Opinion
No. 702727–2012.
01-20-2016
BOARD OF MANAGERS OF THE SUNRISE MANOR CONDOMINIUM ASSOCIATION, Individually and on Behalf of All Unit Owners of The Sunrise Manor Condominium, Plaintiffs, v. The AKSAKALOVA FAMILY Limited Partnership, Sunrise Enterprise, Inc ., Arkady Zirkiev, Zoya Aksakalova, Rego Park Apartments LLC, North Shore Long Island Jewish Health System, Inc., North Shore Community Services, Inc., and Forest Hills Hospital, Defendants.
ROBERT L. NAHMAN, J.
Upon the following papers read on this motion by Aneres Realty LLC (Aneres Realty), for an order granting leave to intervene and amend the caption, and for an order dismissing the complaint with prejudice; and granting summary judgment on its counterclaims for declaratory judgment, and an implied easement; and plaintiff's cross move for an order granting summary judgment against all defendants and dismissing the counterclaims of the proposed defendant-intervener Aneres Realty; and defendants' North Shore Long Island Jewish Health System Inc. (NSLIJ), North Shore Community Services, Inc. (NSCS), and Forest Hills Hospital (FHH) cross motion for an order dismissing the complaint.
| Papers E–File | Numbered | |
|---|---|---|
| Notice of Motion–Affirmation–Exhibits | EF23–38 | |
| Memorandum of Law | EF 39 | |
| Notice of Cross Motion–Affidavit–Exhibits | EF44–47 | |
| Memorandum of Law | EF 48 | |
| Affirmation–Exhibits | EF 49–79 | |
| Notice of Cross Motion–Affirmation–Exhibits | EF 83–87 | |
| Affirmations | EF 89–90 | |
| Affirmation | EF 91 | |
| Reply Memorandum of Law | EF 92 |
This is an action in which plaintiff seeks the removal of an HVAC system and fence from the second floor rooftop of the condominium and to recover damages. The complaint in this action asserts four causes of action for a continuing trespass, for a violation of the condominium documents and Real Property Law § 339–j, for breach of contract, and for breach of fiduciary duty.
Sunrise Manor Condominium consists of 22 residential units, parking spaces, and a commercial unit located at 99–31 66th Avenue, Rego Park, New York. Sunrise Enterprise Inc. was the developer and sponsor of said condominium. The Declaration establishing the Sunrise Manor Condominium was issued on July 14, 2008 by Sunrise Enterprise, and was recorded on August 18, 2008. An Offering Plan was accepted for filing on November 15, 2008 and was thereafter amended twice. The Dec1aration of Condominium was recorded with the Department of Finance on August 18, 2008. At that time, Sunrise Enterprise's officers were Arkady Zirkiev and Ilayou Aronov. Ilayou Aronov died prior to the relevant events. After the condominium came into existence, units were sold and rented. The Offering Plan authorized a sponsor controlled Board of Managers until 50% of the units were sold or for two years from the first unit closing. Arkady Zirkiev and Zoya Aksakalova were the sponsor designee members of the Board of Managers.
Sunrise Enterprise, pursuant to a deed dated December 1, 2008, and recorded on December 10, 2008, conveyed a 50% interest to Rego Park Apartments LLC and a 50% interest to 99–31 Holdings LLC as tenants in common, in the “Unit No. Medical Office and 2B in the Declaration establishing” the Sunrise Manor Condominium, “[t]ogether with an undivided 22.13 percent interest as to the unit appurtenant to the Unit in the common elements of the Condominium Property” (the commercial unit).
In December 2009, Rego Park Apartments and 99–31 Holdings LLC leased the commercial unit, to Forest Hills Hospital for use as a medical office. The commercial unit, located on the first floor, is approximately 7,500 square feet, and has a 19% participating common interest in the condominium. Said lease was executed by Zoya Aksakalova as a member of Rego Park Apartments and by Arkady Zirkiev as a member of 99–31 Holding LLC.
The Offering Plan contains architectural drawings dated March 21, 2006, including the roof portion of the second floor. Spaces on the left and right are identified as terraces to residential units 2A and 2B. The space between the terraces is identified as building recreation, with a total area of 1089 square feet. This area does not contain hatch marks which the plan's legend identifies as a common area. The legend describes the common area on the second floor as 599 square feet, and consists of stairs, an elevator, the lobby area between four apartments, and a passageway to the recreation area.
On December 17, 2009, Arkady Zirkiev and Zoya Aksakalova, as members of the Board of Managers, gave written approval to NSLIJ and its architect, with respect to the drawings submitted to the Department of Buildings for the Forest Hills Hospital “annex” located at the leased commercial unit. On December 17, 2009, Ms. Aksakalova, as president of Rego Park Associates, gave written approval to the architect with respect to the drawings submitted to the Department of Buildings for the FHH “annex” located at the leased commercial unit. After receiving said approvals and all necessary permits, the HVAC unit and a fence surrounding the unit were installed on the roof of the commercial unit on the portion of the second floor space labeled recreation area situated between the two terraces. On April 28, 2011, the Department of Buildings issued a letter of completion indicating that the installation of the HVAC system was completed and signed off in the agency's system.
