Opinion
18099/08
8-7-2009
IN THE MATTER OF THE ARBITRATION OF CERTAIN CONTROVERSIES BETWEEN ABRAHAM EIMER AND HINDY EIMER,, Petitioner, v. THE BOARD OF MANAGERS OF 5316 14th AVENUE CONDOMINIUM, D & D MANAGEMENT SERVICES CORP., BROWNSTONE MANAGEMENT, LLC, Respondent.
Israel Vider, Esq., Bklyn NY, Petitioner. Respondent Won J. Choi, Esq., NY NY.
Petitioners ABRAHAM EIMER (ABRAHAM) and his wife, HINDY EIMER (HINDY), seek to: compel respondent THE BOARD OF MANAGERS OF 5316 14th AVENUE CONDOMINIUM (BOARD), and other respondents, pursuant to CPLR § 7503(a), to arbitrate four notices of liens it filed with the Office of the Register of the City Register of New York with respect to four liens for unpaid common charges, as required by Article 10 of the By-Laws of THE 5316 14th AVENUE CONDOMINIUM (CONDO); stay and enjoin respondents, pursuant to CPLR § 7503 (a), from taking any actions against petitioners in any other forum pending the conclusion of the arbitration; and, vacate and cancel the aforementioned four notices of liens for unpaid common charges filed by the BOARD with the Office of the City Register of the City of New York, because they are unlawful. The BOARD cross-moves, pursuant to CPLR Rule 3211 (a) (1) and (7), for dismissal of the instant petition because there is a defense founded upon documentary evidence and the petition fails to state a cause of action. The BOARD's cross-motion is granted in its entirety. The instant petition is dismissed.
Three of the four notices of liens were cancelled by the BOARD prior to the commencement of this special proceeding and are now moot. The fourth notice of lien is against HINDY, who is not a party to an arbitration agreement with the BOARD. Therefore, the Court cannot compel HINDY to proceed to arbitration. Further, the BOARD lawfully complied with its By-Laws, the Condominium Act [Article 9-B of the Real Property Law (RPL) § 339-d, et seq.], did not violate Lien Law § § 9 and 35, which are inapplicable to liens for unpaid condominium common charges, and did not commit fraudulent acts upon ABRAHAM's mortgagors. The action was discontinued without prejudice against BROWNSTONE MANAGEMENT, LLC, on November 12, 2008.
Background
The apartment building at 5316 14th Avenue, Brooklyn, New York, in Borough Park, became a condominium in 2001. Two of the apartments, Units 1B and 1C, were purchased by petitioners, each in their own name. Unit 1C was deeded to ABRAHAM on March 14, 2002 and Unit 1B was deeded to HINDY on May 9, 2002.
ABRAHAM had disputes with the BOARD involving ABRAHAM'S use of a basement office to sell Judaica articles and providing a babysitting service for his customers. The BOARD, by its then President, and ABRAHAM, who signed for himself "and on behalf of my spouse," executed on January 14, 2004 an arbitration agreement [exhibit A of petition] to resolve their disputes in the Rabbinical Court of Kolel Tartikov. HINDY never signed the January 14, 2004 arbitration agreement. The arbitration agreement does not specify the parties' disputes. The BOARD and ABRAHAM, agreed "to present our arguments with respect to the matters in dispute between us," and the three rabbi court "shall render a ruling concerning the matters of dispute between us."
The Rabbinical Court of Kolel Tartikov issued a ruling on June 1, 2004 [exhibit G of petitioners' supplemental affirmation in further support of petition and in opposition to cross-motion], in which ABRAHAM was ordered, inter alia: to obtain work permits for work he performed on the interior and exterior of the building; forbidden to store his belongings in the common area of the basement hallway; to limit his use "of his basement office . . . to inspecting only, but not to sell . . . judaica articles, and the likes [sic]"; and, his "babysitting service is limited to four babies at a time," for which he had to obtain insurance.
In a subsequent ruling, on December 22, 2005 [exhibit H of petitioners' supplemental affirmation in further support of petition and in opposition to cross-motion], the rabbinical court noted that "the two parties separately appeared before us to complain that the other side was not complying with the Rabbinical Court Ruling. Furthermore, Party B [ABRAHAM] withheld maintenance payments, claiming that the residents did not comply with the ruling, and because damages and informing and acts of violence were done against him . . . he also challenged the amount of maintenance that management said he owed." The rabbinical court ordered the BOARD to make various repairs to ABRAHAM's basement entrance and ordered ABRAHAM to pay "the maintenance in full and on time." The rabbinical court ordered, in ¶ F:
If, Heaven forbid, there will arise any claims and arguments against each other for non-compliance with the Rabbinical Court Ruling, they are to turn to the Rabbinical Court signed below, but not to the secular courts and certainly not to the authorities. The parties must conduct themselves respectfully and peacefully, in accordance with the law of the Torah, and not — G-d forbid — with violence, and certainly not with informing and libels.
