Opinion
No. 14982/2012.
01-11-2016
BOARD OF MANAGERS OF THE 125 NORTH 10TH CONDOMINIUM, Plaintiff, v. 125 NORTH 10, LLC, d/b/a 125 North 10 LLC, 125N 10 d/b/a 125 North 10 LLC, 125 N 10 d/b/a 125 North 10 MM, LLC, Savanna Services L.L.C d/b/a Savanna Partners d/b/a Savanna Fund, Christopher Schlank, Nicholas Bienstock a/k/a Nicholas C. Bienstock a/k/a Nicholas Churnham Bienstock, Peter Petron, John Fraser a/k/a John R. Fraser, Investcorp International Holdings Inc. d/b/a Investcorp, Ryder Construction, Inc., Carl Jaccarino, Robert M. Reich, LLC, Robert M. Rich, Anthony Cucich Architects d/b/a A. Cucih Architects, Anthony Cucich a/k/a Anthony A. Cucich, Scarano Architect, PLLC d/b/a Scarano & Associates, Sharon Engineering P.C. d/b/a Sharon Engineering, P.C., Ronan Sharon, Penmark Realty Corporation d/b/a Penmark Realty Corp. d/b/a Penmark, Core Group Marketing LLC d/b/a Core Group Marketing, LLC, S. Schwartz Engineering, PLLC d/b/a S. Schwartz Associates LLC d/b/a Schwartz S d/b/a S. Schwartz Associates Consulting Engineers, Simon Schwartz, Frank Seta & Associates, LLC, Saeid S. Seta a/k/a Frank Seta, “John Doe No.1 through John Doe # 10, inclusive, the last ten names being fictitious and unknown to plaintiff, the persons or parties intended being the persons or corporations or entities who provided construction services and/or design and fabrication services at the premises described herein, Defendants. 125 North 10, LLC d/b/a 125 North 10 LLC, 125 N 10 d/b/a 125 North 10 LLC, 125 N 10 d/b/a 125 North 10 MM, LLC, Savanna Services L.L.C. d/b/a Savanna Partners d/b/a Savanna Fund, Christopher Schlank, Nicholas Bienstock, a.k.a. Nicholas Cburham Bienstock, Peter Petron, John Fraser a/k/a John R. Fraser, Investcorp International Holdings Inc. d/b/a Investcorp, Third Party Plaintiffs, v. Anthony Cucich Architects d/b/a A Cucich Architects, Scarano Architect, PLLC d/b/a Sacarano & Associates Architects, Sharon Engineering, P.C. d/b/a Sharon Engineering, P.C., Ronan Sharon, S. Schwartz Engineering PLLC d/b/a S Schwartz Associates LLC d/b/a Schwartz S d/b/a S. Schwartz Associates Consulting Engineers, Frank Seta & Associates, LLC and Ryder Construction, Inc., Third Party Defendants. Ryder Construction, Inc., Second Third–Party Plaintiff, v. KNS Building Restorations, Inc., Hi–Lume Corporation, Castle Construction Group, Inc., Doortec Architectural Metal & Glass, Maspeth Steel Fabricators, Inc. Mulroy Masonry, Inc., M & D Fire Door, ADS Windows, Inc., Glen Island Construction, Corp., Stucco Specialists, Inc., Williamsburg Parquet Flooring Co., H2L Millwork Construction Corp., Roz–A–Lite Electrical Contracting, Inc., Dynamic Sheet Metal Ltd., Brook Plumbing & Heating Corp., Imperial Painting & Fireproofing, Inc., d/b/a The Gold Group, Shabco Construction Services, Inc., Capitol Fire Sprinkler CPO., Inc. and Rotavele Elevator, Inc., Second Third–Party Defendants.
Jennifer J. Bock, Esq., Great Neck, for Plaintiffs. Andrea Roschelle, Esq., New York, for Defendants.
Jennifer J. Bock, Esq., Great Neck, for Plaintiffs.
Andrea Roschelle, Esq., New York, for Defendants.
CAROLYN E. DEMAREST, J.
The following e-filed papers read herein:
| Papers | Numbered |
|---|---|
| Notice of Motion/Order to Show Cause/ Petition/Cross Motion and Affidavits (Affirmations) Annexed | 221–242 |
| Opposing Affidavits (Affirmations) | 325–338 |
| Reply Affidavits (Affirmations) | 480–482 |
| Affidavit (Affirmation) Memorandum of Law | 339 |
In this action by plaintiff Board of Managers of the 125 North 10th Condominium (plaintiff), defendants 125 North 10, LLC (the Sponsor), and 125 North 10 MM, LLC (North10 MM), Savanna Services L.L.C d/b/a Savanna Partners d/b/a Savanna Fund (Savanna), Christopher Schlank (Schlank), Nicholas Bienstock (Bienstock), Peter Petron (Petron), John Fraser a/k/a John R. Fraser (Fraser), Investcorp International Holdings Inc. d/b/a Investcorp (Investcorp), and Core Group Marketing, LLC (Core) (collectively, the Non–Sponsor Defendants) move, under motion sequence number 17, for an order: (1) granting partial summary judgment in favor of the Sponsor dismissing plaintiff's second, third, fourth, fifth, and sixth causes of action as against it, and (2) granting summary judgment in favor of the Non–Sponsor Defendants dismissing plaintiff's complaint in its entirety as against: (a) Schlank, Bienstock, Petron, and Fraser (collectively, the Sponsor Principals), (b) North10 MM, Savanna and Investcorp (the Sponsor Affiliates), and (c) the Sponsor's selling agent, Core. The Sponsor moves, in the alternative, for a more definite statement pursuant to CPLR 3024(a).
BACKGROUND
The Sponsor is a duly-formed Delaware limited liability company that was created on May 15, 2006. As set forth in the Sponsor's Operating Agreement dated June 27, 2006, the Sponsor is comprised of three members, namely, North10 MM, which is its managing member, and Optinvest IV, LLC (Optinvest) and Savanna Williamsburg LLC (Williamsburg), which are both non-managing members. Fraser, Petron, Schlank, and Bienstock are not members or employees of the Sponsor. Fraser was formerly the chairperson and president of both North10 MM and Optinvest, and Petron was a member of the Sponsor's executive committee. Schlank and Bienstock are members of the Williamsburg member.
Pursuant to a contract of sale dated June 27, 2006, the Sponsor, as the purchaser, and 125 North Tenth Street LLC, as the seller, agreed to the purchase and sale of real property located at 125 North Tenth Street, in Williamsburg, Brooklyn (the property). The Sponsor's Operating Agreement provided that the Sponsor was formed to acquire the property and to own, hold, develop, operate, sell, finance, and convert it to condominium ownership. Thereafter, the Sponsor promulgated a condominium offering plan for the establishment of condominium ownership of property, including the land and building, pursuant to the Condominium Act (the Offering Plan), which was accepted for filing with the Department of Law of the State of New York on April 16, 2007 and was thereafter amended 18 times. The Sponsor developed the property to include 86 residential units, 8 storage lockers, 24 cabanas, and 51 parking units. The building consists of two six-story structures containing condominium units with a common cellar containing a parking garage. The Offering Plan contains representations by the Sponsor that it would construct the building and the units in accordance with plans, specifications, and applicable law.
