Opinion
Index No. 154764/12
06-27-2016
THE BOARD OF MANAGERS OF 325 FIFTH AVENUE CONDOMINIUM and 325 FIFTH AVENUE CONDOMINIUM, Plaintiffs, v. CONTINENTAL RESIDENTIAL HOLDINGS LLC, DOUGLASTON DEVELOPMENT LLC, 325 FIFTH AVENUE LLC, 325 FIFTH AVENUE COMMERCIAL LLC, 325 FIFTH AVENUE INVESTORS, LLC, CONTINENTAL PROPERTIES, CLINTON MANAGEMENT LLC, JELB 5TH AVENUE LLC, MARK FISCH, STEVEN FISCH, STEVEN R. CHARNO, JEFFREY E. LEVINE, J.E. LEVINE BUILDER INC., D/B/A LEVINE BUILDERS, THE STEPHEN B. JACOBS GROUP, P.C., STEPHEN B. JACOBS, FAIA, HOWARD I. SHAPIRO & ASSOCIATES CONSULTING ENGINEERS, P.C., JAY P. SHAPIRO, P.E., LAWRENCE KENT SHAPIRO, P.E., CANTOR SEINUK GROUP, P.C., WSP CANTOR SEINUK, I.M. ROBBINS, P.C., MARC ROBBINS, CANTOR & PECORELLA, INC., S&S MANUFACTURING, SKYLINE STEEL CORP., K&M ARCHITECTUAL WINDOW PRODUCTS, INC., EFCO CORPORATION, CROSS COUNTRY CONSTRUCTION, LLC, CROSS COUNTRY CONCRETE, LLC, SILVIAN MARCUS, WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP, FS PROJECT MANAGEMENT, LLC, FIRST SERVICE RESIDENTIAL NEW YORK, LLC, and CANIDO BASONAS CONSTRUCTION CORP., Defendants.
KELLY O'NEILL LEVY, J. :
Motion sequence numbers 002, 003, 004, and 005 are consolidated for disposition.
Wolf Haldenstein Adler Freeman & Herz LLP (Wolf Haldenstein) moves, pursuant to CPLR 3211 (a) (7), for an order dismissing the third, fourth, fifth and sixteenth causes of action, and dismissing the claim for punitive damages (motion sequence number 002).
Continental Residential Holdings LLC, Douglaston Development LLC, 325 Fifth Avenue LLC, 325 Fifth Avenue Commercial LLC, 325 Fifth Avenue Investors LLC, Continental Properties LLC, Clinton Management LLC, JELB 5th Avenue LLC, Mark Fisch, Steven Fisch, Jeffrey E. Levine, J.E. Levine Builder Inc. d/b/a Levine Builders and Steven R. Charno (sponsor defendants) move for an order: pursuant to CPLR 3211 (a) (10) and (5), dismissing so much of the complaint as seeks damages respecting the building's balconies on the ground that a release executed by plaintiffs bars any such claims; pursuant to CPLR 3211 (a) (5) and (8), dismissing the complaint on the ground that the summons with notice failed to give proper notice of plaintiffs' claims and the claims are barred by the statute of limitations; pursuant to CPLR 3211 (a) (1) and (7), dismissing the first and second causes of action as against all of the moving defendants except the sponsor on the ground that such claims are barred by documentary evidence and fail to state a cause of action; and pursuant to CPLR 3211 (a) (1) and (7), CPLR 3016 (b) and 3017 (b), dismissing the third through sixth, fifteenth and sixteenth causes of action as against the sponsor defendants on the ground of want of particularity (motion sequence number 003).
WSP Cantor Seinuk, Cantor Seinuk Group P.C. and Silvian Marcus P.E. (collectively, Cantor Seinuk defendants) move, pursuant to CPLR 3211 (a) (1), (5), and (7) and CPLR 3016 (b), for an order dismissing all claims against them (motion sequence number 004).