On December 26, 2006, the BOARD recorded its November 13, 2006 Notice of Lien, in the Office of the City Register of the City of New York, at CRFN [City Register File Number] 2006000701747, for unpaid common charges against ABRAHAM's Unit 1C, for $7,119.58 in maintenance arrears, but incorrectly named the unit owner as HINDY. Then, on February 16, 2007, the BOARD recorded its January 19, 2007 Notice of Lien, in the Office of the City Register of the City of New York, at CRFN 2007000093784, for unpaid common charges against Unit 1C, for $7,792.52 in accumulated maintenance arrears, and amended and modified the November 13, 2006 notice of lien to correctly name ABRAHAM as owner of Unit 1C.
On March 22, 2007, the BOARD vacated and cancelled the November 13, 2006 notice of lien recorded on December 26, 2006, because it incorrectly named HINDY as the unit owner, and recorded this lien cancellation on April 23, 2007, in the Office of the City Register of the City of New York, at CRFN 2007000208243. Finally, on September 6, 2007, the BOARD vacated and cancelled the January 19, 2007 notice of lien recorded on February 16, 2007, because it was satisfied on June 20, 2007. This cancellation was recorded on October 9, 2007, in the Office of the City Register of the City of New York, at CRFN 2007000509713. The Court, after reviewing the Automated City Register Information System [ACRIS] takes judicial notice that there are no outstanding notice of liens recorded against ABRAHAM's Unit 1C.
With respect to HINDY's Unit 1B, the BOARD prepared on November 13, 2006 a notice of lien for $2,169.07, for unpaid common charges, and recorded it on December 26, 2006, in the Office of the City Register of the City of New York, at CRFN 2006000701746. This lien was satisfied on May 30, 2007, and the BOARD recorded its September 6, 2007 cancellation of the lien on October 9, 2007, in the Office of the City Register of the City of New York, at CRFN 2007000509714.
On September 9, 2007, the BOARD prepared a new notice of lien against HINDY's Unit 1B for $3,123.43, for late fees, maintenance, elevator assessment and additional maintenance in the form of expenses and legal fees. This notice of lien was recorded on October 15, 2007, in the Office of the City Register of the City of New York, at CRFN 2007000519404. The Court's review of ACRIS confirms that this is the only outstanding lien against HINDY's Unit 1B.
Despite the September 9, 2007 notice of lien recorded on October 15, 2007 against HINDY's Unit 1B being the only outstanding lien against either of the EIMERS, and HINDY not being a signatory to the January 14, 2004 arbitration agreement between ABRAHAM and the BOARD, petitioners commenced the instant action on June 24, 2008, to compel arbitration of the outstanding common lien charges and to vacate the four notices of lien filed by the BOARD against petitioners.
The instant petition asserts that the BOARD violated § 10.1 of the CONDO's By-Laws by filing four different liens against petitioners. Section 10.1 states that "[a]ny matter that may be resolved by arbitration pursuant to New York State law . . . must be submitted to arbitration. No party may commence a proceeding in any other forum other than to enforce these arbitration provision [sic]." Petitioners argue that because the arbitration, pursuant to the January 14, 2004 arbitration agreement, has not concluded the BOARD must continue to arbitrate all disputes, including petitioners' unpaid common charges, pursuant to CPLR § 7503, and the BOARD should be enjoined from foreclosing on petitioners' units. Petitioners claim that a foreclosure against their units in the CONDO would violate § 10.1 of the CONDO's By-Laws, because the BOARD would be commencing a proceeding in a forum other than the rabbinical court.
The instant petition has nine causes of action. The first two specifically seek to compel respondents into arbitration before the Rabbinical Court of Kolel Tartikov and to enjoin foreclosure against petitioners' units.
