Opinion
Index No. 158766/2020
04-20-2022
Gregg SINGER, Sing Fina Corp., 9th and 10th Street LLC, Plaintiff, v. Bill DE BLASIO, New York City Department of Buildings, Aaron Sosnick, Paul Wolf, East Village Community Coalition, Inc., George Artz Communications, Inc., HR & A Advisors, Inc., Defendant.
Plaintiff by: Gerstman Schwartz LLP, 1399 Franklin Avenue, Suite 200, Garden City, NY 11530 Defendants by: New York City Law Department, 100 Church Street, New York, NY 10007 Dentons US LLP, 1221 Avenue of the Americas, New York, NY 10020 Rosenberg & Estis, 733 Third Avenue, New York, NY 10017 London Fischer LLP, 59 Maiden Lane, New York, NY 10036
Plaintiff by:
Gerstman Schwartz LLP, 1399 Franklin Avenue, Suite 200, Garden City, NY 11530
Defendants by:
New York City Law Department, 100 Church Street, New York, NY 10007
Dentons US LLP, 1221 Avenue of the Americas, New York, NY 10020
Rosenberg & Estis, 733 Third Avenue, New York, NY 10017
London Fischer LLP, 59 Maiden Lane, New York, NY 10036
Andrew Borrok, J.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 37, 38, 39, 40, 41, 42, 43, 72, 73, 82, 83 were read on this motion to/for DISMISS.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 71, 74, 75, 85 were read on this motion to/for DISMISS.
The following e-filed documents, listed by NYSCEF document number (Motion 003) 54, 55, 56, 57, 58, 59, 60, 61, 62, 76, 77, 80, 84 were read on this motion to/for DISMISS.
The following e-filed documents, listed by NYSCEF document number (Motion 004) 63, 64, 65, 66, 67, 78, 79, 81, 86 were read on this motion to/for DISMISS.
This case is the latest chapter in the contentious ownership and attempted development of 605 East Ninth Street (aka former P.S. 64; the Property ), which Gregg Singer bought 23 years ago at auction from New York City. In short, Mr. Singer alleges that Aaron Sosnick employed certain lobbying groups to unlawfully influence former New York City Mayor Bill de Blasio and the New York City Department of Buildings (DOB ) (collectively, the City Defendants ) to stymie his ability to develop the Property and to wrest control of it from him so that he could buy it for himself and develop it. Indeed, the gravamen of Mr. Singer's complaint is that Mr. de Blasio and certain City officials acted outside of the scope of their official capacity at the Sosnick Defendants’ (hereinafter defined) behest to block Mr. Singer's ability to develop the Property and to force a sale of the Property to the Sosnick Defendants.
To wit, according to Mr. Singer, among other things, knowing that Adelphi University had a right to terminate its proposed lease (the Adelphi Lease ) if approval from the City had not been obtained by June 1, 2017 (because Section 4.1(c) of the Adelphi Lease that the City was reviewing contained this termination right) and that Mr. Singer had obtained a bridge loan from Madison Realty Capital (Madison ), Aaron Sosnick, Paul Wolf, East Village Community Coalition, Inc. (EVCC ), George Artz Communications, Inc. (GAC ), and HR & A Advisors, Inc. (collectively, the Sosnick Defendants ) influenced the City to purposefully delay exercising its approval rights until after Adelphi had terminated the lease (NYSCEF Doc. No. 1 ¶¶ 56-72). In support of these allegations, Mr. Singer adduces a number of emails and letters between the Sosnick Defendants and certain correspondence with various city employees and agencies regarding their desire to prevent the Plaintiffs from obtaining their building permits from the DOB, and interfere with Plaintiffs’ Cooper Union, Joffrey and Adelphi Leases as well as a potential lease with CUNY (NYSCEF Docs. No. 3, 8, 20, 24). Among other things, Mr. Singer provides emails sent by Mr. Wolf on behalf of the Sosnick Defendants to various City officials, and to Madison, in which he blatantly and improperly attempted to influence them by asserting that Mr. Singer had rejected their offers to purchase the Property for $50 million (NYSCEF Docs. No. 10, 14).