As set forth in the Offering Plan, Schlank, Bienstock, Petron, and Fraser were the principals of the Sponsor. On November 14, 2006, before the Offering Plan was accepted for filing on April 16, 2007, Schlank, Bienstock, Petron, and Fraser, in their individual capacities, as the Principals of Sponsor, executed a Certification of Sponsor and Principals (the Certification), which was thereafter appended to the Offering Plan. The Certification was also executed by the Sponsor by North10 MM, as its managing member, and by Fraser, on behalf of North10 MM, as North10 MM's president. The Certification, which is mandated to be included in the Offering Plan pursuant to General Business Law § 362–e (6), represented that the Sponsor Principals had read the entire Offering Plan, investigated the facts in the Offering Plan and the underlying facts, exercised due diligence to form a basis for this Certification, and jointly and severally certified that the Offering Plan does, and that documents submitted thereafter by them which amended or supplemented the Offering Plan would:
“(i) set forth the detailed terms of the transaction and be complete, current and accurate; (ii) afford potential ... purchasers ... an adequate basis upon which to found their judgment; (iii) not omit any material fact; (iv) not contain any untrue statement of a material fact, (v) not contain any fraud, deception, concealment, suppression, false pretense or fictitious or pretended purchase or sale; (vi) not contain any promise or representation as to the future which is beyond reasonable expectation or unwarranted by existing circumstances; (vii) not contain any representation or statement which is false, where [they]: (a) knew the truth; (b) with reasonable effort could have known the truth, (c) made no reasonable effort to ascertain the truth; or (d) did not have knowledge concerning the representation or statement made.”
Core was the Sponsor's selling agent, pursuant to a July 1, 2006 Sales and Marketing Agreement (the Sponsor–Core Sales and Marketing Agreement), under which the Sponsor engaged Core as its exclusive agent to market and sell the condominium units. In connection with the condominium offering, each purchaser of a unit executed a form purchase agreement (the Purchase Agreement) with the Sponsor, as the seller, which listed Core as the selling agent.
Section 1 of the Purchase Agreement provided that the purchaser acknowledged receiving and reading a copy of the Offering Plan for the condominium and all amendments thereto, and that “[t]he [Offering] Plan is incorporated herein by reference and made a part hereof with the same force and effect as if set forth at length.” Section 17.2 of the Purchase Agreement provided that “[t]he construction of the [b]uilding and the [u]nit and the correction of any defects in the construction thereof to the extent required under the [Offering] Plan are the sole responsibility of [the] Sponsor.” The Purchase Agreements were signed by the individual condominium unit purchasers and by the Sponsor, by its managing member, North10 MM. Although the form Purchase Agreement contained in the Offering Plan set forth the printed name of Fraser, as president of North10 MM and the authorized signatory for North10 MM, the actual Purchase Agreements were signed by Schlank, on behalf of North10 MM, with his title listed therein as North10 MM's member.
On July 24, 2013, plaintiff, on behalf of itself as the board of managers of the condominium and the unit owners, commenced this action against numerous defendants, including the Sponsor and the Non–Sponsor Defendants, as well as project managers, architects, the managing agent, consultants, engineers, providers of interior design services, and the general contractor involved with the condominium project, by the filing of a summons with notice. On August 15, 2012, plaintiff filed and served an amended summons with notice. Plaintiff has also named as defendants 125 North 10 LLC, 125N 10 d/b/a 125 North 10 LLC, 125 N 10, and Savanna Fund (collectively, the Fictitious Entities), who the Sponsor claims are unaffiliated, fictitious, or otherwise unknown to it and have no connection to the condominium offering. On September 17, 2013, plaintiff filed and served its original complaint, which contained 10 causes of action, alleging that construction and design defects exist in the building and that the design and construction of the building and the units deviated from what was promised to the unit owners.
By the court's decision and order dated January 6, 2014, plaintiff's complaint was dismissed as to certain defendants and plaintiff was granted leave to replead as against one of the defendants, Penmark Realty Corporation d/b/a Penmark Realty Corp. d/b/a Penmark (Penmark) (Board of Mgrs. of the 125 N. 10th Condominium v. 125 N. 10, LLC, 42 Misc.3d 1214[A], 2014 N.Y. Slip Op 50035 [U], *20 [Sup Ct, Kings County 2014] ). On February 3, 2014, plaintiff filed and served an amended complaint, which asserted four additional causes of action as against Penmark. On February 27, 2014 and February 28, 2014, respectively, the Sponsor and the Non–Sponsor Defendants and Ryder Construction, Inc. (Ryder) commenced third-party actions.
By the court's decision and order dated November 7, 2014, plaintiff's amended complaint as against Penmark was dismissed, and the third-party action commenced by the Sponsor and the Non–Sponsor Defendants was dismissed as against various third-party defendants (Board of Mgrs. of the 125 N. 10th Condominium v. 125 N. 10, LLC, 45 Misc.3d 1215[A], 2014 N.Y. Slip Op 51593[U] [Sup Ct, Kings County 2014] ). Thereafter, by a decision and order dated February 10, 2015, plaintiff's amended complaint was dismissed as against Ryder, and the Sponsor's cross-claims for indemnification were deemed converted to third-party claims, and the Sponsor was directed to serve and file an amended complaint (Board of Managers of the 125 North 10th Condominium v. 125 North 10, LLC, 2015 WL 535957 [Sup Ct, Kings County 2015] ). On March 6, 2015 and March 11, 2015, the Sponsor and Non–Sponsor Defendants and Ryder filed third-party complaints.
Plaintiff's amended complaint, which contains 472 paragraphs and 10 causes of action, seeks damages of $15 million and an award of punitive damages and attorneys' fees. Asserted as against the Sponsor and Non–Sponsor Defendants are plaintiff's first cause of action alleging breach of contract, plaintiff's second cause of action alleging breach of express warranty, plaintiff's third and fourth causes of action alleging negligence and negligent misrepresentation, plaintiff's fifth cause of action alleging strict liability, plaintiff's sixth cause of action alleging fraud, plaintiff's ninth cause of action alleging the commission of deceptive trade practices pursuant to General Business Law § 349, and plaintiff's tenth cause of action alleging the commission of deceptive advertising practices pursuant to General Business Law § 350. In these causes of action, the term “Sponsor” is used globally to be inclusive of the Sponsor as well as the Sponsor Principals, North10 MM, the Sponsor Affiliates, Core, and the Fictitious Entities. On May 15, 2015, the Sponsor and the Non–Sponsor Defendants filed their instant motion.