Rego Park Apartments, pursuant to a deed dated January 25, 2012 and recorded on February 2, 2012, conveyed its 50% ownership of the commercial unit to The Aksakalova Family Limited Partnership (AFLP) as well as a residential units known as 5A, and three parking spaces known as P1, P6 and P10. This deed was executed by Zoya Aksakalova, as a “representative” of Rego Park Apartments.
AFLP, pursuant to a deed dated October 17, 2012 and recorded on December 24, 2012 conveyed its 50% ownership in the commercial unit, together with an undivided 19% interest as to the unit appurtenant to the Unit in the common elements of the condominium property, to Robert Aronov and Ilana Aronova as Trustees of the Aksakalova Irrevocable Trust, located at 73–19 172nd Street, Fresh Meadows N.Y. 11366 (collectively the Aronovs).
In January 2012, a new Board of Managers was elected and the within action was commenced on November 7, 2012. Defendants AFLP, Sunrise Enterprise, Arkady Zirkiev, Zoya Aksakalova, Rego Park Apartments, NSLIJ, NSCS and FFH were served with process in 2012, and have served their answers.
The complaint alleges that defendant AFLP is the owner of the subject commercial unit; that defendant Rego Park Apartment was the owner of the commercial from December 1, 2008 through January 25, 2012; that defendant Sunrise Enterprise is the sponsor of the subject condominium; and that defendant Arkady Zirkiev is the president of the sponsor corporation, and defendant Zoya Aksakalova is the president of Rego Park Apartment. It is alleged that defendants Arkady Zirkiev and Zoya Aksakalova each have a financial interest in the sponsor corporation and Rego Park Apartment, and that in December 2009 they were members of, and controlled, the Board of Managers of the subject condominium. Defendants NSLIJ FHH are alleged to be the tenant or occupant of the commercial unit, pursuant to a lease with either Rego Park Apartment or AFLP.
Plaintiff alleges that in August 2010, the tenant of the commercial space installed or caused to be installed a HVAC unit and fencing around said unit which services the commercial space on the second floor roof top space above the commercial unit. Plaintiff alleges that the HVAC unit and fencing encroaches and trespasses upon the common roof top recreation area consisting of 1089 square feet of roof top space located on the second floor of the condominium. Plaintiff alleges that these installations were performed in violation of Section 339–I of the Real Property Law, and in violation of the condominium documents which require that all unit owners consent to these changes to the common element. It is alleged that pursuant to a letter dated May 29, 2012, plaintiff demanded that the sponsor, the former and current owner of the commercial unit, and the tenant of the commercial unit remove th subject roof top installations and restore the common area, and that the defendants have failed to do so.
After the commencement of this action, 99–31 Holdings LLC and the Aronovs, pursuant to a deed dated August 14, 2014 and recorded on September 2, 2014, each conveyed their 50% interest in the subject condominium unit to Aneres Realty. Aneres Realty has assumed the lease and responsibilities as landlord on the lease with Forest Hills Hospital, defendant herein.
On August 14, 2014, Aneres Realty entered into a permanent easement agreement with Shalom and Victoria Zirkiev, the owners of Unit 2A whereby it purchased an easement for the sum of $50,000, permitting the permanent installation of the commercial unit's HVAC equipment on the second floor rooftop terrace adjacent to Unit 2A. Said agreement was recorded on September 2, 2012. Shalom and Victoria Zirkiev are the son and daughter-in-law of Arkady Zirkiev.
On October 29, 2014, counsel for Aneres Realty, counsel for plaintiff, counsel for Arkady Zirkiev, and counsel for NSLIJ, NSCS and FFH entered into a stipulation whereby these parties agreed that the complaint would be amended so as to include Aneres Realty as a defendant and that the caption be amended, and that Aneres Realty would serve an answer on or before October 31, 2014. Said stipulation was not so-ordered by the court and plaintiff apparently had not served a supplemental or amended summons and amended complaint.
On October 29, 2014, a compliance conference was held at which time counsel for plaintiff, NSLIJ, NSCS, FFH, Zirkiev, and Aneres Realty appeared. The Honorable Martin E. Ritholtz issued an order on said date directing, among other things, that Aneres Realty serve its answer within 15 days of said order.
Aneres Realty seeks leave to intervene and upon intervention seeks an order granting summary judgment dismissing the complaint and granting summary judgment on its counterclaims for declaratory judgment and for an implied easement.
Plaintiff cross moves in opposition to Aneres's Realty's motion for summary judgment and seeks an order granting summary judgment on all of its claims against the defendants and dismissing Aneres Realty's counterclaims.