FS Project Management LLC and First Service Residential New York Inc. i/s/h/a First Service Residential New York LLC (collectively, FS Project Management) move for an order, pursuant to CPLR 3211 (a) (8), dismissing the complaint, and pursuant to CPLR 3211 (a) (1), (5) and (7), dismissing the third, fourth, fifth, eighth, tenth, eleventh and sixteenth causes of action (motion sequence number 005).
Plaintiff The Board of Managers of 325 Fifth Avenue Condominium (plaintiff) is an association of condominium apartment owners and is responsible for managing the condominium's affairs. This is an action to recover damages for alleged construction defects, including: the balconies, the lack of vertical fire stops, loose support for the suspended piping in the mechanical room, missing or improperly installed floor and deck mounted vibration isolation systems, and improper design of the concrete floor slab in the mechanical penthouse. Prior to commencing this lawsuit, in exchange for the sum of $900,000.00, on May 17, 2011, plaintiff executed a release of its balcony claims against the sponsor defendants.
Plaintiff has also sued; the Board's former counsel, Wolf Haldenstein, for legal malpractice, the Cantor Seinuk defendants, as the engineer of record during the construction of the building, and FS Project Management, which was retained in 2009 by the then-sponsor-controlled Board to investigate the balconies and to supervise replacement of the building's glass panels and reinstall the balcony rails. The defendants have cross-claimed against each other.
The complaint sets forth a total of 16 causes of action. The first and second causes of action against the sponsor defendants are for breach of contract. The third cause of action against all of the defendants is for breach of fiduciary duty. The fourth cause of action against all of the defendants is for fraud. The fifth cause of action against all of the defendants is for constructive fraud. The sixth cause of action against the sponsor defendants is for fraudulent inducement of the release. The seventh cause of action against Cantor Seinuk is for aiding and abetting the fraudulent inducement of the release. The eighth cause of action against FS Project Management is for aiding and abetting fraudulent inducement of the release. The ninth cause of action against FS Project Management is for breach of contract. The tenth cause of action against FS Project Management is for fraud. The eleventh cause of action against FS Project Management is for breach of fiduciary duty. The twelfth, cause of action against FS Project Management is for breach of contract. The thirteenth cause of action against non-movant Basonas Construction Corp. is for breach of contract. The fourteenth cause of action against Wolf Haldenstein is for legal malpractice. The fifteenth cause of action against the sponsor defendants is for a declaratory judgment. The sixteenth, and final cause of action, against all of the defendants is for civil conspiracy.
The court will dispose of each motion sequence number in order.
In support of its motion to dismiss (motion sequence number 002), Wolf Haldenstein argues that plaintiff's causes of action for breach of fiduciary duty, fraud, constructive fraud, and civil conspiracy are duplicative of plaintiff's legal malpractice claim, and are not pled with sufficient particularity. It also argues that there is no tort of conspiracy, and plaintiff is not entitled to punitive damages.
In opposition, plaintiff argues that Wolf Haldenstein breached its fiduciary duty to the condominium when it allowed the sponsor-designated members of the Board - who installed Wolf Haldenstein as general counsel - to infect the negotiations process.
On a motion to dismiss a complaint for legal insufficiency, the court accepts the facts alleged as true and determines simply whether the facts alleged fit within any cognizable legal theory (Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 178 [2011]). The pleading is to be liberally construed, according the allegations the benefit of every possible favorable inference (Ovitz v Bloomberg L.P., 18 NY3d 753, 758 [2012]). Dismissal of a complaint on the ground of documentary evidence is warranted where the evidence submitted conclusively establishes a defense as a matter of law (150 Broadway N.Y. Assoc., L.P. v Bodner, 14 AD3d 1, 5 [1st Dept 2004]).
Much of the following legal discussion will be applicable to all of the motions.