The third, fourth and fifth causes of action seek to dismiss the outstanding $3,123.14 notice of lien recorded on October 15, 2007 against HINDY's Unit 1B. The third cause of action claims that RPL § 339-aa provides that a lien for unpaid common charges may not be filed until 60 days after the unpaid charges are due and that respondents never requested the payment of the unpaid common charges until after the recording of the lien. In their fourth cause of action, petitioners allege that respondents violated § 6.4 of the CONDO's By-Laws by failing to give petitioners a written notice of default of the amount owed to the CONDO, the benefit of a 15-day grace period to cure any purported default, and placing a lien on amounts that have not remained unpaid for more than 30 days. The fifth cause of action alleges that the notice of lien, recorded on October 15, 2007, seeking legal fees and expenses is invalid as a matter of law.
The sixth and seventh causes of action seek to cancel all four liens, asserting that the liens violate specific sections of the Lien Law. The sixth cause of action asserts that notices of liens violate the notice requirements of RPL § 339-aa and Lien Law § 9. The seventh cause of action claims that respondents could not file liens, pursuant to Lien Law § 35 and the existence of a valid agreement to arbitrate.
The eighth cause of action seeks dismissal of all the liens because the BOARD never properly adopted a budget, upon which the common charges are based.
The ninth cause of action seeks reimbursement of monies paid by petitioners' mortgagors to satisfy the liens filed on December 26, 2006 and February 16, 2007 against ABRAHAM's Unit 1C, alleging that respondents made fraudulent misrepresentations to coerce ABRAHAM's lenders to protect their collateral.
The CONDO is governed by its By-Laws [exhibit D of cross-motion to dismiss], setting forth the CONDO's rules and procedures. Pursuant to their deeds [exhibit E of cross-motion], both petitioners accepted the provisions of the Declaration and the By-Laws and agreed "to comply with all the terms and provisions thereof." Further, § 1.4 of the By-Laws states that all unit owners are subject to the Declaration and the By-Laws.According to § 6.1 (A) of the CONDO By-Laws, the BOARD must prepare and adopt a budget each year, or if it fails to do so, pursuant to § 6.1 (B), the previous year's budget will be used to fix the CONDO's common charges. Also, § 6.1 (B) states that failure or delay of the BOARD to adopt a budget shall be not be deemed by a unit owner as a waiver or a release from the unit owner's obligation to pay common charges. Section 6.2 (A) of the By-Laws states that all unit owners must pay common charges and the BOARD will have a lien on any unpaid common charges "[t]o the extent permitted by law."
Section 6.4 (A) of the By-Laws states that if a default in the payment of common charges is not cured within 15 days of written notice of the default, the BOARD shall take prompt action within 30 days after the due date of the payment. Further, the BOARD has the statutory right to file liens, pursuant to RPL § 399-z, and to foreclose on liens, as provided for in RPL § 399-aa. Also, if a unit owner fails to make prompt payment of common charges, § 6.4 (B) of the By-Laws obligates the unit owner to pay a penalty charge equal to 10% of the outstanding charges, together with all costs and expenses paid or incurred by the Board, managing agent or manager in collecting the lien, including reasonable attorneys' fees, disbursements and court costs.
As will be discussed below, the instant petition must be dismissed in its entirety as a matter of law.
Motion to dismiss standards
"When determining a motion to dismiss, the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory' (see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Milstein, Felder & Steiner, 96 NY2d 300, 303 [2001]; Leon v Martinez, 84 NY2d 83, 87-88 [1994])." (Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 570-571 [2005]). Further, the Court, in Morris v Morris (306 AD2d 449, 451 [2d Dept 2003]), instructed that:In determining whether a complaint is sufficient to withstand a motion pursuant to CPLR 3211 (a) (7), "the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail" (Guggenheimer v Ginsburg, 43 NY2d 268, 275 [1977]. The court must accept the facts alleged in the complaint to be true and determine only whether the facts alleged fit within any cognizable legal theory [see Dye v Catholic Med. Ctr. of Brooklyn & Queens, 273 AD2d 193 [2000]. However, bare legal conclusions are not entitled to the benefit of the presumption of truth and are not accorded every favorable inference [see Doria v Masucci, 230 AD2d 764 [2000]. When the moving party offers evidentiary material, the court is required to determine whether the proponent of the pleading has a cause of action, not whether [he or] she has stated one [see Meyer v Guinta, 262 AD2d 463, 464 [1999]. Likewise, to succeed on a motion to dismiss pursuant to CPLR 3211 (a) (1), the documentary evidence which forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim (see Trade Source v Westchester Wood Works, 290 AD2d 437 [2002]. (See Euell v Incorporated Village of Hempstead, 57 AD3d 837 [2d Dept 2008]; GuideOne Speciality Ins. Co. v Admiral Ins. Co., 57 AD3d 611 [2d Dept 2008]; Ruffino v New York City Transit Authority, 55 AD3d 817 [2d Dept 2008]; Katz v Katz, 55 AD3d 680 [2d Dept 2008]; Breytman v Olinville Realty, LLC, 54 AD3d 703 [2d Dept 2008]; NCJ Cleaners, LLC v ALM Media, Inc., 48 AD3d 766 [2d Dept 2008])