DISCUSSION
Plaintiff's First Cause of Action for Breach of Contract
Plaintiff's first cause of action for breach of contract alleges that the Sponsor is in breach of the Purchase Agreements by failing to construct the building in accordance with the Offering Plan, which was incorporated into the Purchase Agreements. It asserts that pursuant to the Offering Plan (page 93), the Sponsor was and still is obligated to ensure that the work was performed “with a quality of construction comparable to the current prevailing local standards and substantially in accordance with the Plans and Specifications for the construction work filed with the Building Department and other appropriate government authorities.” It further asserts that the Offering Plan (page 96) also provides that the Sponsor will be liable for construction problems and defects where “such defects are due to substantially improper workmanship or construction practices [by the Sponsor's contractors] or the use of materials that are substantially and materially at variance with the Plans and Specifications.” It asserts that due to the various defects throughout the areas of the building, including the roofs, exterior walls, foundation, and base joints, the Sponsor is liable to it for breach of contract.
The Non–Sponsor Defendants, in seeking dismissal of this cause of action as against them, argue that since the Sponsor is a limited liability company, North10 MM, as its member, cannot be held liable for the Sponsor's contractual obligations by virtue of its status as a member thereof (see Limited Liability Company Law § 609[a] ; Retropolis, Inc. v. 14th St. Dev. LLC, 17 AD3d 209, 210 [1st Dept 2005] ). They further argue that the Sponsor Principals and the Sponsor Affiliates are not even members of the Sponsor, and are, therefore, exempt from personal liability for the Sponsor's contractual obligations. They also argue that while plaintiff alleges that the limited liability company veil of the Sponsor should be pierced, its allegations are insufficient to warrant such a piercing so as to hold them individually liable.
As noted above, the Sponsor does not seek summary judgment dismissing this cause of action as against it.
As to the Sponsor Principals, however, plaintiff's breach of contract claim against them is predicated upon the fact that they executed the Certification in their individual capacities. “[I]t is well settled within the Second Department that a plaintiff may seek damages for a breach of contract against the individual principals of the sponsor, based upon certification of the offering plan and the incorporation of the terms of the offering plan in a specific provision of the purchase agreement' “ (Board of Mgrs. of 647 & 649 Place Condominium v. 647 & 649 Wash. Ave., LLC, 49 Misc.3d 1216[A], 2015 N.Y. Slip Op 51693[U], *4–5 [Sup Ct, Kings County 2015], quoting Board of Mgrs. of the 231 Norman Ave. Condominium v. 231 Norman Ave. Prop. Dev., 36 Misc.3d 1232[A], 2012 N.Y. Slip Op 51573[U], *12 [Sup Ct, Kings County 2012]; see also Birnbaum v. Yonkers Contr. Co., 272 A.D.2d 355, 357 [2d Dept 2000] ; Zanani v. Savad, 228 A.D.2d 584, 585 [2d Dept 1996] ; Board of Mgrs. of Olive Park Condominium v. Maspeth Props. LLC, 2014 N.Y. Slip Op 33012[U], *5 [Sup Ct, Kings County 2014]; Board of Mgrs. of 550 Grand St. Condominium v. Schlegel LLC, 43 Misc.3d 1211[A], 2014 N.Y. Slip Op 50576[U], *11 [Sup Ct, Kings County 2014]; Board of Mgrs. of 14 Hope St. Condominium v. Hope St. Partners, LLC, 40 Misc.3d 1215[A], 2013 N.Y. Slip Op 51201[U], *3 [Sup Ct, Kings County 2013]; Board of Mgrs. of the Crest Condominium v. City View Gardens Phase II, LLC, 35 Misc.3d 1223[A], 2012 N.Y. Slip Op 50826[U], *4 [Sup Ct, Kings County 2012]; Sternstein v. Metropolitan Ave. Development LLC, 32 Misc.3d 1207[A], 2011 N.Y. Slip Op 51206[U], *5 [Sup Ct, Kings County 2011]; Kikirov v. 335 Realty Assoc. LLC, 31 Misc.3d 1212[A], 2011 N.Y. Slip Op 50600[U], *7 [Sup Ct, Kings County 2011] ).
Here, the Sponsor Principals individually and North10 MM as a member of Sponsor executed the Certification and the terms of the Offering Plan were incorporated into the Purchase Agreements by specific provisions in the Purchase Agreements. Specifically, as noted above, section 1 of the Purchase Agreement expressly stated that the purchaser received and read the Offering Plan and that the Offering Plan was “incorporated [t]herein by reference and made a part [t]hereof with the same force and effect as if set forth at length.” Section 3 of the Purchase Agreement further provided that the purchaser agreed to purchase the condominium unit “[u]pon and subject to the terms and conditions set forth [t]herein,” which incorporated the Offering Plan. Section 35 of the Purchase Agreement additionally provided that “[t]his Agreement, together with the [Offering] Plan, ... constitutes the entire agreement between them with respect to the subject matter hereof.” Thus, inasmuch as the Certification contained in the Offering Plan was executed by Noth10 MM and the Sponsor Principals, and was incorporated by reference into the Purchase Agreements, the instant motion, insofar as it seeks summary judgment dismissing plaintiff's first cause of action for breach of contract as against North10 MM and the Sponsor Principals, must be denied.
As to the Sponsor Affiliates, plaintiff seeks to hold them liable for the Sponsor's underlying obligations, as alter egos of the Sponsor under the doctrine of piercing the corporate veil, which applies to limited liability companies (see Retropolis, Inc., 17 AD3d at 210 ). “A party seeking to pierce the corporate veil must establish that (1) the owners exercised complete domination of the corporation with respect to the transaction attacked, and (2) such domination was used to commit a fraud or wrong against the plaintiff which resulted in the plaintiff's injury” (Edrich v. MMAL Corp., ––– AD3d –––, 2015 N.Y. Slip Op 09281, *2 [2d Dept 2015]; see also Matter of Morris v. New York State Dept. of Taxation & Fin., 82 N.Y.2d 135, 141 [1993] ; Old Republic Natl. Tit. Ins. Co. v. Moskowitz, 297 A.D.2d 724, 725 [2d Dept 2002] ; Hyland Meat Co. v. Tsagarakis, 202 A.D.2d 552, 552 [2d Dept 1994] ). In order for a plaintiff to pierce the corporate veil, it “must demonstrate that a court in equity should intervene because the [members] of the [limited liability company] exercised complete domination over it in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a [fraud or] wrong that resulted in injury to [it]” (East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc., 66 AD3d 122, 126 [2d Dept 2009], affd 16 NY3d 775 [2011] ; see also Matter of Morris, 82 N.Y.2d at 140–141 ; Love v. Rebecca Dev., Inc., 56 AD3d 733, 733 [2d Dept 2008] ; Millennium Constr., LLC v. Loupolover, 44 AD3d 1016, 1016 [2d Dept 2007] ).
Here, plaintiff's amended complaint, in paragraphs 19 and 21, merely conclusorily alleges that the Sponsor Affiliates “owned, operated, controlled and/or acted as the alter ego of the Sponsor,” and that they, therefore, exercised complete domination and control over it. These bare allegations do not suffice to support the equitable relief of piercing the corporate veil.