The breach of fiduciary duty, fraud, and constructive fraud claims, based upon Wolf Haldenstein's alleged failure to abide by general professional standards, must be dismissed, as they are all merely redundant of the legal malpractice claim. The alleged breaches "arose out of the same facts as the legal malpractice claim and did not involve any damages that were separate and distinct from those generated by the alleged malpractice" (Cosmetics Plus Group, Ltd. v Traub, 105 AD3d 134, 143 [1st Dept 2013]). Plaintiffs fail to plead their causes of action for fraud with sufficient specificity (CPLR 3016 [b]). No additional promise or duty on the part of Wolf Haldenstein is alleged which would extend beyond the duty a law firm owes its client.
Nor is a fraud claim supported by plaintiff's conclusory allegations that Wolf Haldenstein was engaged in a scheme to deceive. Those allegations merely evidence plaintiffs' dissatisfaction with the sum of money they received for executing the release.
In addition, New York does not recognize a conspiracy to commit a tort as a separate cause of action (Brackett v Griswold, 112 NY 454, 467 [1889]).
Finally, punitive damages are not available in an ordinary legal malpractice case (Walker v Sheldon, 10 NY2d 401, 405 [1961]). The pleading elements required to state a claim for punitive damages as an additional and exemplary remedy when the claim arises from a breach of contract are: (1) defendant's conduct must be actionable as an independent tort; (2) the tortious conduct must be of an egregious nature; (3) the egregious conduct must be directed to plaintiff; and (4) it must be part of a pattern directed at the public generally (New York Univ. v Continental Ins. Co., 87 NY2d 308, 316 [1995]). Clearly, the conduct alleged against Wolf Haldenstein is neither egregious, nor directed at the public generally.
Therefore, Wolf Haldenstein's motion, pursuant to CPLR 3211 (a) (7), for an order dismissing the third, fourth, fifth and sixteenth causes of action, and dismissing the claim for punitive damages (motion sequence number 002), must be granted.
In support of their motion to dismiss (motion sequence number 003), the sponsor defendants make numerous arguments including the following: (i) so much of the complaint as seeks damages respecting the building's balconies should be dismissed as barred by the release; (ii) plaintiff's summons with notice is jurisdictionally defective and therefore, plaintiff's claims are all time-barred; (iii) the complaint's first and second causes of action alleging breach of contact should be dismissed for lack of privity as against all of the moving defendants except Continental Residential Holdings LLC; (iv) the complaint's causes of action for fraud and breach of fiduciary duty are duplicative of the breach of contract claims because they are based on the same allegations and seek the same damages; (v) the fifteenth cause of action for a declaratory judgment should be dismissed for lack of a controversy; and (vi) the sixteenth cause of action for conspiracy should be dismissed.
Plaintiff makes the following arguments in opposition to the motion: (i) the release does not bar the plaintiff's claims because the plaintiff has alleged a separate fraud and there are questions of fact concerning the timing and context of the misrepresentations, precluding dismissal at this stage; (ii) the summons with notice adequately apprises the defendants of the nature of the action; (iii) the fraud claims adequately plead specifics and reasonable reliance; (iv) the alter ego allegations are legally sufficient at this stage; (v) the tort claims are not duplicative; (vi) plaintiff has timely pled the existence of a fiduciary duty and a claim for aiding and abetting; (vii) plaintiff has adequately alleged a claim for civil conspiracy; and (viii) plaintiff has adequately alleged a claim for a declaratory judgment.