In the instant action, petitioners' causes of action fail to allege any material facts giving rise to any cognizable claim against respondents and are contradicted by the documentary evidence, which conclusively disposes of petitioners' claims. "Bare legal conclusions and factual claims which are flatly contradicted by the record are not presumed to be true (see Morone v Morone, 50 NY2d 481 [1980]; Kupersmith v Winged Foot Golf Club, Inc. 38 AD3d 847 [2d Dept 2007]; Meyer v Guinta, 262 AD2d 463 [2d Dept 1999])." (Parola, Gross & Marino, P.C. v Susskind, 43 AD3d 1020 [2d Dept 2007]). (See Maas v Cornell University, 94 NY2d 87, 91 [1999]; Dinerman v Jewish Board of Family & Children's Service, Inc., 55 AD3d 530, 531 [2d Dept 2008]).
Dismissal of Petitioners' first and second causes of action
Petitioners' first two causes of action seek to compel the parties to proceed to arbitrate disputes about repairs to common area and liens, and pending arbitration enjoining the BOARD from taking any actions against petitioners, including foreclosure on the liens filed against petitioners' units. These two causes of action are dismissed for violation of the Condominium Act and the CONDO's By-Laws. The By-Laws specificallyprovide that all unit owners are responsible for common charges and the BOARD can file liens against unit owners for unpaid common charge regardless of any underlying disputes concerning repairs to common areas. The paying of common charges and the filing of liens for nonpayment of common charges is not subject to arbitration.
"The condominium form of ownership is manifested as a division of a single parcel of real property into individual units and common elements in which an owner holds title in fee to his individual unit as well as an undivided interest in the common elements of the parcel." (Murphy v State, 14 AD3d 127, 133 [2d Dept 2004]). A condominium is created by the filing of a Declaration (RPL § 339-n) and becomes subject to the jurisdiction of the Condominium Act (RPL § 339-f). "Once created, however, the administration of the condominium's affairs is governed principally by its by-laws, which are, in essence, an agreement among all of the individual unit owners as to the manner in which the condominium will operate, and which set forth the respective rights and obligations of unit owners, both with respect to their own units and the condominium's common elements." (Schoninger v Yardarm Beach Homeowners Ass'n, Inc. 134 AD2d 1, 6 [2d Dept 1987]). Further, as noted earlier, petitioners agreed in their Deeds to comply with the By-Laws of the CONDO and RPL § 339-j requires that "[e]ach unit owner shall comply strictly with the by-laws and with rules, regulations, resolutions and decisions adopted pursuant thereto." Also, pursuant to § 6.2 (A) of the CONDO's By-Laws, "all unit owners shall be obligated to pay Common Charges and Special Assessments assessed by the Condominium Board pursuant to section 6.1 . . . To the extent permitted by Law, the Condominium Board shall have a lien on each Unit, on behalf of all Unit Owners, for unpaid Common Charges and Special Assessments assessed against such Unit."
Regardless of a dispute concerning repairs to common areas, both RPL § 339-x and § 6.2 (D) of the CONDO's By-Laws do not exempt a unit owner from liability for payment of common charge or special assessments by waiving the use and enjoyment of any or all of the common elements, which includes the basement, hall and stairways of the building (RPL § 339-e [3]). It is not disputed by any party that petitioners failed to pay common charges for periods of time. The BOARD, pursuant to § 6.4 (A) of the By-Laws has the right to file liens against petitioners for unpaid common charges, and RPL § 339-z states the BOARD, "on behalf of all unit owners, shall have a lien on each unit for unpaid common charges." "An individual unit owner . . . cannot withhold payment of common charges and assessments in derogation of the by-laws of the condominium based on defective conditions in his unit or in the common areas (see, Board of Mgrs. of First Ave. Condominium v Shandel, 142 Misc 2d 188 [Civ Ct, New York County 1989]; Real Property Law §§ 339-j, 339-x), or based on his disagreement with actions lawfully taken by the Board of Managers." (Frisch v Bellmarc Management, Inc. 190 AD2d 383, 389 [1d Dept 1993]).