Plaintiff's amended complaint, in paragraph 47, further alleges that the Sponsor Affiliates “were actively involved in the Project and are identified as such in the Offering Plan.” Plaintiff, though, does not point to any specific provisions in the Offering Plan. Instead, plaintiff annexes agreements between the Sponsor and other parties involved in the condominium project. Plaintiff notes that the Sponsor–Core Sales and Marketing Agreement stated that the Sponsor had an office c/o Savanna Partners, at 10 East 53rd Street in Manhattan. However, Sponsor–Core Sales and Marketing Agreement was executed by the Sponsor, by Fraser, as its president, and not by Savanna Partners. Plaintiff also notes that an AIA Standard Form Agreement was stated to be between the Owner, who is listed as Sponsor c/o Investcorp at 280 Park Avenue in Manhattan, and Ryder, as construction manager for the building. That Agreement, however, was also executed by Fraser, without any title, under “Owner,” and not by Investcorp. Similarly, plaintiff points to another AIA Standard Form Agreement executed by Ryder, which was signed by the Sponsor, c/o Investcorp, by Fraser, but was not signed by Investcorp. It also notes that an Architect/Owners Agreement dated July 12, 2006, which was executed by Anthony Cucich, Architect, and the Sponsor, by Fraser, was addressed to Savanna Partners at 10 West 53rd Street. None of these documents, however, show that Savanna or Investcorp exercised complete domination over the Sponsor so as to be its alter ego, nor do these third party contracts create privity between Savanna and plaintiff.
Plaintiff asserts that Fraser's execution of this agreement without any title raises issues regarding whether he was signing it in his individual capacity, and whether the veil of the Sponsor should be pierced as to him. Fraser denies that he signed it other than on behalf of the Sponsor. In any event, as discussed above, Fraser may be held individually liable for breach of contract based upon his execution of the Certification.
While plaintiff argues that summary judgment is premature as it needs further discovery as to Savanna and Investcorp and, pursuant to CPLR 3212(f), a court may deny a motion for summary judgment to allow the opposing party to obtain further discovery where “it appear[s] from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated,” here, plaintiff has failed to indicate what it expects to uncover if summary judgment is postponed or that discovery would lead to any relevant evidence (see Williams v. Spencer–Hall, 113 AD3d 759, 760 [2d Dept 2014] ; Lopez v. WS Distrib., Inc., 34 AD3d 759, 760 [2d Dept 2006] ; Frith v. Affordable Homes of Am., 253 A.D.2d 536, 537 [2d Dept 1998] ). “The mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered during the discovery process is an insufficient basis for denying a summary judgment motion” (Winzelberg v. 1319 50th St. Realty Corp., 114 AD3d 674, 674 [2d Dept 2014] ).
Moreover, domination over corporate or limited liability company conduct in a particular transaction, standing alone, is insufficient to support the imposition of personal liability on the corporate owner or limited liability company member (see East Hampton Union Free School Dist., 66 AD3d at 126 ; AHA Sales, Inc. v. Creative Bath Prods., Inc., 58 AD3d 6, 24 [2d Dept 2008] ). Rather, “the party seeking to pierce the corporate [or limited liability company] veil must also establish that the owners, through their domination, abused the privilege of doing business in the corporate [or limited liability company] form' “ (East Hampton Union Free School Dist., 66 AD3d at 126, quoting Matter of Morris, 82 N.Y.2d at 142 ; see also Gateway I Group, Inc. v. Park Ave. Physicians, P.C., 62 AD3d 141, 145–146 [2d Dept 2009] ; Lawlor v. Hoffman, 59 AD3d 499, 500 [2d Dept 2009] ; Love, 56 AD3d at 733 ). Plaintiff argues that it has alleged that such domination was used to commit a fraud or wrong against it because its amended complaint sets forth allegations of fraud perpetrated by the Sponsor Affiliates by stating that they “knowingly and intentionally failed to comply with the provisions of the Offering Plan by using inferior materials and shoddy workmanship to increase [their] own profit margin to the detriment of the [r]esidential [u]nit [o]wners,” and despite “knowing of the aforementioned problems and deficiencies, [the] Sponsor represented that the [b]uilding was free of substantial defects and did not violate the New York City Building Code or any other applicable statutes, rules, ordinances or regulations.”
This argument is rejected as these allegations, which essentially claim that the Sponsor knowingly breached the terms of the Offering Plan, do not allege a fraud claim independent of plaintiff's breach of contract claim. Moreover, “[f]actors to be considered in determining whether the owner has abused the privilege of doing business in the corporate form' include whether there was a failure to adhere to corporate formalities, inadequate capitalization, commingling of assets, and use of corporate funds for personal use' “ (East Hampton Union Free School Dist., 66 AD3d at 127, quoting Millennium Constr., LLC, 44 AD3d at 1016–1017 ; see also Gateway I Group, Inc., 62 AD3d 141 [2009] ; AHA Sales, Inc., 58 AD3d at 24 ). Plaintiff has failed to allege facts indicating a failure to adhere to the formalities of a limited liability company, inadequate capitalization, commingling of assets, or the use of the Sponsor's funds for personal use. Thus, the court finds that there is no basis to pierce the Sponsor's veil to hold the Sponsor Affiliates liable for breach of contract (see Sutton Apts. Corp. v. Bradhurst 100 Dev. LLC, 107 AD3d 646, 648 [1st Dept 2013] ; Retropolis, Inc., 17 AD3d at 210–211 ). Therefore, since there is no privity between plaintiff and the Sponsor Affiliates, with the exception of North10 MM, which signed the Certification, plaintiff's first cause of action must be dismissed as against them (see CPLR 3212[b] ).
As to Core, which was solely the Sponsor's selling agent pursuant to the Sponsor–Core Sale and Marketing Agreement, there was no contract between it and plaintiff or the unit owners that was breached. Thus, there is no basis for finding it liable for breach of contract, and summary judgment dismissing plaintiff's first cause of action as against Core must be granted (see CPLR 3212[b] ).
Plaintiff's Second Cause of Action for Breach of Express Warranty
Plaintiff's second cause of action for breach of express warranty alleges that the various “defendants” represented and expressly warranted that the quality of their services and/or work would be first class and be performed in a professional manner consistent with local prevailing standards of architecture, engineering, consulting, and construction, and would be in compliance with the plans and specifications and applicable Building Codes of the City of New York, and that their services and/or work would be free of deficiencies and defects. Plaintiff further alleges that these warranties were extended to the Sponsor, and, in turn, were then extended by the Sponsor to it and the residential unit owners, as the intended beneficiaries of these warranties. Plaintiff claims that “all” defendants breached their express warranties because the building was not designed, fabricated, or constructed correctly, defendants failed to perform labor and/or services in a first class and professional manner consistent with the local prevailing standards of architecture, engineering, consulting, and construction, the building does not comply with the plans and specifications and applicable Building Codes of the City of New York, and parts of the building were constructed in a deficient manner.