The May 17, 2011 release provides:
"Board of Managers of 325 Fifth Avenue Condominium, a [sic] unincorporated association organized under the laws of the state of New York, as "RELEASOR," in consideration of the sum of NINE HUNDRED THOUSAND AND 00/100 ($900,000.00) Dollars and other good and valuable consideration received from Continental Residential Holdings LLC, Douglaston Development LLC, 325 Fifth Avenue LLC, 325 Fifth Avenue Commercial LLC, 325 Investors, LLC, Clinton Management LLC, JELB 5th Avenue LLC, Mark Fisch, Steven Fisch, Jeffrey E. Levine, J.E. Levine Builder Inc. d/b/a Levine Builders, The Stephen B. Jacobs Group, P.C., Howard I. Shapiro & Associates, WSP Cantor Seinuk, S&S Manufacturing, Skyline Steel Corp. K&M Architectural Window Products, Inc., EFCO Corporation, and Cross Country Construction (collectively, "RELEASEES"), receipt of which is hereby acknowledged, releases and discharges RELEASEES, and RELEASEES' heirs, executors, administrators, successors and assigns, from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialities, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty, or equity (collectively, "CLAIMS") that RELEASOR, or its successors and assigns, ever had, now have Or hereafter can, shall or may have against RELEASEES, for upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of this release, but limited solely to matters hereto relating to or arising solely from the construction, design, manufacture, maintenance, use or abuse, installation of the balconies, balcony glass, railings
and support frames/attachments, and the connection of the foregoing assemblies to the building structure, or the effect of the foregoing assemblies upon the window systems of the building in the 325 Fifth Avenue Condominium."
"[A] valid release constitutes a complete bar to an action on a claim which is the subject of the release" (Global Mins. & Metals Corp. v Holme, 35 AD3d 93, 98 [1st Dept 2006]). A defendant has the initial burden of establishing that it has been released from any claims (Mangini v McClurg, 24 NY2d 556, 563 [1969]). "'A release is a contract, and its construction is governed by contract law'" (Cardinal Holdings, Ltd. v Indotronix Intl. Corp., 73 AD3d 960, 962 [2d Dept 2010], quoting Lee v Boro Realty, LLC, 39 AD3d 715, 716 [2d Dept 2007] and one "that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms" (Alvarez v Amicucci, 82 AD3d 687, 688 [2d Dept 2011]).
In support of their motion to dismiss, the sponsor defendants proffer a prima facie case that the action should be barred on the ground of the release. By presenting the May 17, 2011 release, the sponsor defendants meet their initial burden of establishing a defense as a matter of law. Therefore, the burden shifts to plaintiff to establish or plead an issue as to whether the release bars this action.
A broadly drafted release bars fraud claims "unless the release was itself induced by a separate fraud" (Centro Empresarial Cempresa S.A. v América Móvil, S.A.B. de C.V., 17 NY3d 269, 277 [2011]). The court finds there is an issue, sufficient to survive a CPLR 3211 motion to dismiss, as to whether or not plaintiff, by signing the release, effectively released its balcony claims. Although a signed, clear, and unambiguous release between sophisticated and counseled parties is binding and "should never be converted into a starting point . . . for litigation" (id. at 276 [2011]), whether in fact there are grounds, such as whether the release itself was induced by a separate fraud, is a matter that cannot be safely decided simply on a pleading motion, but requires a further exploration of the facts, whether by way of summary judgment or trial (Bronson v Hansel, 16 NY3d 850, 851 [2011]).
In addition, where, as here, the balance of the construction defect claims (albeit involving much less money), the legal malpractice claim, and the cross claims are all going to continue, it will not be an undue burden on the sponsor defendants to also continue to litigate the May 17, 2011 balcony release.
Turning to the summons with notice, CPLR 305 (b) provides that "[i]f the complaint is not served with the summons, the summons shall contain or have attached thereto a notice stating the nature of the action and the relief sought." An insufficient description of the nature of the action is a jurisdictional defect (Drummer v Valeron Corp., 154 AD2d 897 [4th Dept 1989]).
Here, the notice attached to the summons served on the sponsor defendants provides that
"the nature of this action . . . is to recover damages resulting from, among other things, said defendants' breach of contract, breach of warranty, fraud, negligence, and negligent misrepresentation in connection with the construction, marketing, and sale of condominium units."
Contrary to the sponsor defendants' assertion, this notice is sufficient. It includes a clear and concise statement of the plaintiffs' claims and fairly apprises the sponsor defendants that plaintiffs' claims are based on the construction defects. Therefore, the motion to dismiss the complaint on the ground that the summons with notice fails to give proper notice must be denied.