Defendants NSLIJ, NSCS and FHH cross move for an order dismissing the complaint against them.
It is well settled that “the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact” (Ayotte v. Gervasio, 81 N.Y.2d 1062, 1063 [1993], citing Alvarez v. Prospect Hospital, 68 N.Y.2d 320, 324[1986] ). Once a prima facie demonstration 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 (Zuckerman v. City of New York, 49 N.Y.2d 557 [1980] ). The burden is on the party moving for summary judgment to demonstrate the absence of a material issue of fact. Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Gilbert Frank Corp. v. Federal Ins. Co ., 70 N.Y.2d 966 [1988] ; Winegrad v. New York Med. Ctr., 64 N.Y.2d 851 [1985] ).
Condominium ownership is a hybrid form of real property ownership, created by statute (see Real Property Law art 9–B [§ 339–d et seq. ] [hereinafter the Condominium Act]; Board of Mgrs. of Vil. View Condominium v. Forman, 78 AD3d 627, 629–630 [2d Dept 2010], lv. denied 17 NY3d 704 [2011] ); Caprer v. Nussbaum, 36 AD3d 176, 183 [2d Dept 2006] ). Pursuant to the Condominium Act, each owner holds a real property interest in his or her unit and its appurtenances (see Real Property Law § 339–g ), which consists of an exclusive possessory interest in the unit (see Real Property Law § 339–h ) and an undivided interest in the common elements of the condominium (see Real Property Law § 339–I ; Board of Mgrs. of Vil. View Condominium v. Forman, 78 AD3d at 629–630 ; Caprer v. Nussbaum, 36 AD3d at 183 ; Murphy v. State of New York, 14 AD3d 127, 132–133 [2d Dept 2004] ; Schoninger v. Yardarm Beach Homeowners' Assn., 134 A.D.2d 1, 5–6 [2d Dept 1987] ).
Upon the filing of a declaration (see Real Property Law § 339–n ), a condominium is subject to the jurisdiction of the Condominium Act (see Real Property Law § 339–f ). In addition, the administration of the condominium's affairs is governed principally by its bylaws, “which are, in essence, an agreement among all of the individual unit owners as to the manner in which the condominium will operate, and which set forth the respective rights and obligations of unit owners, both with respect to their own units and the condominium's common elements” (Schoninger v. Yardarm Beach Homeowners' Assn., 134 A.D.2d at 6 ; see Matter of Levandusky v. One Fifth Ave. Apt. Corp., 75 N.Y.2d 530, 536 [1990] ; Board of Mgrs. of Vil. View Condominium v. Forman, 78 AD3d at 629–630 ; Murphy v. State of New York, 14 AD3d at 133 ). The basic agreement among the unit owners as to the manner in which the condominium shall be administered and maintained is set forth in the condominium's bylaws (see Real Property Law § 339–v ; Board of Mgrs. of Vil. View Condominium v. Forman, 78 AD3d at 629–630 ). The Condominium Act requires that the bylaws set forth “[s]uch restrictions on and requirements respecting the use and maintenance of the units ... as are designed to prevent unreasonable interference with the use of their respective units and of the common elements by the several unit owners” (Real Property Law § 339–v[1] [I] ).
A condominium's board of managers is statutorily empowered to enforce the condominium's by-laws, rules and regulations, including rights pertaining to common elements (see Real Property Law § 339–j ; Board of Mgrs. of Stewart Place Condominium v. Bragato, 15 AD3d 601 [2d Dept 2005] ; Board of Mgrs. of Ocean Terrace Towne House Condominium v. Lent, 148 A.D.2d 408 [2d Dept 1989], lv denied 75 N.Y.2d 702 [1989] ).
Aneres Realty is the current owner of the commercial unit. In support of its motion to intervene it has a copy of its answer, dated December 1, 2014, which interposes eight affirmative defenses, counterclaims for declaratory judgment, for an implied easement and for sanctions and attorney's fees, and cross claims against AFLP, Sunrise Enterprise, Arkady Zirkiev, Zoya Aksakalova and Rego Park Apartments.
As none of the parties oppose the request for intervention, that branch of Aneres Realty's motion is granted and its answer is deemed to have been served. Plaintiff has served a reply to Aneres Realty's counterclaims. Therefore, issue has been joined as to said counterclaims.
Aneres Realty is an intervener and has not sought leave to be substituted for any of the named defendants, including AFLP a former 50% owner of the commercial premises. Therefore, as the complaint has not been amended to assert any claims against Aneres Realty, that branch of Aneres Realty's motion which seeks summary judgment dismissing the complaint, is denied.