Additionally, Mr. Singer alleges to further the Sosnick Defendants’ scheme, Mr. de Blasio made certain allegedly false public statements to signal to Adelphi that their lease would not be approved because the Property would be purchased by the City (NYSCEF Doc. No. 1 ¶¶ 86-95) so that Adelphi would exercise their termination rights under the lease. This according to Mr. Singer was designed to, and did, frustrate his ability to negotiate with Adelphi for additional time to obtain City approval. Based on these alleged unlawful delays and intentional interference from the City, Adelphi exercised its cancellation rights. Ultimately, according to Mr. Singer, the City wrongfully rejected the Adelphi lease which Adelphi lease had previously been approved "as of right" (NYSCEF Doc. No. 1 ¶¶ 63-64) and caused Madison to foreclose on the bridge loan. Mr. Singer also alleges that the City inappropriate blocked his ability to lease the Property to CUNY (Id. at ¶¶ 87, 142 n 35).
This malicious conduct as alleged was calculated and orchestrated by the Defendants in this case. As alleged, Mr. de Blasio and the City were not acting within the scope of their governmental function and the lobbyists in this case were not lobbying for proper purpose. As such, neither the Noerr-Pennington doctrine nor the governmental immunity defense protects this alleged conduct.
To be clear although this is not the first action brought by Mr. Singer , none of his state law claims asserted in this action have been addressed on the merits in any of the Prior Lawsuits.
Previously, Mr. Singer filed the 1st Article 78 Proceedings, the 2nd Article 78 Proceeding, and the 2017 Action in New York State Supreme Court, and a lawsuit in the U.S. District Court for the Southern District of New York (collectively, the Prior Lawsuits ).
In this lawsuit, Mr. Singer seeks $330 million compensatory damages, punitive damages, interest and costs, against the Defendants for (i) tortious interference with existing business relations (first cause of action) (ii) tortious interference with prospective business relations (second cause of action) and (iii) prima facie tort (third cause of action). For the reasons set forth below, the motions to dismiss are granted solely to the extent that the claim for tortious interference with contractual relations is dismissed and the prima facie tort claim is dismissed without prejudice.
The Relevant Facts and Circumstances
In 1999, Mr. Singer purchased the Property at auction for $3.15 million with the intent to develop it (NYSCEF Doc. No. 1, ¶ 104). At the time, the deed was subject to zoning restrictions for "Community Facility Use," which limited the ways in which the property could be developed (Index No. 161272/2017; NYSCEF Doc. No. 1, ¶ 17). Since that time, Mr. Singer has initiated various attempts to develop the property as a dormitory facility in accordance with the zoning restrictions. None have been successful.
In 2005, the DOB denied Mr. Singer's permit application to construct a 19-story dormitory on the Property. When the Board of Standards and Appeals (BOA ) denied his appeal of the DOB determination, Mr. Singer filed an Article 78 Petition captioned 9th & 10th St. L.L.C. v Bd. of Stds. & Appeals of the City of New York, Index No. 116091/2005 (the 1st Article 78 Proceeding ; 9th & 10th St. L.L.C. v Bd. of Stds. & Appeals of the City of New York , 12 Misc 3d 1183(A) [Sup Ct, NY County 2006] ; revd 43 AD3d 36 [1st Dept 2007] ; revd 10 NY3d 264 [2008] ) in which he alleged that the determinations of the DOB and BSA were arbitrary and capricious. In sum and substance, he argued that he was entitled to the building permit "as-of-right" because the proposed building would constitute a "community facility" (9th & 10th St. , 12 Misc 3d at *3). The Supreme Court, New York County (Stallman, J.) did not agree and dismissed the Petition finding that (i) the DOB had a rational basis to refuse to grant the permit because Mr. Singer failed to provide adequate proof of an "institutional nexus" between the proposed dormitory and a known educational institution and (ii) as a result, the BSA determination denying his appeal was not arbitrary and capricious (Id. at *8). The First Department reversed because the denial was based upon the future use of the building and not the actual use as set forth in the permit application ( 9th & 10th St. , 43 AD3d at 41-43 citing Matter of Di Milia v Bennett , 149 AD2d 592 [2nd Dept 1989] ; Matter of Baskin v Zoning Bd. of Appeals of Town of Ramapo , 40 NY2d 942 [1976] ). However, ultimately, the Court of Appeals reinstated the trial court's order because "where [City] officials reasonably fear that the legal use proposed for a building will prove impracticable, it is not improper to insist on a showing that the applicant can actually do what it says it will do" ( 9th & 10th St. , 10 NY3d at 269 ).
Intentionally Omitted.
9th and 10th St. L.L.C. is Mr. Singer's entity which owns the Property.