The complaint's breach of contract claims (first and second causes of action) must be dismissed against all of the sponsor defendants except the sponsor itself, Continental Residential Holdings LLC. The breach of contract claims against all defendants except Continental Residential Holdings LLC must be dismissed, since plaintiff was not in privity with any of the other defendants (Leonard v Gateway II, LLC, 68 AD3d 408 [1st Dept 2009]; Residential Bd. of Mgrs. of Zeckendorf Towers v Union Sq.-14th St. Assoc., 190 AD2d 636, 637 [1st Dept 1993]). Plaintiff's factual allegations in support of piercing the corporate veil against the sponsor defendants are insufficient to survive this motion to dismiss (CPLR 3013; Shisgal v Bown, 21 AD3d 845, 848 [1st Dept 2005]). No facts are alleged showing either complete control over Continental Residential Holdings LLC by the other sponsor defendants, or abuse of the corporate form to commit a wrong (Board of Mgrs. of the Gansevoort Condominium v 325 W. 13th, LLC, 121 AD3d 554 [1st Dept 2014]).
Contrary to the plaintiff's assertion, its fraud and breach of fiduciary duty causes of action against the sponsor defendants are duplicative of the breach of contract causes of action. There are no additional allegations beyond those found in the breach of contract claims.
Breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389, [1987]). Allegations based on defects in construction of a condominium sound in breach of contract rather than tort (Sutton Apts. Corp. v Bradhurst 100 Dev. LLC, 107 AD3d 646, 648 [1st Dept 2013]; Board of Mgrs. of the Chelsea 19 Condominium v Chelsea 19 Assoc., 73 AD3d 581, 582 [1st Dept 2010]). A tort claim for misrepresentation is not separate from a breach of contract claim where the plaintiff fails to allege a breach of any duty independent from contractual obligations (Greenman-Pedersen, Inc. v Levine, 37 AD3d 250, 251 [1st Dept 2007]). The claims are duplicative of the breach of contract claims as they are based on the same allegations and seek the same damages (Eden Roc, LLLP v Marriott Intl., Inc., 116 AD3d 486 [1st Dept 2014]).
Contrary to the plaintiff's assertion, there is no fiduciary relationship between the plaintiff and the sponsor defendants (Board of Mgrs. of the Chelsea 19 Condominium v Chelsea 19 Assoc., 73 AD3d 581, 582 [1st Dept 2010] citing Dembeck v 220 Cent. Park S., LLC, 33 AD3d 491, 492 [1st Dept 2006]). Here, plaintiff fails to allege any legal duty that would give rise to an independent tort cause of action. Thus, the fraud and breach of fiduciary duty claims are duplicative of the breach of contract claims and do not state causes of action, and the sponsor defendants' motion to dismiss the third (breach of fiduciary duty), fourth (fraud), and fifth (constructive fraud) causes of action must be granted.
However, the sixth cause of action for fraudulent inducement of the release does state the breach of a duty independent of the contract. It is impossible to determine at this stage of the proceedings whether it would have been practical for plaintiff, prior to signing the release, to do the requisite testing, some of it possibly destructive, that would have been necessary to reveal the alleged balcony defects (TIAA Global Invs., LLC v One Astoria Sq. LLC, 127 AD3d 75 [1st Dept 2015]).
The fifteenth cause of action for a declaratory judgment sets forth a justiciable controversy. The allegations and documentary evidence establish a justiciable controversy concerning the parties' legal rights. There is a genuine dispute between the plaintiff and the sponsor Continental Residential Holdings LLC for which a declaration would have an immediate and practical effect of influencing the parties' conduct (Big Four LLC v Bond St. Lofts Condominium, 94 AD3d 401 [1st Dept 2012]).
Finally, as described above, a separate cause of action does not lie for conspiracy to commit a tort (Brackett v Griswold, supra at 467) and the sixteenth cause of action of conspiracy must be dismissed.
