Summary
concluding that a condominium board is a citizen of the states of citizenship of all unit owners unless the board has incorporated
Summary of this case from RL 900 Park, LLC v. EnderOpinion
02 CIV. 5345 (DLC)
January 28, 2003
William A. Ruskin, Andrew M. Zeitlin, Shipman Goodwin LLP, Stamford, CT, for Plaintiffs.
John V. Fabiani, Jr., Brody Fabiani Cohen, New York, NY, for Defendants.
OPINION AND ORDER
Defendants move to dismiss plaintiffs' amended complaint for lack of subject matter jurisdiction. For the reasons described below, this motion is granted. This action arises out of allegations of water infiltration in a residential apartment, that plaintiffs claim have damaged their property, lowered its market value and caused health problems. Plaintiffs John and Clara Caldwell ("Caldwells"), owners of a penthouse apartment at Two Columbus Avenue, New York City ("Building"), bring this action against the seven individual members of the Condominium Board ("Board Members"), the Sponsor of the offering plan, the Managing Agent for the Building, and the property manager for the Building. The Caldwells assert eight causes of action against various combinations of the defendant parties: breach of contract, breach of fiduciary duty, private nuisance, negligence, res ipsa loquitur, negligent misrepresentation, breach of implied warranty and loss of consortium.
Defendants seek to dismiss the complaint on the ground that this Court lacks subject matter jurisdiction. Plaintiffs rely on diversity jurisdiction. It is undisputed that plaintiffs are domiciliaries of Florida, and the three incorporated defendants, Two Columbus Associates, New York Urban Property Management Corp. and Urban Associates, LLC, are New York corporations with their principal place of business in New York. The dispute concerns the seven named Board Members, who are sued in their representative capacity as members of the Residential Board of Managers of Two Columbus Avenue and The Condominium Board of Managers of Two Columbus Avenue.
The Original Complaint named the Board itself as a defendant; the Amended Complaint substituted the individual members of the Board, sued in their representative capacity.
"Diversity jurisdiction requires that all of the adverse parties in a suit be completely diverse with regard to citizenship." Handelsman et. al. v. Bedford Village Assoc. Ltd. Partnership, et. al., 213 F.3d 48, 51 (2d Cir. 2000) (citation omitted). Identity of citizenship between any of the plaintiffs and any of the defendants destroys diversity and divests the federal court of subject matter jurisdiction. For an unincorporated association, citizenship "is determined by the citizenship of each of its members." United Food Commercial Workers Union v. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 302 (2d Cir. 1994) (emphasis in original).
Defendants argue that as the individual members of the Board are being sued as representatives of the entire condominium association, it is necessary to look at the citizenship of all of the unit owners to determine jurisdiction. They further contend, in their Memorandum of Law, that naming the Board members as individuals is an inappropriate means of securing jurisdiction. They point out that the original Complaint was brought against the Board of Managers, as a representative body, and not against the individual Board members. Because plaintiffs have not alleged that they are diverse with every member of the condominium association — nor could they, as they would have to show they have diverse citizenship from themselves — defendants argue the complaint must be dismissed.
Plaintiffs claim that they have named the individual members of the Board not as a means of securing jurisdiction, but because of the torts committed by these individuals. They cite the condominium Offering Plan as stating that a "Board member shall be liable for his own bad faith or willful misconduct." But the causes of action asserted in this case are not for individual harms done by the Board Members against the plaintiffs, but rather for failure to live up to responsibilities as Board Members. Plaintiffs' own filings demonstrate that any basis for the Board Members' liability must come from their status as representatives of the condominium association as a whole. For example, the Amended Complaint, in pleading the breach of fiduciary duty claim against the sponsor and two of the Board Members, states, ". . . Sara and Squires, by virtue of their participation on the sponsor-appointed Condominium Board and Residential Board, are each in a fiduciary relationship with the Caldwells . . .". The Caldwells' breach of contract claim arises out of responsibilities outlined for the Board Members in the offering plan, not a contract signed by any of the individual defendants. The control, care and direction required for the private nuisance, negligence and res ipsa loquitur claims can only be ascribed to the individual defendants in their capacity as Board Members, or to the condominium as a whole.
In sum, any duties owed by the individually named defendants to the plaintiffs are owed by the individual defendants as the Board representing the condominium association as a whole. The entire condominium association — all of the unit owners — is the real and substantial party to this dispute, and therefore its citizenship must control. Airlines Reporting Corp. v. S and N Travel, Inc., 58 F.3d 857, 862 (2d Cir. 1995). Plaintiffs cannot assert claims for which the whole condominium association is answerable, and then attempt to manufacture jurisdiction by only naming those unit owners, albeit Board members, who are diverse in citizenship with plaintiffs. As stated by the Hon. Shira A. Scheindlin in discussing the citizenship of partnerships, another unincorporated association, "[t]he plaintiff cannot invoke the diversity jurisdiction of the federal courts based on the citizenship of some but not all partners. . . . `[W]e reject the contention that to determine, for diversity purposes, the citizenship of an artificial entity, the court may consult the citizenship of less than all of the entity's members.'" United National Insurance Co. v. Waterfront N.Y. Realty Corp., 907 F. Supp. 663, 668 (S.D.N.Y. 1995) (quoting Carden v. Arkoma Assocs., 494 U.S. 185, 195 (1990)).
CONCLUSION
For the foregoing reasons, the defendants' motion to dismiss the complaint for lack of subject matter jurisdiction is granted. The Clerk of Court shall close the case.
SO ORDERED: