TOPILIN v. ISLAND HOUSE TENANT CORP (2026)

Order, Supreme Court, New York County (Francis A. Kahn, III, J.), entered November 12, 2024, which, to the extent appealed from as limited by the briefs, granted the respective motions of defendants Island House Tenants Corp. and United Nations Federal Credit Union to dismiss the complaint, unanimously modified, on the law, to deny Island House Tenants Corp.'s motion as to the sixth cause of action for breach of the warranty of habitability, and otherwise affirmed, without costs.

The motion court properly dismissed plaintiff's claim for breach of the proprietary lease seeking an abatement of maintenance for the period his apartment was uninhabitable following a fire in his kitchen.  Plaintiff acknowledged his failure to perform under the proprietary lease, negating an element of the claim (see Harris v. Seward Park Hous. Corp., 79 AD3d 425, 426 [1st Dept 2010] ).  There is no dispute that the April 29, 2017 fire rendered the apartment untenantable;  however, the motion court correctly determined that as a result of plaintiff's failure to procure property insurance as required under paragraph 3.2.5 of the proprietary lease, plaintiff was deemed to have (i) “irrevocably released” and (ii) “irrevocably agreed to indemnify and hold harmless” defendant Island House Tenants Corp. (the cooperative) “from any claim for damages” to the apartment and its contents “which, but for the Tenant–Shareholder's failure to obtain and maintain the required insurance coverage, would have been covered by insurance.”  Thus, the motion court properly found that plaintiff's election to withhold maintenance was a breach of his obligations under the proprietary lease, warranting denial of the related injunctive relief against the cooperative.

The second claim for breach of fiduciary duty was also properly dismissed, as plaintiff did not plead any “independent tortious acts” by the cooperative's board members with specificity (see Peacock v. Herald Sq. Loft Corp., 67 AD3d 442, 442–443 [1st Dept 2009];  CPLR 3016[b] ).  Since no independent wrongful conduct by any particular board member was alleged, the cooperative's “decisions concerning the manner and extent of repairs and renovations to the building were within the scope of their authority under the by-laws and proprietary lease of the cooperative, and were therefore shielded from judicial review by the business judgment rule” (Konrad v. 136 E. 64th St. Corp., 254 A.D.2d 110 [1st Dept 1998], lv dismissed 92 N.Y.2d 1042 [1999] ).  Contrary to plaintiff's contention, the cooperative was entitled to seek the above-described release provided under paragraph 3.2.5 of the proprietary lease in connection with the repairs.

Plaintiff's sixth cause of action for breach of the warranty of habitability should be reinstated.  Real Property Law § 235–b (1) imposes the warranty under every residential lease, including cooperative proprietary leases, that the leased premises are “fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety.”  Under Real Property Law § 235–b(2), “Any agreement by a lessee or tenant of a dwelling waiving or modifying his rights as set forth in this section shall be void as contrary to public policy.”  Accordingly, although plaintiff's failure to procure insurance released the cooperative from liability for any contractual remedies, it was not released from its continuing and nondelegable obligations under Real Property Law § 235–b (see Park W. Mgt. Corp. v. Mitchell, 47 N.Y.2d 316, 327 [1979], cert denied 444 U.S. 992 [1979] ).

The continuing obligations under Real Property Law § 235–b render the claim timely, as the apartment was not deemed restored by the New York City Department of Housing Preservation and Development until in or about September 2023, which supports the allegations that the apartment remained uninhabitable during the preceding six-year statute of limitations period.  The allegations also support the application of the continuing wrong doctrine (see Garron v. Bristol House, Inc., 162 AD3d 857, 858–859 [2d Dept 2018] ).  The continuing wrong doctrine does not extend the period of available damages;  however, “plaintiff's recovery must be limited to damages incurred within the six years prior to commencement of the action” (id. at 859).  Although the cooperative urges that plaintiff was not entitled to withhold maintenance as a result of the alleged breach, it is undisputed that defendant United Nations Federal Credit Union (UNFCU) paid the maintenance arrears until it declared plaintiff in default under the loan documents.

We reject the cooperative's assertion at the pleadings stage that the claim is barred because plaintiff purportedly denied it access for repairs.  This is an issue of fact that cannot be resolved on a motion to dismiss.  The cooperative's further assertion that plaintiff's “misconduct” was the cause of the fire is another fact that has not been established at the pleadings stage, as the cooperative itself argued that the fire marshal deemed the fire an accident, and the duty applies to “conditions occasioned by ordinary deterioration, work stoppages by employees, acts of third parties or natural disaster” (Park W. Mgt. Corp., 47 N.Y.2d at 327).

Turning to the claims against UNFCU, the motion court properly dismissed the complaint against it.  Although plaintiff contends that UNFCU acted unreasonably by waiting nearly four years after receiving the cooperative's first notice of termination to pay his maintenance, under section VI of the loan security agreement, UNFCU was permitted but not obligated to take the steps it deemed necessary to preserve its collateral interest in the apartment's shares.  There is no dispute that plaintiff stopped paying his maintenance shortly after the fire, which permitted UNFCU to preserve the collateral by its chosen means, or to declare plaintiff in default, which it eventually did.  This was expressly permitted under section III, paragraph 2 of the loan security agreement, which provided that a default under the proprietary lease constituted a default under the loan documents.  Because his promissory estoppel claim arises out of UNFCU's election to declare him in default, the promissory estoppel allegations are governed by the contract, under which UNFCU performed according to its terms, warranting dismissal of both claims (see MatlinPatterson ATA Holdings LLC v Fed. Express Corp., 87 AD3d 836, 841–842 [1st Dept 2011], lv denied 21 NY3d 853 [2013] ).

UNFCU's representation in its July 12, 2022 letter and in further correspondence that the amounts it paid to the cooperative as maintenance would not be due until the loan's maturity or at payoff did not constitute an independent promise for the purposes of a promissory estoppel claim.  UNFCU's July 12, 2022 letter and other correspondence expressly informed plaintiff that his default under the proprietary lease in failing to pay maintenance constituted a default under the loan documents (id. at 842–843).  Further, plaintiff failed to allege specific facts that would support a finding that UNFCU owed him a fiduciary duty (see Max Markus Katz, P.C. v. Sterling Natl. Bank, 206 AD3d 533, 534 [1st Dept 2022] ).

In light of the above, plaintiff's third claim for a declaratory judgment declaring, among other things, that he was not in breach of his obligations under the respective agreements and defendants were not entitled to foreclose on his shares is duplicative of the contract claims and therefore properly dismissed (see e.g. Koretz v. 363 E. 76th St. Corp., 231 AD3d 596, 597 [1st Dept 2024] ).  Finally, the dismissal of the substantive claims against UNFCU required dismissal of the claim seeking a permanent injunction enjoining UNFCU from proceeding with the sale of his shares (see Weinreb v. 37 Apts. Corp., 97 AD3d 54, 58–59 [1st Dept 2012] ).

We have considered the remaining contentions and find them unavailing.