To the extent that plaintiff's counsel in his reply memorandum of law asserts that plaintiff's first and second causes of action are now asserted against Aneres Realty, proper procedure requires that plaintiff assert said claims in an amended complaint. A memorandum of law is not a proper vehicle for amending the complaint. To the extent that plaintiff seeks relief against Aneres Realty based upon its 2012 complaint, such relief is not available.
Turning now to Aneres Realty's first counterclaim for declaratory judgment, the court finds that a justiciable controversy exists as to whether the area occupied by the HVAC system and fence is a common element and whether the prior sponsor-controlled Board of Managers was authorized to approve the installation of the HVAC system and fence on the second story rooftop.
The Offering Plan contains a drawing of the second floor which depicts, in pertinent part, two separate residential units with direct access to a terrace located on the second floor rooftop. Between the two terraces is an area of the rooftop that is described as a recreational area. Section 5 of the declaration defines balconies and terraces adjacent to and with direct access from the interior of a particular unit as a Limited Common Element. It is undisputed that the HVAC system and fence were installed in the area described as the recreational area and that it occupies 25% of said space.
A review of article 9–B of the Real Property Law, together with the relevant provisions of the condominium's declaration and by-laws, establishes that portion of the second story rooftop that has been designated for recreational purposes, is a common element. Both Real Property Law § 339–e (3)(b) and Section 5(i) of the condominium's declaration includes “roofs” in its definition of “common elements”.
Real Property Law § 339–e(3)(e) includes as common elements, unless otherwise provided in the declaration, “central and appurtenant installations for services such as power, light, gas, hot and cold water, heating, refrigeration, air conditioning and incineration”. Section 5(iii) of the condominium's declaration differs in some respects and includes as common elements “[all central and appurtenant installations for services such as electricity, steam, gas, hot and cold water, telephone and refrigeration which are not included in a particular Unit”.
Real Property Law § 339–I(2) provides in pertinent part 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.”
Real Property Law § 339–I(3) provides in pertinent part that “[the common elements shall remain undivided and no right shall exist to partition or divide any thereof, except as otherwise provided in this article. Any provision to the contrary shall be and void”.
Real Property Law § 339–I(4) provides that “[each owner may use the common elements in accordance with the purposes for which they are intended, without hindering the exercise of or encroaching upon the rights of other unit owners, but this subsection shall not be deemed to prevent some unit or units from enjoying substantially exclusive advantages in part or parts of the common elements as expressed in the by-laws”.
Aneres Realty's argument that the HVAC system is also a common element and therefore it could be located upon the common element rooftop, without the consent of the other unit owners, is rejected. There is no evidence that the subject HVAC system was part of the building's central heating, ventilation and air conditioning system. Rather, FHH's lease agreement with the then owners of the commercial unit required the tenant to build out the unit, and provided that installations such as the HVAC would become the property of the unit owner at the conclusion of the tenancy. The commercial unit's HVAC system thus was conceived of as a privately owned system, and not a common element.
It is undisputed that the prior sponsor-controlled Board of Managers consented to the installation of the HVAC unit and fence on the second story rooftop in the designated recreational area. Contrary to Aneres Realty's assertion, said approval by the prior Board of Managers is not subject to the business judgment rule. The business judgment rule is applicable to the board of directors of cooperative and condominium corporations (Matter of Levandusky v. One Fifth Ave. Apt. Corp., 75 N.Y.2d 530 [1990] ; Helder v. Comity, 61 AD3d 635 [2d Dept 2009] ). Under that rule, a court's inquiry “is limited to whether the board acted within the scope of its authority under the bylaws (a necessary threshold inquiry) and whether the action was taken in good faith to further a legitimate interest of the condominium. Absent a showing of fraud, self-dealing or unconscionability, the court's inquiry is so limited and it will not inquire as to the wisdom or soundness of the business decision” (Schoninger v. Yardarm Beach Homeowners' Assn., Inc., 134 A.D.2d at 9 ).
Here, the prior sponsor-controlled Board of Managers did not act within the scope of its authority when it approved the plans to install the subject HVAC system and fence, as said installation effectively diminished the roof top space, a common element, and thereby diminished each units owner's appurtenant right to recreational use of said rooftop area, in violation of Real Property Law § 339(i). In order to alter each unit owner's common interest in the second floor rooftop common element, designated as recreational space, the approval of each unit owner is required, and such approval must be in the form of a recorded declaration amendment (see Real Property Law § 339–I[2] ). It is undisputed that the prior sponsorcontrolled Board of Managers neither sought nor obtained such approval prior to consenting to the installation of the commercial unit's HVAC system and a fence on the second story rooftop. Therefore, this court finds that the prior sponsor-controlled Board of Manager's approval of the installation of the HVAC system and fence is and void.
Accordingly, that branch of Aneres Realty's motion for summary judgment on its first counterclaim for declaratory judgment is granted to the extent that it is the declaration of this court that the second story rooftop area, described in the Offering Plan as a recreational area is a common element; that the prior sponsor-controlled Board of Managers did not act within the scope of its authority when it approved the plans to install the subject HVAC system and fence; and that the prior Board of Manager's approval of said installation is and void.