Therefore, the sponsor defendants' motion to dismiss so much of the complaint as seeks damages respecting the building's balconies, on the ground that a release executed by plaintiffs bars any such claims, must be denied. The sponsor defendants' motion to dismiss the complaint on the ground that the summons with notice failed to give proper notice of plaintiffs' claims and the claims are barred by the statute of limitations must also be denied. However, the sponsor defendants' motion to dismiss the first and second causes of action as against all of the moving defendants except the sponsor must be granted. The sponsor defendants' motion to dismiss the third through fifth causes of action (breach of fiduciary duty, fraud, and constructive fraud) must be granted. However, the sponsor defendants' motion to dismiss the sixth cause of action (fraudulent inducement of release) must be denied. The sponsor defendants' motion to dismiss the fifteenth cause of action for a declaratory judgment also must be granted, but only as to the sponsor defendants other than Continental Residential Holdings LLC. Finally, the sponsor defendants' motion to dismiss the sixteenth causes of action for civil conspiracy must be granted.
Turning to motion sequence number 004, Cantor Seinuk played the following role. As the engineer of record, Cantor Seinuk performed daily controlled inspections for concrete placement and rebar installation during the sponsor's construction of the building. In addition, in 2009, the Condominium Board engaged nonparty Cooper Square Realty, Inc. to investigate the cause of the breakage of a glass balcony panel of the building. On June 7, 2010, in response to a request, Cantor Seinuk provided a letter to Cooper Square Realty, Inc., opining that "the reinforcement and concrete placement of the exposed balconies were completed in accordance with the structural drawings and specifications."
In support of their motion to dismiss the third, fourth, fifth, seventh and sixteenth causes of action, the Cantor Seinuk defendants make the following arguments: (i) Plaintiff's claims are barred by the release; (ii) Cantor Seinuk did not owe a fiduciary duty to the plaintiff; (iii) plaintiff's fraud claims are in essence unsustainable malpractice claims; (iv) plaintiff's fraud claims are deficient because Cantor Seinuk had no duty to inform plaintiff, plaintiff cannot allege reliance on Cantor Seinuk's June 7, 2010 letter, a statement of opinion is not actionable as fraud, and plaintiff cannot allege justifiable reliance; (v) plaintiff's aiding and abetting fraud claim fails to plead actual knowledge of the scheme; and (vi) plaintiff's civil conspiracy claim is not legally cognizable.
In opposition, plaintiff argues that intentional misstatements concerning the condition of a building may properly be regarded as a statement of fact actionable in fraud.
The claims against Cantor Seinuk largely mirror the insufficient claims against the sponsor defendants. Therefore, the motion to dismiss the third (breach of fiduciary duty), fourth (fraud), and fifth (constructive fraud) causes of action must be granted for the reasons stated above.
The seventh cause of action against the Cantor Seinuk defendants for aiding and abetting the fraudulent inducement of the release, will not be dismissed at this point. It is too early in the litigation to determine whether or not there existed a scheme among numerous actors to induce the plaintiff into signing the release.
The sixteenth cause of action against Cantor Seinuk for civil conspiracy must be dismissed for the reasons stated above.
Finally, turning to motion sequence number 005, FS Project Management moves to dismiss the third (breach of fiduciary duty), fourth (fraud), fifth (constructive fraud), eighth (aiding and abetting fraudulent inducement of the release), tenth (fraud), eleventh (breach of fiduciary duty), and sixteenth (civil conspiracy) causes of action.
