/or of the building as a whole). See defendants' mem of law at 17-18.
Finally, Owners argue that "defendants' affirmative defenses and counterclaims do not defeat [its] entitlement to partial summary judgment." See plaintiff's mem of law at 16. The court notes that, although defendants' respective answers both contain counterclaims for declaratory and other relief, their opposition papers do not request summary judgment on any of those counterclaims, and neither do they request that the court enter a declaratory judgment contrary to the one which Owners propose. See answer (Freistat), ¶¶ 45-168; answer (Gold), ¶¶ 43-83; defendants' mem of law at 11-19. Instead, they suggest several possible revisions to the proposed second amendment. See Freistat aff in opposition, ¶¶ 30-32. However, it is plain that the issue of the veracity of defendants' counterclaims is not before the court in the instant motion. Therefore, the court discounts Owners' final argument. Accordingly, the court concludes that Owners has failed to meet its burden of proving that it is entitled to the declaratory judgment it seeks. Owners' motion for partial summary judgment is denied.
Accordingly, for the foregoing reasons, it is hereby
ORDERED that plaintiff's motion for summary judgment under CPLR 3212 is denied.