Turning now to Aneres Realty's second counterclaim, an easement may be implied from pre-existing use upon severance of title when three elements are shown: “(1) unity and subsequent separation of title, (2) the claimed easement must have, prior to separation, been so long continued and obvious or manifest as to show that it was meant to be permanent, and (3) the use must be necessary to the beneficial enjoyment of the land retained” (Abbott v. Herring, 97 A.D.2d 870 [3d Dept 1983], affd 62 N.Y.2d 1028 [1984] ; see West End Props. Assn. of Camp Mineola, Inc. v. Anderson, 32 AD3d 928, 929 [2d Dept 2006] ). The necessity required for an implied easement based upon preexisting use is only reasonable necessity, in contrast to the absolute necessity required to establish an implied easement by necessity (see West End Props. Assn. of Camp Mineola, Inc. v. Anderson, 32 AD3d at 929 ; Monte v. DiMarco, 192 A.D.2d 1111, 1112, [4th Dept 1993], lv denied 82 N.Y.2d 653 [1993] ).
Aneres Realty cannot establish a claim for an implied easement as unity of title was severed on December 1, 2008, when the sponsor conveyed the commercial unit to Rego Park Apartments and 99–31 Holdings LLC. In addition, the claimed easement did not exist as the HVAC system and fence were installed on the rooftop at the time of said conveyance. That branch of Aneres Realty motion which seeks summary judgment on its second counterclaim for an implied easement is denied, and that branch of the plaintiff's cross motion which seeks to dismiss this counterclaim, is granted.
Plaintiff's first cause of action for continuing trespass is asserted against defendants AFLP and defendants NSLIJ, NSCH, FHH, and seeks the removal of the HVAC unit and fencing from the roof top of the second floor common recreational area. “The essence of trespass is the invasion of a person's interest in the exclusive possession of land” (Zimmerman v. Carmack, 292 A.D.2d 601, 602 [2d Dept 2002] ). The elements of a cause of action sounding in trespass are an intentional entry onto the land of another without justification or permission (see Korsinsky v. Rose, 120 AD3d 1307, 1310 [2d Dept 2014] ; Marone v. Kally, 109 AD3d 880[2d Dept 2013] ; Volunteer Fire Assn. of Tappan, Inc. v. County of Rockland, 101 AD3d 853, 855–856 [2d Dept 2012] ; Carlson v. Zimmerman, 63 AD3d 772, 773[2d Dept 2009] ), or a refusal to leave after permission has been granted but thereafter withdrawn (see Rager v. McCloskey, 305 N.Y. 75, 79 [1953] ; Navarro v. Federal Paper Bd. Co., 185 A.D.2d 590, 592 [3d Dept 1992] ). Intent is defined as intending the act which produces the unlawful intrusion, where the intrusion is an immediate or inevitable consequence of that act (see Phillips v. Sun Oil Co., 307 N.Y. 328, 331[1954] ). “Liability may attach regardless of defendant's mistaken belief that he or she had a right to enter” (State of New York v. Johnson, 45 AD3d 1016, 1019[2007] ; see Curwin v. Verizon Communications [LEC], 35 AD3d 645 [2d Dept 2006] ).
An unlawful encroachment has been consistently characterized as a continuous trespass giving rise to successive causes of action, and the statute of limitations would only bar recovery of damages more than three years prior to commencement of the action (see Bloomingdales, Inc. v. New York City Tr. Auth., 52 AD3d 120, 123 [1st Dept 2008], affd 13 NY3d 61 [2009] ). “The threat of continuing trespass entitles a property owner to injunctive relief where irreparable injury may result” (Long Is. Gynecological Servs. v. Murphy, 298 A.D.2d 504, 504 [2d Dept 2002] ; CSC Acquisition–NY, Inc. v. 404 County Rd. 39A, Inc., 96 AD3d 986, 987 [2d Dept 2012] ).
Here, it is undisputed that the prior sponsorcontrolled Board of Managers consented to the placement of the HVAC system and fence on the second floor roof top; that the Board of Managers who were elected in 2012 withdrew its consent to said placement; and that although a demand was made, said HVAC system and fence have not been removed from the second story rooftop. As noted above, the consent granted by the sponsor controlled Board of Managers is void and invalid.
Plaintiff has established that the HVAC system and fence is encroaching on the common element second story rooftop, described as a recreational area. With respect to AFLP, plaintiff has not established that this defendant, or its agents, employees, or contractors entered the subject area of the roof top and installed the equipment. In addition, as AFLP is no longer an owner of the commercial unit, it cannot be directed to remove the encroaching HVAC system. As plaintiff has not served an amended complaint asserting a claim against Aneres Realty for trespass or encroachment, it may not seek relief against this defendant/intervener at this juncture.
