BOARD OF MANAGERS OF LORE CONDOMINIUM v. GATEWAY IV LLC (2019)

Plaintiff alleges numerous defects in the construction of the condominium building, asserting claims against the sponsor and its principals.

The complaint does not support liability against the individual defendants based solely on their execution of the sponsor's certification (Board of Mgrs. of 184 Thompson St. Condominium v. 184 Thompson St. Owner LLC, 106 A.D.3d 542, 544, 965 N.Y.S.2d 114 [1st Dept. 2013];  see also 20 Pine St. Homeowners Assn. v. 20 Pine St. LLC, 109 A.D.3d 733, 735, 971 N.Y.S.2d 289 [1st Dept. 2013].

The fraudulent inducement cause of action was correctly dismissed as duplicative of the breach of contract causes of action (see Cronos Group Ltd. v. XComIP, LLC, 156 A.D.3d 54, 64 N.Y.S.3d 180 [1st Dept. 2017] ).

The causes of action for constructive fraudulent conveyance pursuant to Debtor & Creditor Law (DCL) §§ 273 and 274 are not subject to the particularity requirement of CPLR 3016 and should not have been dismissed on that basis (Ridinger v. West Chelsea Dev. Partners LLC, 150 A.D.3d 559, 560, 56 N.Y.S.3d 48 [1st Dept. 2017] ).  Plaintiff has otherwise sufficiently stated claims under DCL §§ 273 and 274 (ABN AMRO Bank, N.V. v. MBIA Inc., 17 N.Y.3d 208, 228, 928 N.Y.S.2d 647, 952 N.E.2d 463 [2011] ).

The cause of action for intentional fraudulent conveyance was properly dismissed.  While plaintiff alleges that defendants made the fraudulent conveyances with the actual intent to hinder, delay or defraud it (DCL § 276), there are insufficient badges of fraud pled (Wall St. Assoc. v. Brodsky, 257 A.D.2d 526, 529, 684 N.Y.S.2d 244 [1st Dept. 1999] ).  For instance, plaintiff alleges that the conveyances were distributed to the individual defendants as pro rata proceeds of their equity interests in the sponsor, but does not allege that the transfers were not made in the normal course or that defendants were aware of plaintiff's claim and were unable to pay for it (cf.  Matter of Wimbledon Fin. Master Fund, Ltd. v. Bergstein, 166 A.D.3d 496, 90 N.Y.S.3d 12 [1st Dept. 2018] ).  The allegations also lack the particularity required under CPLR 3016(b).

We have considered the parties' remaining contentions and find them unavailing.