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••• Another entry in the Canal Street renaissance: In November, womenswear brand Sea “opens its first-ever shop, featuring prairie dresses and denim jumpsuits,” at 324 Canal. That’s on the south side of the street, between Church and Broadway; presumably it goes through to Lispenard. Above: A look called “Stood up on St. Patrick’s Day.” —New York
••• More on the opening of the “WTC Cortlandt” subway station. —New York Times
••• A Habitat article on “Costs of Prosecuting Claims Against Sponsor Can Skyrocket” includes this case study: “The board at a 10-unit Tribeca building has learned how difficult it can be for a condominium to fund litigation. The board decided to sue the condominium’s sponsor, claiming that the sponsor failed to reveal physical defects in the building, failed to fund the reserve fund as required, and allowed one of its principals, the owner of the building’s commercial space, to cause structural damage to the building. In its suit, the board claimed unit-owners faced ‘staggering’ costs to repair existing damage and prevent further damage.” UPDATE: James says this is probably about 111 Hudson.
••• Dead body found off the Battery. —New York Post
••• More on Dirty Lemon, which is opening a mocktail bar at 293 Church. —The Cut
••• “D.S. “Dream Ship” DestiNY, is a new, augmented-reality experience unfolding at the Financial District’s historic Cunard Building [25 Broadway]. What was once a transatlantic ticketing office for the firm’s steamship line has been turned into a portal to a digitally enhanced, 35-minute adventure. Unlike virtual reality, which requires a headpiece to see a 360-degree rendition of a digital space, this show projects the action on the architecture and walls. It’s something like an Imax experience, but all around the viewer, not just on a screen in front.” —New York Post
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The 10-unit Tribeca building is likely 111 Hudson Street, based on certain terms quoted in the article matching those in the decision below. The case is at least 4 years old now; those delays are really among the biggest challenges in such litigation.
2018 NY Slip Op 30858(U)
THE BOARD OF MANAGERS OF 111 HUDSON STREET CONDOMINIUM, Plaintiff,
v.
111 HUDSON STREET, LLC, CHRISTINA SCHUITEMAKER, PETER MOORE, GIORA MANOR, TRIPLE ONE REALTY, L.L.C., MARK ANG, JOSEPH DUMBACHER, JOHN DUMBACHER, SETHURAMAN PRAKASH, VANDANA SHETH, DANIELLE RICH, 111 HUDSON STORE LLC, Defendant.
Docket No. 651959/2014, Motion Seq. No. 015.
Supreme Court, New York County.
May 7, 2018.
DECISION AND ORDER
BARRY OSTRAGER, Judge.
Plaintiff Board of Managers of 111 Hudson Street Condominium (the “Board”) moves for partial summary judgment on its sixth cause of action against Defendant 111 Hudson Street, LLC (the “Unit Owner”) for certain unpaid common charges and assessments. The motion is granted in part for the reasons stated herein.
The Unit Owner is the owner of the ground floor and basement commercial condominium unit at 111 Hudson Street. Under the bylaws of the condominium, all of the building’s unit owners are required to pay their proportionate share of common charges and special assessments. On July 1, 2014, the Board voted to authorize a $25,000 special assessment on all unit owners to be used for legal fees and expenses incurred in connection with the instant litigation, which arose because of various building maintenance issues. The Board also authorized an additional common charge of $227,000, over a twenty-two-month period, for the funding of reserves to pay legal fees and expenses in connection with the instant litigation.
Monthly billing statements including the Unit Owner’s proportion of the additional common charges and special assessment were delivered to the Unit Owner. It is undisputed that these charges were levied against the Unit Owner and that the Unit Owner failed to pay them. The Board now moves for partial summary judgment on its claim against the Unit Owner for the unpaid common charges and special assessment.
“The proponent of a motion for summary judgment must establish that there are no material issues of fact in dispute and that it is entitled to summary judgment as a matter of law.” Mazurek v. Metropolitan Museum of Art, 27 A.D.3d 227, 228 (1st Dep’t 2006). Where the movant has made such a showing, the burden then shifts to the party opposing the motion to raise genuine, triable issues of fact necessitating a trial. Id.