While the 1st Article 78 Proceeding ensued, political pressure mounted and on June 20, 2006, the New York City Landmarks Preservation Commission landmarked the building at the Property (Index No. 161272/2017; NYSCEF Doc. No. 1, ¶¶ 34-35). As a result, Mr. Singer could no longer consider demolishing or adding on to the original 5-story building (Id. at ¶ 36).
In December 2012, Mr. Singer entered into a 15-year lease with the Cooper Union for the Advancement of Science and Art (the Cooper Union Lease ) to lease the second and third floors of the building for dormitory beds that would be licensed to students (Id. at ¶¶ 41, 44). Mr. Singer filed an application for a building permit in connection with the Cooper Union lease in February 2013 (Id. at ¶ 47).
In May 2013, Mr. Singer entered into a 10-year lease with the Joffrey Ballet Center, Inc. (the Joffrey Lease ) to use the ground and first floors for dormitory beds in the same way that the Cooper Union Lease intended, which was incorporated into the permit application (Id. at ¶ 49).
On August 22, 2014, the DOB granted Mr. Singer's application and issued demolition and other work permits to allow for the conversion of the building into dormitories (Id. at ¶¶ 53-54). Remarkably, approximately one month later and after the work had begun, on September 22, 2014, allegedly at the insistence of Councilwoman Rosie Mendez, the DOB issued stop work orders (Id. at ¶¶ 48, 55-57). Notwithstanding that the DOB had already reviewed the Cooper Union Lease and issued the permits to do the work for the Cooper Union Lease without objection, the DOB then issued objections to certain language in the Cooper Union Lease which permitted the Landlord to rent unlicensed beds to "any other school and Tenant will not be responsible for such beds" (Id. at 60). Although Mr. Singer agreed to cure the objection by including new language approved by the DOB, Cooper Union never signed an updated lease, and instead terminated it on July 12, 2016 (Id. at ¶¶ 61, 67). The Joffrey Ballet School also terminated its lease based on the DOB stop work orders (9th & 10th Street LLC v City of New York , Sup Ct, NY County, February 8, 2019, Tisch J., Index No. 161272/2017).
Subsequently, Mr. Singer sought a series of zoning resolution determinations (ZRDs ) for clarification on issues relating to Zoning Resolution 12-10 and Section 51-01 of the Administrative Code (the Dorm Rule ). On June 19, 2015, the DOB issued its first responsive ZRD, which stated that pursuant to Zoning Resolution 12-10, making "the dormitory space available to non-matriculated students and student interns in those months outside of the normal school year is in keeping with the mission of an educational institution" (ZRD No. 1 ; Index No. 161272/2017, NYSCEF Doc. No. 13).
Approximately, a year later, on May 26, 2016, the DOB issued its second ZRD (ZRD # 2 ; Index No. 161272/2017, NYSCEF Doc. No. 14) which indicated that a qualified lease for a portion of the building was sufficient under the Dorm Rule.
Mr. Singer had also sought clarification as to whether a licensing provision in any proposed lease with an authorized institution would be accepted under the Dorm Rule. On August 4, 2016 (i.e. , three months after ZRD #2 was issued) the DOB issued a third ZRD (ZRD # 3 ; Index No. 161272/2017, NYSCEF Doc. No. 16). In ZRD # 3, the DOB acknowledged:
(1) Tenant may designate Landlord or Landlord's agent, to act, during the school year, as its agent to license beds to the institutions that (a) qualify under 1 RCNY 51-01 and (b) lease and occupy space in the building for sub-license to that institution's students and, (2) Tenant may designate Landlord or Landlord's agent, during the summer months, to act as its agent to license beds for the summer term to student interns, non-matriculated students and to Tenants matriculated students, if any.
(Id. ).
Following the issuance of ZRD # 2, and on or about the same time that ZRD # 3 was issued, Mr. Singer entered into a 10-year lease agreement with Adelphi University (Adelphi ) to use two floors of the Property as a dormitory for their students (the Adelphi Lease ; NYSCEF Doc. No. 1, ¶ 51). The Lease contained a termination provision that allowed Adelphi to terminate the Lease if a building permit was not issued by the DOB by June 1, 2017 (Id. at ¶ 53). To facilitate necessary construction for Adelphi's occupancy, Mr. Singer obtained a $44 million bridge loan (the Loan ) from Madison Realty Capital (Madison ). The Loan was conditioned on the Lease being approved by the DOB (Id. at ¶ 6). Shortly after the Adelphi Lease was signed, it was submitted to the DOB as part of a permit application.
