Wednesday, 20 July 2011 10:08

Board of Managers of the Chelsea 19 Condominium v. Chelsea 19 Associates

New York Supreme Court

Board of Managers of the Chelsea 19 Condominium v. Chelsea 19 Associates

73 A.D.3d 581 (2010) 905 N.Y.S.2d 8

THE BOARD OF MANAGERS OF THE CHELSEA 19 CONDOMINIUM et al., Appellants,

v.

CHELSEA 19 ASSOCIATES et al., Respondents.

2851, 2851A, 105347/08

Appellate Division of the Supreme Court of New York, First Department.

Decided May 20, 2010.

Concur—Gonzalez, P.J., Friedman, DeGrasse, Manzanet-Daniels and Román, JJ.

The motion court correctly held that the individual unit owners lack standing to seek damages for injury to the building's common elements (see Kerusa Co. LLC v W10Z/515 Real Estate Ltd. Partnership, 504 [2008]). We otherwise affirm the result, albeit not for the motion court's reasons (see Fenton v Consolidated Edison Co. of N.Y.,  125 [1991], lv denied 78 N.Y.2d 856 [1991]). The contract claims, which are based on the architect's description of the building's condition included in the offering plan and incorporated in the purchase agreements, are flatly contradicted by the "as is" clause and related disclaimer provisions in those documents (see Rivietz v Wolohojian,  [2007]); those provisions are not undermined by the general statement in those documents that the building was in "good" condition. All of the fraud and related tort claims arise from the same provisions said to have been breached and seek the same damages, and thus merely duplicate the insufficient contract claims (see Moustakis v Christie's, Inc., 637 [2009]; ESBE Holdings, Inc. v Vanquish Acquisition Partners, LLC,  398-399 [2008]). Moreover, plaintiffs are foreclosed from establishing reliance by the specific disclaimers (see Citibank v Plapinger, 94-95 [1985]), and by their undertaking to conduct their own investigation (see Parker E. 67th Assoc. v Minister,


Elders & Deacons of Refm. Prot. Dutch Church of City of N.Y.,  454 [2003], lv denied 100 N.Y.2d 502 [2003]). Absent a confidential or fiduciary relationship, defendants did not have a duty of disclosure (see Dembeck v 220 Cent. Park S., LLC, 492 [2006]), and common-law fraud may not be asserted against a condominium sponsor based on omissions from the offering plan (see Kerusa Co. LLC v W10Z/515 Real Estate Ltd. Partnership, [2009]). The claim for negligent performance of contract is not cognizable (see City of New York v 611 W. 152nd St.,  126 [2000]). The claims for wrongful transfers of development rights, sounding in conversion, unjust enrichment and breach of fiduciary duty, are subject to a three-year limitations period and therefore untimely (see Vigilant Ins. Co. of Am. v Housing Auth. of City of El Paso, Tex., 44-45 [1995]; Lambert v Sklar,  566 [2006]; Kaufman v Cohen, 118 [2003]). This is so with respect to the fiduciary breach claim regardless of whether it is based on allegations of actual fraud (see Kaufman v Cohen at 119), as there is no viable fraud claim based on affirmative misrepresentation (see Dragon Inv. Co. II LLC v Shanahan, 404 [2008]). The claims against the architect largely mirror the insufficient claims against the sponsor and its principal; to the extent the claims against the architect sound in professional negligence, they are untimely (see IFD Constr. Corp. v Corddry Carpenter Dietz & Zack, 91-92 [1999]). In view of the foregoing, it is unnecessary to address whether the board was authorized to commence this action, and, accordingly, we dismiss the appeal from the order denying renewal.

Additional Info

  • Court:: State Supreme Court
  • State/Country:: New York
  • Type: Court Cases
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