Opinion
SCNY 952/2018
12-17-2018
Paul M. LINCOLN, Claimant, v. The RESIDENCES AT WORLDWIDE PLAZA, Defendant.
Claimant, Pro Se Ira Matestsky, Esq., Ganfer Shore Leeds & Zauderer LLP, Defendant
Claimant, Pro Se
Ira Matestsky, Esq., Ganfer Shore Leeds & Zauderer LLP, Defendant
Dakota D. Ramseur, J.
Claimant Paul M. Lincoln commenced this small claims action to recover $4,755.00 from Defendant Residences at Worldwide Plaza for "loss of use of property." In sum and substance, Claimant seeks compensation for the loss of use of his condominium unit's outdoor terrace as a result of Defendant's renovation of the building's exterior. For the reasons below, Claimant is entitled to judgment in the amount of $2,345.00.
The parties, at trial and in post-trial briefs, agree on the material facts. Claimant owns Unit 7G (the "Apartment") at the Residences at Worldwide Plaza, a multi-unit condominium building located at 350 West 50th Street, New York, New York (the "Building"). Claimant's apartment is 624 square feet, nearly identical in most respects to the other "G line" units above and below the Apartment with the exception of a large terrace adding an additional 1,028 square feet. Given the relative size of the terrace and apartment, Claimant regularly utilized the terrace for personal use and to host gatherings, particularly during warmer months. For the additional square footage compared to other apartments, Claimant pays $335 more per month than other "G line" unit owners lacking terraces.
Though Plaintiff claims 623 and 1,027 square feet, respectively, these figures are refuted by condominium records (Def Exh A at "Schedule B to Declaration").
As of the trial date, for approximately seven months, Claimant's terrace was rendered unusable because his terrace has been used as a staging area for façade work, as periodically required by Local Law 11 for buildings over six stories. At trial, Claimant explained that he expected the construction to continue for at least another seven and a half months. Accordingly, while Claimant does not dispute the necessity of the façade work, Claimant argues that the façade work could be done in a different manner not rendering his terrace unusable, and that he should be compensated for the period that he paid (and will continue to pay) $335 more per month in maintenance fees than those without terraces without receiving the benefit of the terrace, representing a substantial reduction in the overall square footage of the Apartment.
In his post-trial brief, Claimant seeks $4,857.50, or $335/month multiplied by 14.5 months.
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Small claims judgments must "do substantial justice between the parties according to the rules of substantive law" ( Williams v Roper , 269 AD2d 125, 126 [1st Dept 2000] ; New York City Civil Court Act § 1804 ] ). As to the substantive law governing the subject of this action, the Court of Appeals has said that
A cooperative or condominium is by nature a myriad of often competing views regarding personal living space, and decisions taken to benefit the collective interest may be unpalatable to one resident or another, creating the prospect that board decisions will be subjected to undue court involvement and judicial second-guessing. Allowing an owner who is simply dissatisfied with a particular board action a second opportunity to reopen the matter completely before a court, which—generally without knowing the property—may or may not agree with the reasonableness of the board's determination, threatens the stability of the common living arrangement ( Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530, 539-40 [1990] ).
"The very concept of cooperative living entails a voluntary, shared control over rules, maintenance and the composition of the community. A shareholder-tenant voluntarily agrees to submit to the authority of a cooperative board, and consequently the board may significantly restrict the bundle of rights a property owner normally enjoys" ( 40 W. 67th St. Corp. v Pullman , 100 NY2d 147, 158 [2003] ).
However, "under the warranty of habitability, the obligation of a tenant to pay rent (or maintenance) is dependent upon a landlord's satisfactory maintenance of the premises in a habitable condition" ( 12-14 E. 64th Owners Corp. v Hixon , 130 AD3d 425 [1st Dept 2015], citing Park W. Mgt. Corp. v Mitchell , 47 NY2d 316, 327 [1979], cert denied 444 US 992 [1979] ). "The warranty provides that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety. When any such condition has been caused by the misconduct of the tenant or lessee or persons under his direction or control, it shall not constitute a breach of such covenants and warranties" ( 12-14 E. 64th Owners Corp. , 130 AD3d at 425, citing Real Property Law § 235-b [1 ] ). The warranty of habitability is equally applicable to proprietary lessees and lessees of rental premises ( 12-14 E. 64th Owners Corp. , 130 AD3d at 425-26 ).
Courts have recently held that the business judgment rule "does not shield cooperatives from liability for breaches of contract ... A breach of a tenant's proprietary lease by the cooperative's board of directors may be the best of the options open to the board, but that does not protect it from liability for that breach" ( Goldhirsch v St. George Tower , 142 AD3d 1044, 1046-47 [2d Dept 2016] ; see also Goldstone v Gracie Terrace Apt. Corp. , (110 AD3d 101 [1st Dept 2013] [finding, despite deference to the cooperative board's business judgment, a likelihood of success on the merits of the plaintiff's claim that repairs would constitute a breach of the proprietary lease] ).