While the Sponsor and the Non–Sponsor Defendants did not perform any construction work themselves, plaintiff claims that the warranties extended were that the services performed by those who worked on the condominium project would perform them properly, and that Sponsor and Non–Sponsor Defendants failed to properly supervise performance by the other defendants. It is well established, however, that “[n]o warranty attaches to the performance of a service' “ since “[i]f the service is performed negligently, the cause of action accruing is for that of negligence,' “ and “if it constitutes a breach of contract, the action is for that breach' “ (Town of Poughkeepsie v. Espie, 41 AD3d 701, 706 [2d Dept 2007], lv dismissed 9 NY3d 1003 [2007], lv denied 15 NY3d 715 [2010], quoting Aegis Prods. v. Arriflex Corp. of Am., 25 A.D.2d 639, 639 [1st Dept 1966] ; see also Milau Assoc. v. North Ave. Dev. Corp., 42 N.Y.2d 482, 488 [1977] ; Mallards Dairy, LLC v. E & M Engineers & Surveyors, P.C., 71 AD3d 1415, 1417 [4th Dept 2010] [holding that where “a contract between the parties is for services, a cause of action for breach of warranty will not lie”]; Board of Mgrs. of the 125 N. 10th Condominium, 2014 N.Y. Slip Op 50035[U], *11).
Here, the express warranties plaintiff claims were breached were contractual promises to Sponsor and/or its contractor that the services rendered would be performed in a certain manner, the breach of which caused injury to plaintiff. However, with respect to the moving defendants, this claim is redundant of plaintiff's first cause of action for breach of contract as against the Sponsor and the Sponsor Principals (see Board of Mgrs. of the 125 N. 10th Condominium, 2014 N.Y. Slip Op 50035[U], *11; Board of Mgrs. of 550 Grand St. Condominium, 2014 N.Y. Slip Op 50576[U], *6; Board of Mgrs. of Woodpoint Plaza Condominium v. Woodpoint Plaza LLC, 24 Misc.3d 1233[A], 2009 N.Y. Slip Op 51715[U], *6 [Sup Ct, Kings County 2009] ). Plaintiff has not shown that any warranties were extended to plaintiff by the Sponsor Affiliates, and Core was not involved in the construction of the building. Thus, summary judgment dismissing plaintiff's second cause of action as against the Sponsor and Non–Sponsor Defendants must be granted (see CPLR 3212[b] ).
Plaintiff's Third and Fourth Causes of Action for Negligence
Plaintiff's third cause of action for negligence alleges that the Sponsor, “acting through” the Non–Sponsor Defendants, retained the engineers, architects, consultants, and general contractor to design, fabricate, and construct the building and had a duty to it and the residential unit owners to ensure that the work performed by them was of a quality consistent with the current prevailing local standards and substantially in accordance with the plans and specifications. It further alleges that the Sponsor failed to make proper inquiry into the backgrounds, experience, and abilities of those retained to perform the work, and that the Sponsor learned, prior to any sales of units, that the work performed was of an extremely poor quality and not consistent with the plans and specifications and the marketing materials disseminated in connection with the marketing of the condominium. It asserts that the Sponsor knew or should have known that the work, labor, and services performed in connection with the condominium project was performed in a negligent and careless manner, and that the Sponsor was negligent in its failure to properly supervise, monitor, and remedy the known defective work, labor, and services.
Plaintiff, in its third cause of action, further asserts that while the Sponsor became aware of the deficient quality of the work, it continued to allow the engineers, architects, consultants, and general contractor to work on the condominium project, concealed the fact that the building was not built in accordance with the Offering Plan, and recklessly disseminated the marketing materials, the Certification, the Architect's Report, and the Architect's Certification without amending these documents to reflect defects so as to notify prospective purchasers. According to plaintiff, the Sponsor, by its own communications and through the communications of Core, negligently and recklessly verbally ratified the representations found in the Offering Plan and the marketing materials to prospective purchasers and real estate agents. Plaintiff claims that as a result, it will be required to make substantial expenditures to cure defects and perform replacements and repairs at the building and to its components.
Plaintiff's fourth cause of action for negligence additionally alleges that Sponsor and the Non–Sponsor defendants were involved in the construction and/or the work, labor or services performed in connection with the building, and had a duty to it and the residential unit owners to ensure that the work was performed in accordance with the plans and specifications and local standards, and that they breached that duty by constructing a building with various defects. This cause of action, like the third cause of action, alleges that plaintiff was required to make substantial expenditures in order to cure the defects and perform the repairs.
Plaintiff's third and fourth causes of action for negligence, however, cannot be maintained. “Breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated” (Board of Mgrs. of Soho N. 267 W. 124th St. Condominium v. NW 124 LLC, 116 AD3d 506, 507 [1st Dept 2014] ; see also Clark–Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 389 [1987] ). “This legal duty must spring from circumstances extraneous to, and not constituting elements of the contract, although it may be connected therewith and dependent upon the contract' “ (Board of Mgrs. of Riverview at Coll. Point Condominium III v. Schorr Bros. Dev. Corp., 182 A.D.2d 664, 666 [2d Dept 1992], quoting Clark–Fitzpatrick, Inc., 70 N.Y.2d at 389 ). “Allegations of negligence based on defects in construction of a condominium sound in breach of contract rather than tort” (Board of Mgrs. of Soho N. 267 W. 124th St. Condominium, 116 AD3d at 507 ; see also Sutton Apts. Corp., 107 AD3d at 648 ; Board of Mgrs. of the Chelsea 19 Condominium v. Chelsea 19 Assoc., 73 AD3d 581, 582 [1st Dept 2010] ).
Here, the essence of plaintiff's claim is for breach of contract, not tort, since plaintiff has failed to allege that the Sponsor or Non–Sponsor Defendants breached a duty other than to build the building in the manner which they had promised (see Merritt v. Hooshang Constr., 216 A.D.2d 542, 543 [2d Dept 1995] [allegations that a builder negligently constructed a house sounded in contract, not tort] ). No independent legal duty to plaintiff has been alleged.
Furthermore, insofar as plaintiff purports to allege a claim for negligent misrepresentation, “[a] claim for negligent misrepresentation is not separate from a breach of contract claim where the plaintiff fails to allege a breach of any duty independent from contractual obligations” (Board of Mgrs. of Soho N. 267 W. 124th St. Condominium, 116 AD3d at 507 ; see also Greenman–Pedersen, Inc. v. Levine, 37 AD3d 250, 250 [1st Dept 2007] ). Here, plaintiff has failed to allege any legal duty that would give rise to an independent tort cause of action. Moreover, plaintiff seeks to recover the cost of repair, which constitutes economic loss, for which there is no recovery in negligence (see Key Intl. Mfg. v. Morse/Diesel, Inc., 142 A.D.2d 448, 450–452 [2d Dept 1988] ; Lake Placid Club Attached Lodges v. Elizabethtown Bldrs., 131 A.D.2d 159, 162 [3d Dept 1987] ).
Thus, plaintiff's negligence and negligent misrepresentation claims are duplicative of its first cause of action for breach of contract and fail to state a viable cause of action. Furthermore, as to both Core and the other non-Sponsor Defendants, plaintiff has alleged that these parties acted exclusively as agents for a disclosed principal, i.e., the Sponsor. Therefore, none of the non-sponsor defendants can be held liable for any alleged negligent misrepresentations (see Brasseur v. Speranza, 21 AD3d 297, 299 [1st Dept 2005] ). Consequently, summary judgment dismissing plaintiff's third and fourth causes of action for negligence as against the Sponsor and the Non–Sponsor Defendants must be granted (see CPLR 3212[b] ).
