Opinion
12246-12246A Index No. 105137/11 Case No. 2019-3298 2019-3367 2019-3367
10-29-2020
BOARD OF MANAGERS OF BE@WILLIAM CONDOMINIUM, Plaintiff–Respondent, v. 90 WILLIAM ST. DEVELOPMENT GROUP LLC, et al., Defendants–Appellants, Procida Realty & Construction Corp. of NY, et al., Defendants.
Cohen & Marderosian, New York (Mark D. Marderosian of counsel), for 90 William st. Development Group LLC, SDS William LLC, 90 William Holding LLC, SDS Procida Development Group LLC, Dream SDS LLC, SD46 LLC, Louis V. Greco Jr. and Linda Greco, appellants. Bronstein, Gewirtz & Grossman, LLC, New York (Yitzchak E. Soloveichik of counsel), for Gamcrefk Trust, Steven M. Etkind, Rachel Foster and Alain Kodsi, appellants. Schwartz Sladkus Reich Greenberg Atlas LLP, New York (Stephen H. Orel of counsel), for respondent.
Cohen & Marderosian, New York (Mark D. Marderosian of counsel), for 90 William st. Development Group LLC, SDS William LLC, 90 William Holding LLC, SDS Procida Development Group LLC, Dream SDS LLC, SD46 LLC, Louis V. Greco Jr. and Linda Greco, appellants.
Bronstein, Gewirtz & Grossman, LLC, New York (Yitzchak E. Soloveichik of counsel), for Gamcrefk Trust, Steven M. Etkind, Rachel Foster and Alain Kodsi, appellants.
Schwartz Sladkus Reich Greenberg Atlas LLP, New York (Stephen H. Orel of counsel), for respondent.
Manzanet–Daniels, J.P., Mazzarelli, Moulton, Kennedy, JJ.
Order, Supreme Court, New York County (Melissa A. Crane, J.), entered March 13, 2019, which granted plaintiff's motion for summary judgment as to liability on its claim for breach of contract as against defendant 90 William St. Development Group LLC (the sponsor) for failure to timely obtain a permanent certificate of occupancy and failure to construct the building according to the offering plan, and denied the sponsor and SDS Procida Equities LLC's (together with the sponsor, the sponsor defendants) cross motion to vacate certain orders granted pursuant to CPLR 306–b and for sanctions, unanimously affirmed, with costs. Order, same court and Justice and date of entry, which denied defendants Steven Etkind, Rachel Foster, Alain Kodsi, and Gamcrefk Trust's (together, the Gamcrefk defendants) motion to dismiss the amended complaint as against them and for leave to renew and reargue plaintiff's motion to add them and others as parties, unanimously affirmed as to the denial of the motion to dismiss and to renew, and appeal therefrom otherwise dismissed, without costs, as taken from a nonappealable order.
The sponsor's conceded failure to obtain a permanent certificate of occupancy within two years from the first closing as required by the offering plan establishes its breach of the offering plan (see Board of Mgrs. of Loft Space Condominium v. SDS Leonard, LLC, 142 A.D.3d 881, 882, 38 N.Y.S.3d 23 [1st Dept. 2016] ), as does the sponsor's concession that certain aspects of the building were not constructed according to the offering plan. Moreover, as the motion court determined, although the sponsor's ability to obtain temporary certificates of occupancy is some evidence that the building was substantially in compliance with the Building Code, it is not dispositive of whether the building was converted to the specifications under the offering plan. Plaintiff established the existence of the defects through several expert reports. To the extent the sponsor defendants maintain that the defects identified in the reports were not material breaches, they will have an opportunity to demonstrate as much at a hearing on damages.
The motion court correctly granted summary judgment to plaintiff as to liability on its fraudulent conveyance claims against the sponsor defendants and denied the Gamcrefk defendants' motion pursuant to CPLR 3211 to dismiss the fraudulent conveyance claims as against them. Defendants contend that the claims under Debtor and Creditor Law former §§ 274 and 274 should be dismissed because no fiduciary or confidential relationship between the parties was alleged, citing e.g. Sutton Apts. Corp. v. Bradhurst 100 Dev. LLC , 107 A.D.3d 646, 648, 968 N.Y.S.2d 483 (1st Dept. 2013). However, the Court of Appeals did not impose such a requirement in sustaining Debtor and Creditor Law former §§ 273 and 274 claims ( 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] ), and we did not impose the requirement in subsequent cases (see e.g. 172 Van Duzer Realty Corp. v. 878 Educ., LLC, 142 A.D.3d 814, 817–818, 37 N.Y.S.3d 117 [1st Dept. 2016] ; Eastern Concrete Materials, Inc./NYC Concrete Materials v. DeRosa Tennis Contrs., Inc., 139 A.D.3d 510, 511–512, 33 N.Y.S.3d 164 [1st Dept. 2016] ).
Debtor and Creditor Law, article 10, was repealed in December 2019 and a new article 10 added, effective April 4, 2020 (L 2019, ch 580, § 2).
Contrary to defendants' contentions with respect to intentional fraudulent conveyance claims, Debtor and Creditor Law former § 276 did not require the debtor to know of the creditor's claim at the time of the transfer, as it expressly applied to "present and future creditors" (see Nonas v. Romantini, 271 A.D.2d 292, 706 N.Y.S.2d 109 [1st Dept. 2000] ). As to both sets of defendants, the motion court correctly determined that plaintiff pleaded and established several "badges of fraud" surrounding the millions of dollars in unexplained transfers to defendants (see Dempster v. Overview Equities, Inc., 4 A.D.3d 495, 498, 773 N.Y.S.2d 71 [2d Dept. 2004], lv denied 3 N.Y.3d 612, 788 N.Y.S.2d 667, 821 N.E.2d 972 [2004] ).
The motion court properly denied the sponsor's motion for sanctions against plaintiff for its purported abuse of the procedure for extending the time for service under CPLR 306–b. Defendants' first motion for the same relief in October 2014 was untimely under CPLR 3211(e). Moreover, defendants failed to show that they were prejudiced by the extensions of time (see Leader v. Maroney, Ponzini & Spencer, 97 N.Y.2d 95, 107, 736 N.Y.S.2d 291, 761 N.E.2d 1018 [2001] ). In any event, there is no evidence in the record that the court was misled in granting the extensions (see 22 NYCRR 130–1.1 [c]).
With respect to the Gamcrefk defendants' motion to renew plaintiff's motion to add them as parties, we note that plaintiff's motion was unopposed. The Gamcrefk defendants failed to offer new facts in support of renewal (see Melcher v. Apollo Med. Fund Mgt. L.L.C., 105 A.D.3d 15, 23, 959 N.Y.S.2d 133 [1st Dept. 2013] ).
No appeal lies from the denial of a motion to reargue ( Rosado v. Edmundo Castillo Inc., 54 A.D.3d 278, 865 N.Y.S.2d 12 [1st Dept. 2008] ).