Both the By-Laws and the Condominium Act make clear that unit owners must pay common charges and the BOARD has the right to file notices of liens for nonpayment of common charges. This is not subject to dispute. Therefore, it cannot be submitted to arbitration.
Even if the outstanding lien issue and other disputes between the parties were arbitrable, the Court, as a threshold matter, in a CPLR Article 75 proceeding to compel arbitration must "in the first instance . . . determine whether parties have agreed to submit their disputes to arbitration and, if so, whether the disputes generally come within the scope of their arbitration agreement." (Sisters of St. John the Baptist, Providence Rest Convent v Phillips R. Geraghty Constructor, Inc., 67 NY2d 997, 999 [1986]). (See Primex Intern. Corp. v Wal-Mart Stores, Inc., 89 NY2d 594, 598 [1997]; State v Phillip Morris, Inc., 30 AD2d 26, 31 [1d Dept 2006]; Eric Riebling, Co., Inc. v Martin Woodworking Machines Corp., 294 AD2d 465 [2d Dept 2002]). ABRAHAM and the BOARD agreed, in their January 14, 2004 agreement "to present our arguments with respect to the matters in dispute between us." This opaque language prevents the Court from determining what was in dispute. Their January 14, 2004 arbitration agreement is as clear as mud in stating the matters in dispute. For this Court to compel arbitration "[t]he agreement must be clear, explicit and unequivocal." (Waldron v Godess, 61 NY2d 181, 183 [1984]). (See Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. [United Liverpool Faculty Assn.], 42 NY2d 509, 512 [1977]; Matter of Mendel Zilberberg and Associates, P.C. v Rosner, 292 AD2d 533, 534 [2d Dept 2002]; In re Ohr Torah Institute, 276 AD2d 634 [2d Dept 2000]). The Court cannot compel respondents to continue the arbitration in the rabbinical court, pursuant to the January 14, 2004 agreement.
Further, neither petitioner HINDY nor the other remaining respondent, D & D MANAGEMENT SERVICES CORP., are signatories to the January 14, 2004 arbitration agreement. ABRAHAM signed the arbitration agreement for himself "and on behalf of my spouse." The Waldron Court instructed, at 183, that "[i]t is well settled a party will not be compelled to arbitrate . . . absent evidence which affirmatively establishes that the parties expressly agreed to arbitrate their disputes.' (Schubtex, Inc. v Allen Snyder, Inc., 49 NY 1, 6 [1979]; see also, Matter of Marlene Inds, Corp. [Carnac Textiles], 45 NY2d 327, 333-334 [1978]]." Therefore, HINDY, against whom the only remaining notice of lien is filed, and D & D MANAGEMENT SERVICES CORP. cannot be compelled to arbitrate any alleged disputes in the Rabbinical Court of Kolel Tartikov. (See Fiveco, Inc. v Haber, 11 NY3d 140, 144 [2008]; God's Battalion of Prayer Pentecostal Church, Inc. v Miele Associates, LLP, 6 NY3d 371, 374 [2006]; Varsames v DiMauro, 56 AD3d 681 [2d Dept 2008]; State Farm Mut. Auto Ins. Co. v Juma, 44 AD3d 963 [2d Dept 2007]; Matter of Miller, 40 AD3d 861, 862 [2d Dept 2007]; Howell v Corastor Holding Company, 16 AD2d 585, 586 [2d Dept 2005]). "No party is bound to arbitrate unless by clear language he has so agreed' (Matter of Lehman v Ostrovsky, 264 NY 130, 132 [1934]), nor should parties be inveighled' into arbitration (Matter of Riverdale Fabrics Corp. [Tillinghast-Stiles Co.], 306 NY 288 [1954])." (Kahn v Biernbaum, 55 AD2d 589 [1d Dept 1976]. (See Rosenbluth v Ornstein, 21 Misc 3d 1117 [A] [Sup Ct, Nassau County 2008]).