Mr. Singer contends that once the ZRDs were issued, the Adelphi Lease should have been approved as of right. However, knowing that Adelphi could terminate the Adelphi Lease if approval was not obtained by June 1, 2017, Mr. Singer contends that the Greenwich Village Society for Historic Preservation (GVSHP ), Councilwoman Mendez, representatives from the Manhattan Borough President's Office, Mr. Sosnick, East Village Community Coalition, Inc. (EVCC ), George Artz Communications, Inc. (GAC ), HR & A Advisors (HR & A ), Paul Wolf, and Mr. de Blasio launched a lobbying campaign against him that delayed the DOB's review of his permit until after Adelphi exercised its rights to terminate the Adelphi Lease.
In January 2017, Mr. Wolf sent an email to the Commissioner of City Planning stating his representation of a charitable entity that sought to purchase the Property for a purchase price of $50,000,000 (NYSCEF Doc. No. 10). In the email, Mr. Wolf writes "I am reaching out to you to let the City know there is a real option out there for Gregg [Singer] to exit the building and make a lot of money (so he can't claim he is being harmed), and hopefully support the City's effort to stop his latest scheme" (Id. ).
On August 22, 2017 (approximately one year after Mr. Singer alleges that he entered into the Adelphi Lease), the City ultimately did not approve it. As a result, on October 11, 2017, Adelphi exercised its right to terminate the Adelphi Lease and the Loan went into default.
The day after Adelphi exercised its right to terminate — i.e. , on October 12, 2017, Mr. de Blasio spoke at a Town Hall press conference where Mr. Singer alleges that he falsely proclaimed that the City was "interested in reacquiring" the Property (NYSCEF Doc. No. 1, ¶¶13, 120). These allegedly false statements were reaffirmed by Mr. de Blasio at a second press conference on August 24, 2018, where Mr. de Blasio alleged that Mr. Singer was "exceedingly uncooperative" in discussions for the City to repurchase the building, although repurchasing the property was "not off the table," and that the possibility of acquiring the Property through eminent domain was also being considered, just days before Madison began seeking foreclosure against Plaintiffs on their bridge loan (Id. at ¶¶15-17, 121). No evidence is offered that the City, in fact, seriously considered either option or offered any sum of money to Mr. Singer to repurchase the Property.
In December 2017, Mr. Singer filed an action in Supreme Court, New York County against the City of New York and the DOB captioned 9th & 10th Street LLC v City of New York , Sup Ct, NY County, February 8, 2019, Index No. 161272/2017 (the 2017 Action ) seeking a declaratory judgment that (i) the Dorm Rule was not applicable to the permit requested on his property, or (ii) in the alternative, a determination that the licensing requirement in the Adelphi Lease satisfied the "ownership or control" requirement of the Dorm Rule. In a Decision and Order, dated February 8, 2019, the Court (Tisch, J.) dismissed the case holding that Mr. Singer had failed to exhaust his administrative remedies because he had failed to file a ZRD1 request and had thus never received a final determination on the applicability of the Dorm Rule from the DOB.
In January 2018, Mr. Singer filed a federal lawsuit in the U.S. District Court for the Southern District of New York captioned Singer v. City of New York , 417 FSupp3d 297 [SDNY 2019] against the City of New York, the DOB, GVSHP, Mr. de Blasio, Councilwoman Mendez, Carlina Rivera, Andrew Berman, and Mr. Sosnick (the SDNY Action) asserting claims pursuant to 42 USC §§ 1983, 1985 and 1986, First Amendment retaliation, equal protection, and conspiracy. He also asserted state law claims for tortious interference with prospective economic advantage ( Id. at 314 ). In a Decision and Order dated September 30, 2019, the Court (Gardephe, J.) dismissed the federal claims and declined to exercise supplemental jurisdiction over the state law claims.
After the 2017 Action was dismissed, and so that he could get a building permit (now approximately 12 years after buying the Property), Mr. Singer sought another ZRD from the DOB seeking a determination that the Dorm Rule was not applicable to the Property, or in the alternative, a temporary waiver of the Dorm Rule so that he could finally obtain a building permit. On May 10, 2019, the DOB issued a fourth ZRD (ZRD # 4 ; Index No. 158768/2019, NYSCEF Doc. No. 21) determining that the Dorm Rule is applicable to the Property and denying Mr. Singer's request for a temporary waiver.