A plaintiff may establish “its prima facie entitlement to judgment as a matter of law by submitting, inter alia, evidence of its authority to collect certain assessments of common charges and fees, invoices reflecting the defendants’ account, and an affidavit of the president of the plaintiff attesting to the defendants’ failure to pay the balance on the account.” Board of Mgrs. of Brightwater Towers Condominium v. Cheskiy, 109 A.D.3d 944, 945 (1st Dep’t 2013). Here, it is undisputed that the Board levied a special assessment and certain additional common charges and that the Unit Owner failed to pay. The sole dispute is whether the Board had the authority to levy the common charges in the first instance.
Article V of the condominium bylaws states:
(a) The Board of Managers shall, from time to time and at least annually, prepare a budget for the Common Expenses of the Condominium and fix the Common Charges payable by the Unit Owners . . . . The Common Expenses shall include the cost of all insurance premiums on all policies of insurance required to be or which the Board of Managers has obtained pursuant to the provisions of Section 2 of this Article V. The Common Expenses may also include (i) such amounts as the Board of Managers may deem proper for the operation and maintenance of the Property, including, without limitation, an amount for working capital of the Condominium, for a general operating reserve, for a reserve fund for replacements, and to make up any deficit in the Common Expenses for any prior year . . . (iii) such assessments as are necessary to provide funds for other Condominium purposes including, without limitation, capital improvements to, and repairs and replacements of Condominium real or personal property, the acquisition of real or personal property on behalf of the Unit Owners, and expenses which were not anticipated at the last time Common Expenses were determined. . . .
Notwithstanding any other provision of these By-Laws, any Common Expense of the nature described in (iii) above and which is in excess of $25,000 shall require the approval of fifty percent (50%) in number and Common Interest of the Unit Owners. (Condominium Bylaws [NYSCEF Doc. 385]) (emphasis added).
It is undisputed that the Unit Owners did not vote to approve the $227,000 in additional common charges. The Board argues that no vote was necessary because the additional common charges fall under Article V.1(a)(i) as funds “for a general operating reserve.” No unit owner approval is necessary to levy funds under such category. The Unit Owner, in opposition, argues that the additional common charges required approval of the unit owners since it was for “expenses which were not anticipated at the last time Common Expenses were determined” and for an amount in excess of $25,000. Therefore, the Unit Owner asserts, the Board lacked the authority to levy the additional common charges and the motion for summary judgment on such claim must fail.
The Court finds that the Board failed to submit sufficient evidence of its authority to levy the additional common charges. It is unclear whether the “general operating reserve” was intended to include funds for potential litigation, and the Board failed to tender evidence demonstrating such. The Unit Owner has raised a triable issue as to whether the general operating reserve was intended to include funds for litigation expenses. Therefore, the Board’s motion for partial summary judgment on its claim for additional common charges is denied.
However, there are no disputed issues of fact as to the Board’s claim for the unpaid special assessment. The special assessment was not in excess of $25,000 and thus did not require unit owner approval. The July 21, 2014 invoice clearly charged the Unit Owner $5,035—its portion of the $25,000 special assessment. Payment was due on August 1, 2014. The Unit Owner did not pay the special assessment charge. Further, the Unit Owner does not contest the portion of the Board’s motion that relates to the special assessment. Therefore, the Board’s motion for partial summary judgment on its claim for the special assessment is granted.
Accordingly, it is hereby
ORDERED that Plaintiff’s motion for partial summary judgment on the sixth cause of action is granted in part. The Clerk is directed to enter judgment in favor of The Board of Managers of 111 Hudson Street Condominium against 111 Hudson Street, LLC on so much of the sixth cause of action that relates to the special assessment in the amount of $5,035.00, with interest accruing at the contractual rate of 18% per annum from August 1, 2014. (Condominium Bylaws, Article V.5 [NYSCEF Doc. 385]). The remaining claims shall continue.
I do like the optimistic ring of “the Canal Street renaissance”….Let’s hope for the best.
The destiny thing at 25 Broadway, is such a ripoff not even funny, it’s basically an ad for cipriani. Really 30 minutes you’ll never get back
That’s disappointing…I was hoping it would be worthwhile…What was so disappointing about it?