ABRAHAM, in signing the arbitration agreement on behalf of his wife, HINDY, failed to submit any authorization for him to act as her agent, including a power of attorney. The arbitration agreement, even if enforceable between ABRAHAM and the BOARD with respect to liens and other disputes, clearly is not enforceable against HINDY. While a husband might be able to bind a wife in a rabbinical court, New York State has not allowed a husband to sign a contract for his wife for the past 161 years. At common law, a wife's separate legal interests merged into those of her husband when she married. (Stelz v Shreck, 128 NY 263 [1891]). Further, at common law a wife was under a complete disability to act as a legal person. (Bennett v Bennett, 116 NY 584 [1889]). Commencing with the "Married Women's Act," in 1848, and subsequent statutes, New York State abolished common law restrictions placed upon married women. Domestic Relations Law (DRL) § 50, "Property of Married Women," derived in part from the Married Women's Act, states that "[p]roperty, real or personal, now owned by a married woman or hereafter owned by a woman . . . shall continue to be her sole and separate property as if she were unmarried, and shall not be subject to her husband's control or disposal not liable for his debts [emphasis added]." Similar statutory emancipation of married women from their husbands' control is found in General Obligations Law (GOL) § 3-301,et seq. Thus, it is clear that HINDY's husband, ABRAHAM, is prohibited from unilaterally binding his wife, HINDY, to an arbitration agreement, which was not separately signed by her.
Dismissal of Petitioners' third, fourth and fifth causes of action
These causes of action seek dismissal of the outstanding $3,123.43 lien against HINDY's Unit 1B. The third cause of action is based upon petitioners' misreading of RPL § 339-aa. Petitioners allege, in ¶ 41 of the petition, that RPL § 339-aa "provides that a lien for unpaid common charges may not be filed until 60 days after the unpaid charges are due" and respondents [¶ 42 of the petition] never requested the amount demanded in the lien until four months after the lien was recorded. Contrary to petitioners' assertion, RPL § 339-aa provides that "[i]n the event unpaid common charges are due, any member of the board of managers may file a notice of lien . . . if no notice of lien has been filed within sixty days after the unpaid charges are due." This does not require a 60 day waiting period to file a notice lien. It merely states that if a notice of lien is not already filed within 60 days of the unpaid charge, "any member of the board of managers" may file a notice of lien. Further, before the lien was filed, the CONDO management sent invoices to petitioners regarding their outstanding common charges [exhibits G and H of petition]. There, petitioners' third cause of action is dismissed.
The fourth case of action deals with § 6.4 of the Condo's By-Laws. The BOARD complied with § 6.4 and provided notices of default to petitioners [exhibit F of cross-motion; exhibits G and H of petition]. When petitioners failed to cure their default in paying their common charges within 15 days, the BOARD complied with § 6.4 of the By-Laws and filed the outstanding lien against HINDY's Unit 1B on October 15, 2007, within 30 days after the due date of the payment. Therefore, petitioner's fourth cause of action is dismissed.
Petitioners' fifth cause of actions claims that the portion of the outstanding lien for legal fees and expenses of the BOARD is illegal under New York Law. Petitioners fail to cite even one case to support this false argument. However, respondents are "entitled to the reasonable attorney's fees it incurred to recover . . . unpaid common charges." (Granada Condominium I v Morris, 225 AD2d 520, 521 [2d Dept 1996]). Section 6.4 (B) of the CONDO's By-Laws provides that in the event a unit owner fails to make prompt payment of common charges, the unit owner is obligated to pay a penalty charge of 10% of the outstanding charge, together with all costs and expenses paid or incurred by the BOARD, managing agent or manager in connection with collection of the lien, including reasonable attorneys' fees, disbursements and court costs. Further, § 9.4 of the CONDO's By-Laws states that, "all costs and expenses incurred, by the Condominium Board in connection with . . . cure of any violation, or breach, or default committed by Unit Owner . . . shall be immediately payable by such Unit Owner to the Condominium Board." HINDY agreed in her Deed to Unit 1B to abide by all of the terms of the CONDO's By-Laws. Therefore, she is bound to abide with §§ 6.4 (B) and 9.4, and pay additional maintenance for legal fees and costs. (See Matter of A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 5 [1986]; Granada Condominium I, supra at 521; Frisch v Bellmarc Management, Inc., supra at 390). Petitioner's fifth cause of action is dismissed.
Dismissal of Petitioners' sixth and seventh causes of action
These two causes of action seek to vacate all four notices of lien, claiming violations of specific sections of the Lien Law. Since three of the four liens are moot, the Court will only deal with the outstanding notice of lien filed on October 15, 2007 against HINDY's Unit 1B.