In Goldhirsch , the plaintiff/cooperative shareholder's large shared terrace was closed for months due to required renovations, first in 2007 due to flooding and then in 2009 for—as here—"façade work mandated by a New York City local law" ( id. at 1044-45 ). The Second Department reversed Supreme Court's dismissal of the plaintiff's cause of action for breach of the implied warranty of habitability, finding that "the plaintiff is entitled to recover damages under his warranty of habitability cause of action for all periods of time that the terrace was closed" because "the plaintiff established that the water damage and subsequent closures of the terrace rendered it unfit for the uses reasonably intended by the parties" ( id. at 1045, citing 7—82 Warren's Weed New York Real Property § 82.22 [2016] ["A breach of warranty may be said to have occurred where the premises have not met the reasonable expectations of the parties."] ).
Ultimately, the Goldhirsch court affirmed Supreme Court's dismissal of the plaintiff's cause of action from 2009 onward, when the plaintiff's terrace was closed for façade work, but for a distinguishable reason: a proprietary lease provision stating that "No abatement of rent or other compensation ... shall be made or allowed because of the making or failure to make or delay in making any repairs, alterations or decorations to the building ... or for space taken to comply with any law, ordinance or governmental regulation ... unless due to Lessor's negligence" ( Goldhirsch , 142 AD3d at 1047 [holding that the plaintiff had failed, as a matter of law, to demonstrate negligence] ). To the extent that both parties provide only excerpts of the governing documents, there is no similar provision to be found.
The documents cited by the parties are subject to contract law, an important precept of which is that when parties set down their agreement in a clear, complete document, their writing should be enforced according to its terms ( W.W.W. Assoc., Inc. v Giancontieri , 77 NY2d 157, 162 [1990] ). Courts must construe contracts "so as to give full meaning and effect to all of its provisions" ( In re AMR Corp. , 730 F3d 88, 98 [2d Cir 2013] [interpreting New York law], citing Consedine v Portville Cent. Sch. Dist., 12 NY3d 286 [2009] [instructing courts to read contracts as a whole and not place "undue emphasis" upon particular words or phrase] ). Courts may not alter the contract to reflect notions of fairness or equity or extrinsic facts ( Greenfield v Philles Records, Inc., 98 NY2d 562, 569-70 [2002] ).
Plaintiff relies upon an "offering plan," which states that "[t]he purchaser of a Residential Unit which has a Terrace appurtenant thereto shall have the exclusive use of such Terrace, subject to the right of the Residential Board to regulate its use." To the extent that the document is what it purports to be (it is an undated excerpt), it provides only that exclusivity of terrace use is "subject to" the Board's reasonable regulation, discussed in other provisions cited by Defendant.
For example, the Building's By-Laws (Def Exh B , the "By-Laws") provide that "The Residential Board shall be entitled to make determinations with respect to [o]peration, maintenance and supervision of all Residential Limited Common Elements (By-Laws §§ 2.2-2.2; 2.2-2.2[s] ). The Condominium Declaration (Def Exh A , the "Declaration") provides that "The Residential Limited Common Elements" include, "[f]or purposes of structural and extraordinary repairs and replacements, all Terraces, including any fixture, equipment or Facilities used only in connection therewith but subject to the Rules and Regulations and other terms of the Plan regulating the use thereof" (Declaration §§ 8.4, 8.4-11). This permits the use of certain elements, including Claimant's terrace, but does not address any costs associated with repairs.
The By-Laws also provide that "[a]ll normal maintenance, repairs and replacements of any Terrace or Storage Room Unit shall be made by the Residential Section Unit Owner having access to such Terrace or Storage Room Unit at his own cost and expense, but any structural or extraordinary repairs or replacements to such Terrace... shall be made by the Residential Board and the cost and expense thereof shall be charged to all Residential Section Unit Owners as a Residential Common Expense " (§ 6.9-2.2). Plaintiff interprets the "cost and expense" to include the diminution of value of his Apartment stemming from the inaccessibility of his terrace; in other words, that he should be reimbursed by fellow unit owners for the overcharge. Given that this can fairly be read as ambiguous, and that Defendant drafted the documents, it is reasonable to "construe this ambiguity in the lease against the defendant, the party that drafted the lease" to find that "cost and expense" can encompass the diminution of the value of Claimant's apartment as a result of the construction ( Goldhirsch , 142 AD3d at 1046 ) ["[I]n cases of doubt or ambiguity, a contract must be construed most strongly against the party who prepared it and favorably to a party who had no voice in the selection of its language."] ).
Reading these provisions together, the Court finds a breach of warranty of habitability and, unlike Goldhirsch , no provision limiting an abatement under the circumstances presented here. Compliance with Local Law 11 may have been necessary, and Defendant's closure of Claimant's terrace rather than installation of a shed equally reasonable. The fact remains, however, that Claimant paid for a benefit which the Declaration and By-Laws guarantee, which Claimant has paid for, but which Claimant did not receive. Claimant is entitled to recover a full abatement encompassing the fair value of the terrace, calculated as seven months up to the date of trial multiplied by the additional amount ($335) that Claimant paid compared to other units lacking terraces, totaling $2,345.00. The Court cannot award any damages prospectively, as the duration of continuing façade work is speculative.
CONCLUSION/ORDER
For the above reasons, it is hereby
ORDERED and ADJUDGED that Claimant shall be awarded a monetary judgment of $2,345.00, plus interest from the commencement of this action and costs.
This constitutes the decision and order of the Court.