In 2009, after problems appeared, FS Project Management was retained by the Board to investigate the balconies. In support of their motion, FS Project Management argues that: (i) the complaint was untimely served two years after the summons with notice was served on the originally named defendants; (ii) plaintiff has failed to state a cause of action for breach of fiduciary duty (third cause of action) because FS Project Management was not a fiduciary, the claim is duplicative of the breach of contract claim, and the claim is barred by the six-year statute of limitations; (iii) the fraud claim (fourth cause of action) and the constructive fraud claim (fifth cause of action) are devoid of factual allegations of specific misrepresentations and are duplicative of the breach of contract claim; (iv) the aiding and abetting a breach of fiduciary duty claim (eighth cause of action) fails because there was no underlying breach of fiduciary duty; (v) the breach of fiduciary duty claim and the fraud claim were untimely filed on April 30, 2015, more than six years after the alleged breach in November 2008; and (vi) plaintiffs have failed to state a cause of action for civil conspiracy.
In opposition to FS Project Management's motion to dismiss, plaintiff argues that the complaint was timely served.
Preliminarily, the court notes that FS Project Management argues that cross claims asserted against it by Basonas Construction Corp. should also be dismissed, and that Basonas Construction Corp.'s opposition papers were untimely filed. However, FS Project Management's notice of motion does not demand dismissal of the cross claims, and the court will not reach the issue.
The complaint against FS Project Management was timely filed. Where a cause of action alleging a breach of fiduciary duty seeks only money damages, New York courts view such actions as alleging injury to property, to which a three-year statute of limitations applies (CPLR 214 [4]; Kaufman v Cohen, 307 AD2d 113 [1st Dept 2003]). However, where, as here, an allegation of fraud is essential to the breach of fiduciary duty claim, the six-year statute of limitations applies (CPLR 213 [8]; IDT Corp. v Morgan Stanley Dean Witter & Co., 12NY3d 132 [2009]). The action against FS Project Management accrued at the latest, in 2010, when the complaint alleges that FS Project Management aided and abetted fraudulent inducement of the release. This action was timely commenced less than six years later on April 30, 2015, when the complaint, naming FS Project Management for the first time, was filed.
However, the only cause of action against FS Project Management that states a cause of action is the eighth, for aiding and abetting fraudulent inducement of the release.
FS Project Management did not owe a fiduciary duty to the Condominium. The breach of fiduciary duty claim, and the aiding and abetting claim do not plead facts demonstrating a breach. The claims are duplicative of a breach of contract claim. The fraud and constructive fraud claims suffer from the same defects.
Conclusory pleadings do not give rise to an inference that FS Project Management knowingly participated in the alleged aiding and abetting of a breach of fiduciary duty (Roni LLC v Arfa, 15 NY3d 826 [2010]). For all of the reasons previously discussed, the causes of action against FS Project Management, except the eighth for aiding and abetting fraudulent inducement of the release, must be dismissed as being duplicative and insufficiently pled. The claim against FS Project Management for aiding and abetting the fraudulent inducement of the release will not be dismissed at this point as it is too early in the litigation to determine whether or not there existed a scheme among numerous actors to induce the plaintiff into signing the release.
Accordingly, it is
ORDERED that the motion by Wolf Haldenstein Adler Freeman & Herz LLP, to dismiss the third, fourth, fifth and sixteenth causes of action, and dismissing the claim for punitive damages (motion sequence number 002), is granted and those claims are dismissed; and it is further
ORDERED that the fourteenth cause of action against Wolf Haldenstein Adler Freeman & Herz LLP for legal malpractice is severed and shall continue; and it is further