Petitioners claim that the notice of lien filed on October 15, 2007 violates RPL §339-aa and, in ¶ 59 of the petition, "do not provide the required information mandated by statute. RPL § 339-aa requires that a verified notice of lien state "the name (if any) and address of the property, the liber and page of record of the declaration, the name of the record owner of the unit, the unit designation, the amount and purpose for which due, and the date when due." The outstanding September 9, 2009 notice of lien filed with the City Register on October 15, 2007 clearly complies with RPL § 339-aa. The notice of lien states "[t]he name and address of the property is . . . 5316 14th Avenue, Brooklyn, New York 11219." Then, "[t]he Condominium Declaration is dated June 20, 2001 and was recorded . . . in Liber 5293, page 1745 . . . The record owner of the Condominium Unit is HINDY EIMER. The Unit No. is 1B and is designated by tax block 5670, lot no.102." With respect to "the amount and purpose for which due, and te date when due," the notice of lien states that: for April 2007 — September 2007 there are two amounts due: $987.43 for "late fees, maintenance and elevator assessment"; and, $2,136.00 for "[a]dditional maintenance in the form of expenses and legal fees." This is a total amount of $3,123.43.
Further, petitioners claim in their sixth cause of action that respondents violated Lien Law § 9, and in their seventh cause of action that respondents violated Lien Law § 35. Both Lien Law §§ 9 and 35 are inapplicable to the instant matter because they both pertain only to mechanics' liens.
The outstanding notice of lien is for unpaid common charges. It is not for a contractor's or laborers' or materialman's payment for labor and/or materials. Lien Law § 9 only deals with the contents of a mechanic's lien, which much include items such as "labor performed or materials furnished" and the "amount unpaid to the lienor for such labor or materials."
Petitioners claim, in ¶ 64 the petition, that "[u]nder New York State law, where there is a valid agreement to arbitrate, none of the parties to said agreement may file a lien except a mechanic's lien which is expressly permitted by Lien Law § 35." This is a misreading of the law. Lien Law § 35 states that the filing of a notice of mechanics' lien "shall not be a waiver of any right of arbitration of a contractor, subcontractor, material man or laborer secured to by his contract to furnish labors of materials." First, it only pertains to mechanics' liens. The BOARD did not file a mechanic's lien. Second, Lien Law § 35 does not prohibit the filing of liens where there is an agreement to arbitrate. Instead, it provides that the filing of a notice of lien is not a waiver of arbitration. Third, HINDY never signed the January 14, 2004 arbitration agreement. HINDY is not bound by an agreement to arbitrate. Therefore, petitioner's sixth and seventh cause of action are dismissed.
Dismissal of Petitioners' eighth cause of action
This cause of action asserts that the liens are invalid because the BOARD never properly adopted a budget and thus, the liens should be cancelled and discharged. Again, three of the four liens are moot. With respect to the outstanding lien, whether or not a budget is adopted by the BOARD is irrelevant to the obligation of a unit owner to pay his or her common charges. While § 6.1 (A) of the By-Laws states that the BOARD must prepare and adopt a budget annually, § 6.1 (B) of the By-Laws states that the failure of the Board to adopt a budget shall not be deemed a waiver of a unit owner's obligation to pay common charges, and if the BOARD fails to adopt an annual budget, the previous year's common charges shall be continued. Therefore, petitioners' eighth cause of action is dismissed.
Dismissal of Petitioners' ninth cause of action
This cause of action, sounding in fraud, is dismissed. Petitioners baldly assert, in ¶ 72 of the petition, that "the Respondent fraudulently represented to the banks, which hold mortgages on the condominium units of Petitioner, that the [two of the three moot] liens were validly filed," and in ¶ 73 of the petition, that "[t]his representation was made in order to unlawfully coerce the bank to pay the amounts of the liens to Respondent." Petitioners then seek the return of these funds which "shall be adjudicated in arbitration as demanded in this petition."
The two liens, which became moot when satisfied, were validly filed by the BOARD. Further, petitioners inadequately pled fraud, by failing to offer any evidence of what respondents "fraudulently represented to the banks." The elements of fraud are narrowly defined, requiring proof by clear and convincing evidence (cf., Vermeer Owners v Guterman, 78 NY2d 1114, 1116 [1991])." (Gaidon v Guardian Life Ins. Co. of America, 94 NY2d 330, 349-350 [1999]). Bare allegations of fraud, without details, such as in the instant petition, are insufficient to sustain an action for fraud. (Kline v Taukpoint Realty Corp., 302 AD2d 433 [2d Dept 2003]). The Appellate Division, Second Department, in Giurdanella v Giurdanella (226 AD2d 342, 343 [1996], held:
to establish a prima facie case of fraud, the plaintiff must establish
(1) that the defendant made material representations that were false,
(2) that the defendant knew the representations were false and made them with the intent to deceive the plaintiff, (3) that the plaintiff justifiably relied on the defendant's representations, and (4) that the plaintiff was injured as a result of the defendant's representation.