The documentary evidence establishes that defendant FFH is the sole tenant of the commercial unit. Defendants NSLIJ and NSCS are not parties to the lease agreement, and do not occupy any portion of the lease premises.
The documentary evidence presented demonstrates that an expediter sent a letter dated May 19, 2011 to NSLIJ, along with the equipment permit use hard cards issued by the Department of Buildings for an air conditioning system, ventilating system and heating system. The drawings enclosed with said letter depict the HVAC system installed on the second floor rooftop, for the “Forest Hills Hospital Annex”. NSLIJ, in a letter dated July 5, 2012, responded to a letter from plaintiff's counsel concerning the location of the HVAC system on the rooftop, requesting that “our equipment is not removed or disturbed”. The fact that NSLIJ received the Department of Buildings hand cards, does not establish that it, or its agents, employees or contractors installed the HVAC system and fence. Plaintiff has also presented no evidence that NSCS entered the subject rooftop and installed the HVAC equipment or the fence. As the evidence presented is insufficient to warrant the granting of summary judgment with respect to defendants NSLIJ and NSCS, that branch of plaintiff's cross motion which seeks summary judgment against these defendants, is denied.
FFH, pursuant to the terms of its lease was to construct the commercial space, with the consent of the unit owner. The lease also provided that the landlord of the commercial unit were to obtain all required approvals from the condominium. NSLIJ and NSCS are not parties to the lease agreement, and do not occupy any portion of the lease premises.
It is undisputed that the HVAC system and fence was installed on the second story rooftop for FHH's benefit. As said rooftop installations are encroaching on the common element, without the consent of all of the unit owners, defendant FHH is required to remove said encroachment.
Plaintiff's second cause of action against AFLP alleges that the rooftop installations and continuing encroachment constitutes a violation of the condominium documents, and seeks the removal of the encroaching structures, as well as damages. The documentary evidence presented herein establishes that AFLP was a 50% owner of the commercial unit from January 25, 2012 to October 17, 2012. AFLP was not an owner of the commercial unit at the time this action was commenced, and the HVAC system and fence were installed in 2010, prior to AFLP acquiring an ownership interest in said unit. As defendant AFLP is not the owner of the commercial unit, it cannot be directed to remove the encroaching HVAC system and fence from the roof. Therefore, that branch of the motion which seeks injunctive relief against AFLP directing it to remove the HVAC system and fence is denied.
Plaintiff's prior counsel in a letter dated May 29, 2012, demanded that AFLP remove the encroaching HVAC system and fence, within 30 days after the receipt of said letter. At the time said letter was sent to AFLP, it had an ownership interest in the commercial unit. AFLP did not remove the equipment and permitted its tenant to maintain the encroaching HVAC system and fence on the roof, in violation of the condominium's by-laws. Therefore, that branch of plaintiff's plaintiff's cross motion which seeks summary judgment on its second cause of action against AFLP is granted to the extent that plaintiff may recover damages on behalf of the unit owners, for the period of June 29, 2012 to October 17, 2012. The amount of said damages shall be determined at trial.
Plaintiff third cause of action for breach of contract against the sponsor alleges that it permitted the second story rooftop installations, which encroached upon and reduced the size of the common element, to the exclusive benefit of the commercial unit. It is asserted that the Offering Plan prohibited alteration to the common elements without the consent of all unit owners, and that such consent was not obtained by the sponsor. It is also asserted that the sponsor acted in violation of Real Property Law § 339–I, in that it did not obtain the consent of all unit owners as required by the condominium documents.
“The essential elements of a cause of action to recover damages for breach of contract are the existence of a contract, the plaintiff's performance pursuant to the contract, the defendant's breach of its contractual obligations, and damages resulting from the breach” (Carione v. Hickey, 133 AD3d 811 [2d Dept 2015] ), quoting PFM Packaging Mach. Corp. v. ZMY Food Packing, Inc., 131 AD3d 1029, 1030 [2d Dept 2015] ).
The Offering Plan constitutes a contract between the sponsor and the unit owners. It is undisputed that page 44 of the Offering Plan, as amended, provides in relevant part, that:
“No changes will be made in the size or number of Units, and/or their respective percentage of Common Interest and no material change will be made in the size and quality of the common elements, except by amendment to the plan, and when applicable, to the Declaration.”
“Unless all purchasers consent, no material change will be made in the size and not material adverse change will be made in the quality of the Common Elements. If there is a material amendment to the Offering Plan that adversely affects the purchasers, the sponsor must grant purchasers a right of rescission and a reasonable period of time that is not less than fifteen (15) days after the date when an amendment to the Offering Plan disclosing such material change is presented to exercise the right to rescission. The Sponsor must return any deposit or down payment to purchasers who rescind.”