ORDERED that the motion by Continental Residential Holdings LLC, Douglaston Development LLC, 325 Fifth Avenue LLC, 325 Fifth Avenue Commercial LLC, 325 Fifth Avenue Investors LLC, Continental Properties LLC, Clinton Management LLC, JELB 5th Avenue LLC, Mark Fisch, Steven Fisch, Jeffrey E. Levine, J.E. Levine Builder Inc. d/b/a Levine Builders and Steven R. Charno for an order: pursuant to CPLR 3211 (a) (10) and (5), dismissing so much of the complaint as seeks damages respecting the building's balconies on the ground that a release executed by plaintiffs bars any such claims; pursuant to CPLR 3211 (a) (5) and (8), dismissing the complaint on the ground that the summons with notice failed to give proper notice of plaintiffs' claims and the claims are barred by the statute of limitations; pursuant to CPLR 3211 (a) (1) and (7), dismissing the first and second causes of action as against all of the sponsor defendants except the actual sponsor, Continental Residential Holdings LLC, on the ground that such claims are barred by documentary evidence and fail to state a cause of action; and pursuant to CPLR 3211 (a) (1) and (7), CPLR 3016 (b) and 3017 (b), dismissing the third through sixth, fifteenth and sixteenth causes of action as against the sponsor defendants on the ground of want of particularity (motion sequence number 003) is granted in part and denied in part as follows; it is
ORDERED that the motion to dismiss so much of the complaint as seeks damages respecting the building's balconies on the ground that a release executed by plaintiffs bars any such claims, is denied; and it is further
ORDERED that the motion to dismiss the complaint on the ground that the summons with notice failed to give proper notice of plaintiffs' claims and, as a result, the claims are barred by the statute of limitations, is denied; and it is further
ORDERED that the first (breach of contract), second (breach of contract), and fifteenth (declaratory judgment) causes of action against Douglaston Development LLC, 325 Fifth Avenue LLC, 325 Fifth Avenue Commercial LLC, 325 Fifth Avenue Investors LLC, Continental Properties LLC, Clinton Management LLC, JELB 5th Avenue LLC, Mark Fisch, Steven Fisch, Jeffrey E. Levine, J.E. Levine Builder Inc. d/b/a Levine Builders and Steven R. Charno (the sponsor defendants other than Continental Residential Holdings LLC) are severed and dismissed; and it is further
ORDERED that the first and second causes of action against Continental Residential Holdings LLC for breach of contract are severed and shall continue; and it is further
ORDERED that the third, fourth, fifth, sixth, and sixteenth causes of action as against Continental Residential Holdings LLC, Douglaston Development LLC, 325 Fifth Avenue LLC, 325 Fifth Avenue Commercial LLC, 325 Fifth Avenue Investors LLC, Continental Properties LLC, Clinton Management LLC, JELB 5th Avenue LLC, Mark Fisch, Steven Fisch, Jeffrey E. Levine, J.E. Levine Builder Inc. d/b/a Levine Builders and Steven R. Charno (all of the sponsor defendants), are dismissed; and it is further
ORDERED that the fifteenth cause of action against Continental Residential Holdings LLC for a declaratory judgment is severed and shall continue; and it is further
ORDERED that the motion by WSP Cantor Seinuk, Cantor Seinuk Group P.C. and Silvian Marcus P.E. to dismiss all claims against them (motion sequence number 004), is granted in part and denied in part as follows; it is
ORDERED that the motion by WSP Cantor Seinuk, Cantor Seinuk Group P.C. and Silvian Marcus P.E. to dismiss the seventh cause of action for aiding and abetting the fraudulent inducement of the release is denied; and it is further
ORDERED that the third (breach of fiduciary duty), fourth (fraud), and fifth (constructive fraud), and sixteenth (civil conspiracy) causes of action against WSP Cantor Seinuk, Cantor Seinuk Group P.C. and Silvian Marcus P.E., are dismissed; and it is further
ORDERED that the motion by FS Project Management (motion sequence number 005) to dismiss the third (breach of fiduciary duty), fourth (fraud), fifth (constructive fraud), tenth (fraud), eleventh (breach of fiduciary duty), and sixteenth (civil conspiracy) causes of action is granted; and it is further
ORDERED that the motion by FS Project Management to dismiss the eighth cause of action for aiding and abetting fraudulent inducement of the release is denied; and it is further
ORDERED that the eighth cause of action is severed and shall continue.
This matter is adjourned to July 20, 2016 at 9:30 AM for preliminary conference in Part 19 (111 Centre Street, Room 1164B).
This constitutes the decision and order of the court. Dated: June 27, 2016
ENTER:
/s/_________
J.S.C.