Plaintiff's Fifth Cause of Action for Strict Liability
Plaintiff's fifth cause of action for strict liability alleges that the Sponsor and the Non–Sponsor Defendants designed, and/or provided or was obligated to provide, plans, drawings and/or instructions for the condominium project and that the building was designed in a defective, negligent, and careless manner. Specifically, it alleges that the building lacks the proper protective railing as required by New York City Building Code § 27–334, and that the building fails to comply with fire protection construction requirements as mandated by Building Code § 27–341, ANSI standards for ADA accessibility, the National Electric Code, the requirement of Building Code § 27–754(c) regarding the proper discharge of exhaust gases, and the rules and regulations of the National Fire Protection Association. It further alleges that the Sponsor and the Non–Sponsor Defendants have failed and refused to repair the building, and that, due to the fact that the building was not designed, fabricated, and constructed properly in conformity with the Offering Plan and in compliance with the laws, rules, and regulations of the City of New York, the health and safety of the occupants of the building were and continue to be placed at risk because the building presents a health and safety hazard to the building occupants. It asserts that as a result, the Sponsor and the Non–Sponsor Defendants are strictly liable to plaintiff based upon the defective design, fabrication, and construction of the building, and inadequate warnings and instructions in connection with its construction.
This cause of action does not state a viable claim against the Sponsor or the Non–Sponsor defendants. Strict products liability for a defective product applies to one who is responsible for placing such a defective product into the stream of commerce, such as the manufacturer, distributor, and retailer (see Bielicki v. T.J. Bentey, Inc., 248 AD3d 657, 659 [2d Dept 1998] ). The Sponsor and the Non–Sponsor Defendants are not manufacturers, distributors, or retailers of any product. While it could be argued that the sponsor placed the allegedly defective structure into the steam of commerce, “[a] cause of action for ... strict products liability seeks to provide a remedy for an individual injured because of another's violation of an obligation imposed, not by contract, but by law” (Steckmar Natl. Realty & Inv. Corp. v. Case Co., 99 Misc.2d 212, 214 [Sup Ct, N.Y. County 1979] ). “It does not attempt to afford the injured party the benefit of any bargain but rather endeavors to place him [or her] in the position he [or she] occupied prior to the injury” (Board of Mgrs. of the 125 N. 10th Condominium, 2014 N.Y. Slip Op 50035[U], *12, quoting Steckmar Natl. Realty & Inv. Corp., 99 Misc.2d at 214 ). There is no claim of physical injury as a result of the defects alleged.
The crux of this cause of action is that the Sponsor and the Non–Sponsor Defendants caused the building to be defectively constructed so as to violate various codes and standards, requiring plaintiff to expend large amounts of money to rectify. While plaintiff alleges that the building presents a health and safety hazard to the occupants of the building due to the construction defects and violations, plaintiff has not alleged that it or any of the unit owners has suffered any physical injury resulting from the alleged defects or violations. Rather, plaintiff complains only of economic loss, which is “not the character of harm” “ for which recovery may be had under a strict products liability theory (Hole v. General Motors Corp., 83 A.D.2d 715, 717 [3d Dept 1981], quoting Steckmar Natl. Realty & Inv. Corp., 99 Misc.2d at 214 ; see also Key Intl. Mfg. v. Morse/Diesel, Inc., 142 A.D.2d 448, 450–452 [2d Dept 1988] ). Furthermore, plaintiff fails to allege that the building codes are the types of statutes that establish a specific standard of care and that plaintiff falls within the class of people intended to be benefitted by such statutes (see Board of Mgrs. of the 125 N. 10th Condominium, 2014 N.Y. Slip Op 50035[U], *12). Consequently, summary judgment dismissing plaintiff's fifth cause of action as against the Sponsor and the Non–Sponsor Defendants is mandated (see CPLR 3212[b] ).
Plaintiff's Sixth Cause of Action for Fraud
Plaintiff's sixth cause of action for fraud alleges that the Sponsor and the Non–Sponsor Defendants actively misrepresented and concealed the conditions at the building, and, in so doing, failed to comply with their respective obligations under the Offering Plan thereby actively defrauding the purchasers of the residential units. Specifically, it alleges that the Offering Plan omitted material facts and contained untrue facts and fraudulent representations with respect to the condition of the building, and false statements concerning the quality of the design, fabrication, and construction of the building. It asserts that the Sponsor and the Non–Sponsor Defendants knew or should have known that these representations or statements made in the Offering Plan were false. It further alleges that the marketing materials and the Certification also contained false statements concerning the design, fabrication, and construction of the building, and that the Sponsor and the Non–Sponsor Defendants disseminated the Offering Plan and marketing materials and/or caused them to be disseminated, knowing that they contained false representations. It also alleges that the Sponsor and the Non–Sponsor Defendants verbally ratified these false representations contained in the Offering Plan and marketing materials to prospective purchasers in order to induce them into purchasing residential units. Plaintiff claims that the residential unit owners relied on the false statements and representations contained in the Offering Plan, marketing materials, and Certification to their detriment and were induced to purchase units in the building, thereby sustaining damages.
It is well established that “[t]here is no private right of action where the fraud and misrepresentation relies entirely on alleged omissions in filings required by the Martin Act” (Berenger v. 261 W. LLC, 93 AD3d 175, 184 [1st Dept 2012] ; see also Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. Partnership, 12 NY3d 236, 247 [2009] ). “The Martin Act is a disclosure statute designed to protect the public from fraud in the sale of real estate securities and the Attorney General enforces its provisions and implementing regulations” (Berenger, 93 AD3d at 184 ; see also Kerusa Co. LLC, 12 NY3d at 245 ; CPC Intl. v. McKesson Corp., 70 N.Y.2d 268, 276–277 [1987] ). “[A] private litigant may not pursue a common-law cause of action where the claim is predicated solely on a violation of the Martin Act or its implementing regulations and would not exist but for the statute” (Assured Guar. [UK] Ltd. v. J.P. Morgan Inv. Mgt. Inc., 18 NY3d 341, 353 [2011] ; see also Board of Mgrs. of the 125 N. 10th Condominium, 2014 N.Y. Slip Op 50035[U], *15).
Here, plaintiff complains of omissions and misrepresentations made by the Sponsor and the Sponsor Principals in the Offering Plan. The Certification of the Sponsor and the Sponsor Principals stated that they were complying with the provisions of article 23–A of the General Business Law and the regulations promulgated by the Department of Law in 13 NYCRR Part 20. Article 23–A of the General Business Law and 13 NYCRR Part 20 set forth, in detail, “the format and content of offering plans and filings, including the word-for-word representation that must be made in the certification to be sworn to by the sponsor and the sponsor's principals in the offering plan,” and the Sponsor and the Sponsor Principals set forth the required representation pursuant to these statutory provisions (Kerusa, 12 NY3d at 244 ; see also 13 NYCRR 20.4 [b] ). Thus, since the Offering Plan and the Certification were filed in accordance with the Martin Act, claims of misrepresentations based solely upon such documents are preempted by the Martin Act (see Kerusa Co. LLC, 12 NY3d at 244–245 ). Consequently, plaintiff's sixth cause of action for fraud, insofar as it is based upon alleged false representations in the Offering Plan, is preempted and barred as a matter of law by the Martin Act.
