CALDERONI v. 260 PARK AVENUE SOUTH CONDOMINIUM (2023)

Order, Supreme Court, New York County (William Perry, J.), entered on or about August 4, 2022, which denied defendants’ motion to dismiss the complaint, unanimously modified, on the law, the motion granted insofar as dismissing the cause of action for private nuisance (eleventh cause of action), and otherwise affirmed, without costs.  Order, same court and Justice, entered on or about August 24, 2022, which granted plaintiffs’ motion to appoint a temporary receiver, unanimously affirmed, without costs.

Plaintiffs’ direct and derivative claims are sufficiently separately pleaded (see Yudell v. Gilbert, 99 A.D.3d 108, 113–115, 949 N.Y.S.2d 380 [1st Dept. 2012]).  Although the claims arise from the same facts, the harm is distinct;  the direct claims focus on the damage to plaintiffs’ individual units, while the derivative claims focus on the damage to common elements, including the roof (see AHW Inv. Partnership v. Citigroup Inc., 980 F.Supp.2d 510, 517 [S.D.N.Y.2013], affd 661 Fed.Appx. 2 [2d Cir.2016];  Cortazar v. Tomasino, 150 A.D.3d 668, 671, 54 N.Y.S.3d 89 [2d Dept. 2017];  Grimes v. Donald, 673 A.2d 1207, 1212 [Del.1996], overruled in part on other grounds by Brehm v. Eisner, 746 A.2d 244 [Del.2000]).

The causes of action for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, waste, and violations of the Condominium Act (Real Property Law § 339–cc) are not duplicative of the breach of contract causes of action.  The causes of action for breach of fiduciary duty and Condominium Act stem from the breach or violation of duties distinct from the contract (see 37 E. 50th St. Corp. v. Restaurant Group Mgt. Servs., L.L.C., 156 A.D.3d 569, 570, 68 N.Y.S.3d 424 [1st Dept. 2017] [“the same conduct which may constitute the breach of a contractual obligation may also constitute the breach of a duty arising out of the relationship created by contract but which is independent of the contract itself”]).  The gravamen of the misconduct and injury alleged in connection with the waste claims — allowing plaintiffs’ units and the common areas to deteriorate while in possession of those areas—is distinct from the failure to make repairs alleged in connection with the breach of contract causes of action (see Sutton Investing Corp. v. City of Syracuse, 48 A.D.3d 1141, 1142, 853 N.Y.S.2d 233 [4th Dept. 2008], lv dismissed 10 N.Y.3d 858, 859 N.Y.S.2d 619, 889 N.E.2d 497 [2008]).  However, the cause of action for private nuisance should be dismissed as duplicative, as “the facts which form the basis of the nuisance claim stem entirely from the Board's contractual obligations” to make repairs (see Milstein v. Essex House Condominium, 2010 N.Y. Slip Op. 33445[U], *15 [Sup. Ct., N.Y. County 2010]).

Demand futility was sufficiently pleaded for purposes of the derivative claims (see Business Corporation Law § 626[c];  Marx v. Akers, 88 N.Y.2d 189, 200–201, 644 N.Y.S.2d 121, 666 N.E.2d 1034 [1996];  Board of Mgrs. of the Alfred Condominium v. Miller, 202 A.D.3d 467, 468, 162 N.Y.S.3d 353 [1st Dept. 2022]).  Plaintiffs alleged that they made numerous complaints to the Board about the leaks and numerous specific requests for repairs, to no avail.  They also submitted affidavits and documentation supporting these allegations and evincing defendants’ failure to remediate even in response to Department of Buildings violations and a housing court order.  It stands to reason that the same Board that refused to make the repairs would not approve litigation to enforce its own obligation to repair.

That plaintiffs seek both equitable and monetary relief is not, in itself, a basis to dismiss the requests for injunctive relief, as an award of damages may not be adequate to fully compensate plaintiffs (see e.g. McMahon v. Cobblestone Lofts Condominium, 161 A.D.3d 536, 537, 78 N.Y.S.3d 2 [1st Dept. 2018];  Martini v. Lafayette Studio Corp., 234 A.D.2d 146, 146, 651 N.Y.S.2d 44 [1st Dept. 1996]).

Appointment of a temporary receiver was proper to prevent further delays and property deterioration in an already lengthy repair process during which plaintiffs’ apartments have been uninhabitable (see CPLR 6401[a];  Moran v. Moran, 77 A.D.3d 443, 445, 908 N.Y.S.2d 661 [1st Dept. 2010];  Cyngiel v. Krigsman, 192 A.D.3d 760, 762, 139 N.Y.S.3d 894 [2d Dept. 2021]).