(See Kerusa Co., LLC v W10Z/515 Real Estate Ltd. Partnership, 12 NY3d 236 [2009]; Small v Lorillard Tobacco Co., Inc. 94 NY2d 43 [1999]; Channel Master Corp. v Aluminum Limited Sales, Inc., 4 NY2d 403 [1958]; Smith v Ameriquest Mortg. Corp., 60 AD3d 1037 [2d Dept 2009]; Cash v Titan Financial Services, Inc. 58 AD3d 785 [2d Dept 2009]; Shovak v Long Island Commercial Bank, 50 AD3d 1118 [2d Dept 2008]; Sellinger Enterprises, Inc. v Cassuto, 50 AD3d 766 [2d Dept 2008]; Williams v Eason, 49 AD3d 866 [2d Dept 2008]; McMorrow v Dime Sav. Bank of Williamsburg, 48 AD3d 646, [2d Dept 2008].
Petitioners fail to specify what alleged fraudulent representations were made, who made them, how they were made, or when they were made. CPLR Rule 3016 (b) requires that in a fraud cause of action "the circumstances constituting the wrong shall be stated in detail." Not only must petitioners plead the essential elements of fraud, but petitioners must support each of the elements of fraud with specific factual details from which fraud may be inferred. (See Barclay Arms, Inc. v Barclay Arms Associates, 74 NY2d 644 [1989]; Cohen v Houseconnect Realty Corp., 289 AD2d 277 [2d Dept 2001]).
The Court of Appeals, in Pludeman v Northern Leasing Systems, Inc. (10 NY3d 486 [2008]), held:
Critical to a fraud claim is that a complaint allege the basic facts to establish the elements of the cause of action. Although under section 3016(b) the complaint must sufficiently detail the allegedly fraudulent conduct, that requirement should not be confused with unassailable proof of fraud. Necessarily, then, section 3016 (b) may be met when the facts are sufficient to permit a reasonable inference of the alleged conduct.
The lack of specificity in the instant petition fails to meet the Pludeman fraud threshold of presenting facts that "are sufficient to permit a reasonable inference of the alleged conduct." Mere conclusory statements alleging the wrong in the pleadings are insufficient. (McGovern v Nassau County Dept. of Social Services, 60 AD3d 1017 [2d Dept March 1, 2009]; Sargiss v Magarelli, 50 AD3d 1117 [2d Dept 2008]; Dumas v Firoito, 13 AD3d 332 [2d Dept 2004]; Sforza v Health Ins. Plan of Greater New York, 210 AD2d 214, 215 [2d Dept 1994].
Conclusion
Accordingly, it is
ORDERED, that the petition of ABRAHAM EIMER and HINDY EIMER to compel respondents, THE BOARD OF MANAGERS OF 5316 14th AVENUE CONDOMINIUM and D & D MANAGEMENT SERVICES CORP., to arbitrate four notices of liens for unpaid common charges, pursuant to CPLR § 7503; enjoin respondents, THE BOARD OF MANAGERS OF 5316 14th AVENUE CONDOMINIUM and D & D MANAGEMENT SERVICES CORP., from taking any actions against petitioners, ABRAHAM EIMER and HINDY EIMER, in any other forum pending the conclusion of the arbitration; and, vacate and cancel the aforementioned four notices of liens for unpaid common charges filed by respondent THE BOARD OF MANAGERS OF 5316 14th AVENUE CONDOMINIUM with the Office of the City Register of the City of New York; is dismissed in its entirety; and it is further
ORDERED, the cross-motion of respondent THE BOARD OF MANAGERS OF 5316 14th AVENUE CONDOMINIUM, pursuant to CPLR Rule 3211 (a) (1) and (7), to dismiss the instant petition filed against it by petitioners, ABRAHAM EIMER and HINDY EIMER, because there is a defense founded upon documentary evidence and the petition fails to state a cause of action, is granted in its entirety.
This constitutes the decision and order of the Court.