Here, the sponsor's president Arkady Zirkiev and its designee Zoya Aksakalova were members of the Board of Managers and approved the commercial tenant's plans to install the HVAC and fence on the common element second story rooftop. The sponsor Sunrise Enterprise, thus, had knowledge of the commercial tenant's plans and acquiesced to the installation of said equipment on the common element rooftop. It is undisputed that the HVAC system and fence occupies 25% of said common element. Plaintiff has thus established that the sponsor breached the Offering Plan by permitting the reduction of the size of the common element, without first obtaining the consent of all the unit owners and amending the Offering Plan. Plaintiff has also established that the unit owners sustained damages, as each unit owner's appurtenant interest in said common element has been reduced. As the Offering Plan was not amended, the unit owners' remedies are not limited to rescission. Accordingly, that branch of the plaintiff's cross motion which seeks summary judgment on the third cause of action against Sunrise Enterprise for breach of contract, is granted and the amount of damages shall be determined at trial.
Plaintiff's fourth cause of action is for breach of fiduciary duty based upon self dealing, bad faith and wilful misconduct by Sunrise Enterprise, Arkady Zirkiev and Zoya Aksakalova.
The elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant's misconduct (see Smallwood v. Lupoli, 107 AD3d 782 [2d Dept 2013] ; Palmetto Partners, L.P. v. AJW Qualified Partners, LLC, 83 AD3d 804, 807[2d Dept 2011] ). Although the current board of managers of a condominium may seek recovery from the members of the initial board of managers for the breach of fiduciary duties owed to the condominium and its unit owners (see Board of Managers v. Long Pond Investors, 233 A.D.2d 472, 472–473 [2d Dept 1996] ; Board of Managers of Acorn Ponds at North Hills Condominium I v. Long Pond Investors, Inc., 233 A.D.2d 472 [2d Dept 1996] ; Board of Mgrs. of Fairways at N. Hills Condominium v. Fairway at N. Hills, 193 A.D.2d 322 [2d Dept 1993] ), plaintiff has failed to establish a basis for such liability on the part of Sunrise Enterprise, the sponsors of the condominium.
Mr. Zirkiev, in his opposing affidavit, asserts that the Offering Plan does not mention the recreation space in its definition of the common elements; that pursuant to the provisions of Section 9(c)(ii) of the declaration, the sponsor had a right to place the HVAC unit in its current place; that even assuming that the HVAC unit must be moved, the plaintiff has no right to seek damages against him; and that even assuming that a unit owner cannot grant an easement over a terrace which is a limited common area, his son could grant a license to use the terrace to the commercial unit owner. Ms. Aksakalova does not oppose the plaintiff's cross motion.
Contrary to Mr. Zirkiev's arguments, as stated above, the Offering Plan, declaration and by-laws all include roofs in their definition of the common elements, and the subject space on the second floor story roof is a common element that was designated as recreational space. Contrary to Mr. Zirkiev's assertions, Section 9(c)(ii) of the Offering Plan only permits the sponsor to “establish, grant or create easements for any additional underground electric, transformer, amplifier, gas, cable television, telephone, water, storm drainage, sewer or other utility lines and appurtenances in, under and through the property ...” (emphasis added). This section does not permit the sponsor to grant an easement on top of or across a common element.
This court finds that Mr. Zirkiev and Ms. Aksakalova, as members of the sponsor-controlled Board, owed a fiduciary duty to the condominium and the unit owners, and that they breached said duty when they approved the installation of the HVAC unit and fence on the common element roof, without obtaining the approval of all of the unit owners and amending the declaration and Offering Plan. Mr. Zirkiev and Ms. Aksakalova could not simply act on behalf of the sponsor and disregard the effect the subject installation would have upon the condominium and the other unit owners.
At the time Mr. Zirkiev and Ms. Aksakalova approved the installation of the HVAC system on the common element rooftop, the commercial unit was owned by Rego Park Apartments and 99–31 Holdings LLC. Ms. Aksakalova was an officer of Rego Park Apartments and Mr. Zirkiev was a member of 99–31 Holding LLC. These owners of the commercial unit entered into a lease with FHH, which provides, in pertinent part, that “(d) all alterations, installations, additions upon the Premises, Building or Land made by either party, including all paneling, decorations, partitions, railings, affixed to the realty shall at the end of Term (including any renewals or extensions), shall become the property of the Landlord and shall remain upon and be surrendered with the Premises as a part thereof, but Tenant shall remove all medical equipment”.
In approving the installation of the HVAC system, Ms. Aksakalova and Mr. Zirkiev, acted in a manner that benefitted the entities in which they had an interest, at the expense of the condominium and the unit owners. In this regard, they also breached their fiduciary duty to the condominium and the residential unit owners. Therefore, that branch of the plaintiff's cross motion which seeks summary judgment on the fourth cause of action is denied as to Sunrise Enterprises, and is granted as to Arkady Zirkiev and Zoya Aksakalova, and the amount of damages shall be determined at trial.
