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Cooperatives & Condominiums
Condo Board Was Intended Beneficiary of Agreement
Board of Managers of 100 Congress Condominium v. SDS Congress LLC
NYLJ 7/7/17, p. 28, col. 2
AppDiv, Second Dept.
(memorandum opinion)
In an action by a condominium board against a contractor and an engineering firm for breach of contract and professional malpractice, the engineering firm appealed from Supreme Court's denial of its motion to dismiss. The Appellate Division modified to dismiss the malpractice claim, but otherwise affirmed, holding that the condominium board's complaint sufficiently alleged that the condominium was either an intended beneficiary of the contract with the engineering firm or a successor-in-interest to the sponsor's construction contracts.
The contractor, an alleged agent of the sponsor, retained the engineering firm to inspect the building throughout construction. The condominium board brought this action against both the contractor and the engineering firm alleging that the building had been negligently constructed and inspected. The board contended that the engineering firm had breached its contract, and that the firm had committed professional malpractice. Supreme Court denied the engineering firm's motion to dismiss, and the firm appealed.
The Appellate Division first held that the complaint adequately alleged that the condo board was an intended third party beneficiary of a contract between the sponsor and the engineering firm. The court also noted that condominium unit owners are sometimes considered successors-in-interest of condominium sponsors, and held that whether the unit owners in this case should be considered successors-in-interest was a question of fact, precluding dismissal of the complaint. The court did, however, dismiss the professional malpractice claim , noting that the professional negligence claim was merely a restatement of the breach of contract claim.
Fair Housting Act Claim Against Condominium Board
Gutierrez v. McGrath Management Services, Inc.
NYLJ 7/7/17, p. 28, col. 5
AppDiv, Second Dept.
(memorandum opinion)
In an action by condominium unit owner against the condominium board, the management company, and individual board members alleging tortious interference, battery, defamation, and violations of the Fair Housing Act, unit owner appealed from Supreme Court's dismissal of her complaint. The Appellate Division modified to reinstate the battery claim against a board member, and the Fair Housing Act claim against the condominium board, and otherwise affirmed.
Unit owner had fallen behind in her maintenance payments. Subsequently, a board member allegedly accosted unit owner in the condominium's pool area, grabbing her and informing her that she was not permitted in the pool area because she was behind in monthly payments. The condominium board also posted notices apparently indicating that unit owner was in arrears. As a result of these actions, unit owner brought a claim for tortious interference with contract, allegedly because the board was interfering with her contract with her tenant; for battery against the unit owner who had accosted her; for violation of the Fair Housing Act and for defamation. When Supreme Court dismissed the complaint against all defendants, and unit owner appealed.
In modifying, the Appellate Division first agreed with Supreme Court that the tortious interference claim could not stand because there was no indication that unit owner's tenant had breached any contract with tenant. The Appellate Division also upheld dismissal of the defamation claim because truth is a defense and there was no allegation that any of the statements made by the board were untrue. But the Appellate Division held that that battery claim against the board member who had grabbed the unit owner should survive a motion to dismiss, as should the Fair Housing Act claim alleging that the board had attempted to prevent her from using the common facilities because she was of Hispanic descent.
The court did sustain dismissal of the Fair Housing Act claim against the management company because the factual allegations in the complaint were insufficient to support the claim.
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