Insofar as plaintiff further alleges fraud in alleged false representations contained in marketing materials distributed to the unit owners or verbal ratifications, the court notes that it has been held that where causes of action against a sponsor defendant are based upon alleged fraud and material misrepresentations contained, not only in the offering plan, but also in brochures, advertisements, and purchase agreements, as well as oral statements made by that defendant, they “are not precluded by the Martin Act, as they do not rel[y] entirely on alleged omissions from filings required by the Martin Act and the Attorney General's implementing regulations” (Board of Mgrs. of Marke Gardens Condominium v. 240/242 Franklin Ave., LLC, 71 AD3d 935, 936 [2d Dept 2010], quoting Kerusa Co. LLC, 12 NY3d at 247 ; see also Board of Mgrs. of 647 & 649 Place Condominium, 2015 N.Y. Slip Op 51693[U], *8; Board of Mgrs. of 14 Hope St. Condominium, 2013 N.Y. Slip Op 51201[U], *4). Here, however, such a fraud claim is barred by the express terms of the Offering Plan and the Purchase Agreements. The Offering Plan, at page 76, provided as follows:
“The foregoing sets forth the entire obligations of Sponsor hereunder and no others shall be implied, except that nothing contained herein shall be deemed to limit the rights of Unit Owners under their respective Purchase Agreements. Sponsor makes no representations or warranties other than as set forth in the [Offering] Plan ” (emphasis added).
Moreover, the Offering Plan included a form of the Purchase Agreement, which was also given to and executed by the unit owner. Section 20 of the Purchase Agreements, entitled “No Representations,” provides, in pertinent part, as follows:
“Purchaser acknowledges that Purchaser has not relied upon any architect's plans, sales plans, selling brochures, advertisements, representations, warranties, statements or estimates of any nature whatsoever, whether written or oral, made by Sponsor, Selling Agent or otherwise, including, but not limited to, any relating to the description or physical condition of the Property, the Building or the Unit, or the size or the dimensions of the Unit or the rooms therein contained or any other physical characteristics thereof ... except as herein or in the [Offering] Plan specifically represented. Purchaser has relied solely on Purchaser's own judgment and investigation in deciding to enter into this Agreement and purchase the Unit. No person has been authorized to make any representations on behalf of Sponsor except as herein or in the [Offering] Plan specifically set forth. No oral representations or statements shall be considered a part of this Agreement. Sponsor makes no representation or warranty as to the work, materials, appliances, equipment or fixtures in the Unit, the Common Elements or any other part of the Property other than as set forth herein or in the [Offering] Plan ... The provisions of this Article shall survive the Closing of Title” (emphasis added).
Thus, based upon the express terms of the Offering Plan and the Purchase Agreements, plaintiff cannot claim that it reasonably relied upon any purported misrepresentations contained in promotional materials or oral statements (see also Board of Mgrs. of 647 & 649 Place Condominium, 2015 N.Y. Slip Op 51693 [U], *9–10). Plaintiff, therefore, cannot establish the requisite elements to sustain a claim of fraud as against the Sponsor or the Non–Sponsor Defendants (see generally Oko v. Walsh, 28 AD3d 529, 529 [2d Dept 2006] ).
In addition, plaintiff's common-law fraud claim is duplicative of its breach of contract claim. “A fraud claim may not be maintained when the only fraud charged relates to the breach of contract” (34–35th Corp. v. 1–10 Indus. Assoc., 2 AD3d 711, 712 [2d Dept 2003] ; see also Alamo Contract Bldrs. v. CTF Hotel Co., 242 A.D.2d 643, 644 [2d Dept 1997] ). Here, both plaintiff's breach of contract claim and fraud claim merely allege, in essence, that the Sponsor promised to build a well constructed condominium with defect-free apartments and common areas. Plaintiff's common-law fraud allegations do not arise from any representations that are collateral or extraneous to the Offering Plan or the Purchase Agreements and are redundant of its breach of contract claim (see 34–35th Corp., 2 AD3d at 712 ; Alamo Contract Bldrs., 242 A.D.2d at 643–644 [2d Dept 1997] ). Furthermore, the alleged misrepresentations/omissions did not result in any loss independent of the damages allegedly incurred for breach of contract. Thus, plaintiff's attempt to circumvent the Martin Act's preemption of its fraud claim by relying upon alleged promotional materials or verbal assurances must be rejected. Consequently, summary judgment dismissing plaintiff's sixth cause of action for fraud as against the Sponsor and the Non–Sponsor Defendants must be granted (see CPLR 3212[b] ).
Plaintiff's Ninth Cause of Action For Deceptive Trade Practices
Plaintiff's ninth cause of action asserts a claim for deceptive trade practices under General Business Law § 349 as against the Sponsor and the Non–Sponsor Defendants. It alleges that the Sponsor and the Non–Sponsor Defendants disseminated the Offering Plan and marketing materials and/or caused them to be disseminated to prospective purchasers, many of whom purchased residential units. It further alleges that the representations in the Offering Plan were misleading in that, among other things, they contained demonstrable falsehoods and did not disclose numerous defects in the design and construction of the building. It also alleges that the Sponsor and the Non–Sponsor Defendants did not take any steps to correct the Offering Plan or marketing materials or take any action to accurately reflect the design and construction of the building and the defects and deficiencies therein, but, instead, verbally ratified the allegedly false and misleading representations in the Offering Plan and in the marketing materials in their communications with the prospective purchasers and also verbally promised that the building was constructed in a first class manner. It additionally alleges that the Sponsor and the Non–Sponsor Defendants ratified these false and misleading representations with the intention that the prospective purchasers would reasonably believe that the representations made were true, accurate, and complete. It asserts that these acts, omissions, and statements contained in the Offering Plan, the marketing materials, and the verbal promises made by the Sponsor and the Non–Sponsor Defendants that the building would be of a first class construction and design were willful and knowing and constituted deceptive acts within the meaning of General Business Law § 349. It further asserts that the residential unit owners, as consumers, reasonably relied on the Sponsor and the Non–Sponsor Defendants' false and misleading representations to their detriment, sustaining damages in the sum of $1,000 for each violation, and that it is also entitled to attorneys' fees and costs.