The court further notes that contrary to Mr. Zirkiev's assertions, the HVAC system and fence cannot be relocated to the balcony or terrace adjacent to Mr. Zirkiev's son's unit, without the consent of the Board of Managers. Section 5 of the declaration defines balconies and terraces adjacent to and with direct access from the interior of a particular unit as a Limited Common Element, and provides that “the use thereof shall be restricted to specified Unit Owners as set forth herein, subject to the right of the Board of Managers to enter upon the Limited Common Elements for maintenance, repair or improvement and to the rules and regulations of the Condominium”. Section 9(D) of the declaration provides that “[no Unit shall have an easement for the use of any Limited Common Elements except the Unit to which such Limited Common Element is appurtenant”. Mr. Zirkiev's son, a unit owner of a second floor unit, thus, cannot effectively grant the commercial unit owner an easement or a license with respect to any portion of the balcony or terrace adjacent to his residential unit.
Turning now to NSLIJ, NSCS and FHH cross motion for summary judgment, that branch of the cross motion which seeks to dismiss the complaint against defendants NSLIJ and NSCS, is denied. NSLIJ and NSCS are parties to the lease agreement, and neither is a tenant or occupant of the commercial unit. However, these defendants have not established that they did not enter the second story rooftop and install the encroaching HVAC system and fence. The affidavit submitted by counsel for NSLIJ lacks personal knowledge and is insufficient to warrant the granting of summary judgment dismissing the complaint against defendants NSLIJ and NSCS.
That branch of the cross motion which seeks summary judgment dismissing the complaint as to defendant FHH is denied. FHH is the tenant of the commercial unit and it is undisputed that this defendant sought and obtained the prior Board of Managers' approval of the installation of the HVAC system. In view of the fact that said approval was improperly given and as FHH is pursuant to the terms of the lease, the current owner of the HVAC system, this defendant is responsible for the removal of the encroaching unit from the common element roof. Accordingly, it is
ORDERED that Aneres' Realty's motion to intervene is granted and plaintiff is directed to amend its summons and complaint accordingly within 30 days of the date of this order; and it is further
ORDERED that branch of Aneres Realty's motion which seeks summary judgment dismissing the complaint is denied; and it is further
ORDERED that branch of defendant Aneres Realty's motion which seeks summary judgment on its first counterclaim for declaratory judgment is granted to the extent that it is the declaration of this court that the second story rooftop area, described in the Offering Plan as a recreational area is a common element; that the prior sponsor-controlled Board of Managers did not act within the scope of its authority when it approved the plans to install the subject HVAC system and fence; and that the prior Board of Manager's approval of said installation is and void; and it is further
ORDERED that branch of Aneres Realty's motion which seeks summary judgment on its second counterclaim for an implied easement, is denied; and it is further
ORDERED that branch of plaintiff's cross motion which seeks to dismiss Aneres Realty's counterclaims is granted solely to the extent that the second counterclaim for an implied easement is dismissed; and it is further
ORDERED that branch of plaintiff's cross motion which seeks summary judgment against Aneres Realty is denied; and it is further
ORDERED that branch of plaintiff's cross motion which seeks summary judgment against Aksakalova Family Limited Partnership on the first and second causes of action seeking the removal of the HVAC and fence is denied; and it is further
ORDERED that branch of the plaintiff's cross motion which seeks summary judgment on its first cause of action is denied as to defendants North Shore Long Island Jewish and North Shore Community Services; and it is further
ORDERED that branch of the plaintiff's cross motion which seeks summary judgment on its first cause of action is granted as to defendant Forest Hills Hospital. Defendant Forest Hills Hospital is directed to remove the encroaching HVAC system and fence from the second floor roof common element, within 180 days from the date of service of this order upon defendant Forest Hills Hospital, together with notice of entry; and it is further
ORDERED that branch of the plaintiff's cross motion against Aksakalova Family Limited Partnership which seeks summary judgment on the second cause of action for damages on behalf of the unit owners is granted, solely for the period of June 29, 2012 to October 17, 2012, and the amount of said damages shall be determined at trial; and it is further
ORDERED that branch of the plaintiff's cross motion which seeks summary judgment on the third cause of action against Sunrise Enterprise for breach of contract, is granted, and the amount of damages shall be determined at trial; and it is further
ORDERED that branch of the plaintiff's motion which seeks summary judgment on the fourth cause of action is denied as to defendant Sunrise Enterprise and is granted as to Arkady Zirkiev and Zoya Aksakalova, and the amount of damages with respect to said individual defendants shall be determined at trial; and it is further
ORDERED that defendants North Shore Long Island Jewish, North Shore Community Services and Forest Hills Hospital's cross motion for summary judgment dismissing the complaint are denied.