While plaintiff's ninth cause of action asserts claims for deceptive trade practices under General Business Law § 349 as against the Sponsor and the Non–Sponsor Defendants, the Sponsor does not seek dismissal of this claim as against it. With respect to the Non–Sponsor Defendants, it is noted that General Business Law § 349 “was intended [as] a consumer protection statute” (Teller v. Bill Hayes, Ltd., 213 A.D.2d 141, 145 [2d Dept 1995], lv dismissed in part, denied in part 87 N.Y.2d 937 [1996] ), so “[p]rivate transactions without ramifications for the public at large are not the proper subject of [such] a claim” (Canario v. Gunn, 300 A.D.2d 332, 333 [2d Dept 2002] ). There is, however, a split in authority as to whether a claim under General Business Law § 349 may be maintained with respect to the purchase of condominium units. While there is some authority in the Second Department holding that the sale of securities in a cooperative corporation to the residential shareholders is a consumer-oriented transaction and General Business Law § 349 permits a private right of action to be maintained (see B.S.L. One Owners Corp. v. Key Intl. Mfg., 225 A.D.2d 643, 643 [2d Dept 1996] ; Board of Mgrs. of Bayberry Greens Condominium v. Bayberry Greens Assoc., 174 A.D.2d 595, 596 [2d Dept 1991], cases which have more recently directly addressed this issue, both in the First Department and in the Supreme Court, Kings County, have found such contracts to be “unique to the parties” and that they “[do] not fall within the ambit of [General Business Law § 349 ]” since they involve a private dispute among parties, rather than affecting the public at large (Thompson v. Parkchester Apts. Co., 271 A.D.2d 311, 311–312 [1st Dept 2000] ; see also Sutton Apts. Corp., 107 AD3d at 648 ; Merin v. Precinct Devs. LLC, 74 AD3d 688, 689 [1st Dept 2010] ; Board of Mgrs. of the 125 N. 10th Condominium, 2014 N.Y. Slip Op 50035[U], *8; Board of Mgrs. of the 231 Norman Ave. Condominium v. 231 Norman Ave. Prop. Dev., 2012 N.Y. Slip Op 51573[U],*16; Board of Mgrs. of the Crest Condominium, 2012 N.Y. Slip Op 50826[U], *9).
In any event, while “[r]eliance is not an element of a claim under General Business Law § 349 ... the plaintiff [still] must show that the defendant's material deceptive act caused the injury” (Gale v. Intl. Bus. Machines Corp., 9 AD3d 446, 447 [2d Dept 2004] ). Here, plaintiff has failed to show any material deceptive act by the Non–Sponsor Defendants which caused its damages. Plaintiff merely alleges that the condominium was not constructed in accordance with the plans and specifications and the Offering Plan. Its allegation of a misleading practice in this cause of action is predicated upon plaintiff's general assertion that the Sponsor made misrepresentations and failed to disclose material facts in the Offering Plan (see Andre Strishak & Assoc. v. Hewlett Packard Co., 300 A.D.2d 608, 610 [2d Dept 2002] ; Board of Mgrs. of Woodpoint Plaza Condominium v. Woodpoint Plaza LLC, 24 Misc.3d 1233 [A], 2009 N.Y. Slip Op 51715[U], *10 [Sup Ct, Kings County 2009] ). Thus, the conduct of which plaintiff complains is essentially that the Sponsor failed to satisfy its contractual duties under the Offering Plan (see Lucker v. Bayside Cemetery, 114 AD3d 162, 175 [1st Dept 2013], lv denied 24 NY3d 901 [2014] ).
Plaintiff does not point to any specific act which was misleading in a material respect. Rather, plaintiff, in an affidavit by its president, Chad Gessin, simply asserts that the marketing for the building contained the information which was contained in the Offering Plan, which is regulated exclusively by the Attorney General under the Martin Act. Moreover, plaintiff has failed to show that the Non–Sponsor Defendants specifically engaged in any deceptive act which caused its damages. In view of the express language of the Offering Plan and the Purchase Agreements, acknowledging that the purchasers did not rely on any representations extraneous to those documents, plaintiff is precluded from relying on representations outside those documents in proving causation of damages. While Core was the selling agent for the Sponsor, as an agent for a disclosed principal, it would not be liable for the Sponsor's misrepresentations, and the complaint ascribes no specific conduct on the part of Core outside of its acting in this capacity pursuant to the Sponsor–Core Sales and Marketing Agreement with the Sponsor. Summary judgment dismissing plaintiff's ninth cause of action as against the Non–Sponsor Defendants must, therefore, be granted (see CPLR 3212[b] ).
Plaintiff's Tenth Cause of Action for Deceptive Advertising Practices
Plaintiff's tenth cause of action against the Sponsor and the Sponsor Defendants alleges that the Sponsor's acts, omissions, and statements contained in the marketing materials were willful and knowing and constitute false advertising pursuant to General Business Law § 350. It further alleges that the residential unit owners reasonably relied on the Sponsor and its selling agent's false and misleading advertisements to their detriment, causing them to sustain damages.
The Sponsor does not seek dismissal of this cause of action as against it. As to the Non–Sponsor Defendants, the court notes that “a cause of action for false advertising pursuant to General Business Law § 350 is stated so long as plaintiffs allege that the advertisement (1) had an impact on consumers at large, (2) was deceptive or misleading in a material way, and (3) resulted in injury” ‘ (DeAngelis v. Timberpeg E., Inc., 51 AD3d 1175, 1177 [3d Dept 2008], quoting Andre Strishak & Assoc., 300 A.D.2d at 609 ; see also DeSantis v. Sears, Roebuck & Co., 148 A.D.2d 36, 38 [3d Dept 1989] ). The test is “whether the representations or omissions are likely to mislead a reasonable consumer acting reasonably under the circumstances” ‘ (DeAngelis, 51 AD3d at 1177, quoting Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 26 [1995] ). Plaintiff's allegations, however, concern representations made through marketing by the Sponsor, rather than the Non–Sponsor Defendants, and, as previously discussed, Core was acting solely as an agent for a disclosed principal. Therefore, dismissal of plaintiff's tenth cause of action as against the Non–Sponsor Defendants must be granted (see CPLR 3212[b] ).
As previously discussed in connection with plaintiff's ninth cause of action, it is also questionable whether this claim involves a private dispute, as opposed to a matter affecting the public at large, and, thus, whether it falls within the scope of General Business Law § 350 (cf. Scott v. Bell Atlantic Corp., 282 A.D.2d 180, 183–184 [1st Dept 2011] ).
CONCLUSION
Accordingly, the Sponsor and the Non–Sponsor Defendants' motion is granted insofar as it seeks: (1) partial summary judgment dismissing plaintiff's second, third, fourth, fifth, and sixth causes of action as against the Sponsor, (2) summary judgment dismissing plaintiff's second, third, fourth, fifth, sixth, ninth, and tenth causes of action as against the Non–Sponsor Principals, (3) summary judgment dismissing plaintiff's complaint in its entirety as against Core and the Sponsor Affiliates other than North10 MM. The Sponsor and Non–Sponsor Defendants' motion is denied insofar as it seeks summary judgment dismissing plaintiff's first cause of action as against the Sponsor Principals and North10 MM. Since there is no showing that the Fictitious Entities have any connection to the claims in this action, plaintiff's complaint is dismissed as against them. In view of the granting of the motion with respect to the Sponsor, the motion, insofar as the Sponsor moves, in the alternative, for a more definite statement pursuant to CPLR 3024(a), is rendered moot.
This constitutes the decision and order of the court.