While Mr. Singer was awaiting the issuance of ZRD # 4, in February 2019, Mr. Wolf once again attempted to interfere with Mr. Singer's ownership of the building by emailing Madison directly to repeat its interest in purchasing the Property, as he had previously expressed to the City (NYSCEF Doc. No. 14). In this email, Mr. Wolf did not state at what price his "very interested buyers" would actually purchase the Property, but reiterated that "if there is the opportunity to acquire the property before it goes to market we can move very quickly" (Id. ).
In September 2019, Mr. Singer filed a second Article 78 Petition in New York State Supreme Court, New York County captioned 9th & 10th Street, LLC v Bill de Blasio , Index No. 158768/2019 (the 2nd Article 78 Proceeding ) against Mr. de Blasio, the City of New York and the DOB seeking (1) a writ of mandamus that ordered the DOB to issue a building permit and reclassify the building from User Group 3 to User Group 2 under the Zoning Resolutions; and (2) a writ of prohibition enjoining the DOB from acting on a Notice of Violation dated June 28, 2019 which required certain emergency repairs to the building. By Decision and Order dated June 23, 2021, the Court (Crane, J.) dismissed the 2nd Article 78 Petition and denied Mr. Singer's motion to amend the Petition finding that Mr. Singer had failed to exhaust his administrative remedies because it never sought zoning reclassification from the DOB, and never appealed ZRD # 4 to the BSA.
Approximately four months later, Mr. Singer brought this lawsuit.
Discussion
On a motion to dismiss, the pleading is to be afforded a liberal construction and the court must accept the facts as alleged as true, according plaintiffs the benefit of every possible inference, to determine whether the facts as alleged fit within any cognizable legal theory ( Leon v Martinez , 84 NY2d 83, 87-88 [1994] ). The Court must determine "whether the pleader has a cause of action rather than on whether he has properly stated one" ( Rovello v Orofino Realty Co. , 40 NY2d 633, 636 [1976] ).
I. The Statute of Limitations Does Not Bar This Lawsuit
CPLR § 214 requires that plaintiffs bring a cause of action for tortious interference with contract or prospective business relations within three years of the date that the claim accrued.
The Defendants argument that Plaintiffs missed the three-year statute of limitations for all three claims by eight days fails. They have failed to take into account Executive Order 202.67, dated October 4, 2020, which extended the suspension of the time limit under the CPLR for commencement of an action originally set forth in Executive Order 202.8 until November 3, 2020 (Executive Order No. 202.67 [ 9 NYCRR § 8.202.67 ]). Thus, assuming the claims accrued on October 11, 2017 as the Defendants contend in their moving papers, the claims are timely.
For completeness, GAC's argument that a one-year statute of limitations and not a three-year state of limitations should apply to Plaintiffs’ prima facie tort claim is not correct. Because Plaintiffs’ prima facie tort claim sounds in intentional interference with prospective opportunities, and the injury alleged is based upon economic loss, a three-year statute of limitations applies to the claim (See Susman v Commerzbank Capital Mkts. Corp. , 95 AD3d 589 [1st Dept 2012] ; Classic Appraisals Corp. v Desantis , 159 AD2d 537 [2nd Dept 1990] ).
II. Article 78 Proceedings and Collateral Estoppel
The City Defendants relying on Clissuras v City of New York , 131 AD2d 717 [2nd Dept 1987] argue, in part, that the matter must be dismissed because an Article 78 Proceeding is the proper procedural vehicle to obtain judicial review of the administrative determinations. The argument fails. In Clissuras , the Appellate Division held that dismissal of a retired teacher's claim that her pension benefits were improperly calculated as untimely was proper because the crux of her claim were subject to the four-month statute of limitations to bring an Article 78 claim. Stated differently, the holding of Clissuras is that the statute of limitations on the claims in that case had run.
Mr. Singer does not solely challenge the determination of the City in this proceeding and the City Defendants in this action do not argue that his claims are untimely because they are subject to a four month statute of limitations as in an Article 78 proceeding. This is not the gravamen of the complaint. As discussed above, the well pled complaint alleges that the Sosnick Defendants caused Mr. de Blasio and the City to act outside of their official capacity and to use their offices and official roles for improper purpose — i.e. , to block Mr. Singer and to force a sale of the property to Mr. Sosnick so that he and not Mr. Singer could develop it.
Additionally, the City Defendants’ argument that the claims raised in the instant action are precluded by the Prior Lawsuits is wrong. As discussed above, no court to date has addressed the merits of Mr. Singer's claims.
III. The Governmental Immunity Defense Does Not Apply to these Allegations
The City Defendants argue that they are entitled to immunity based on the "governmental function" defense. The argument fails.
Government exposure for tort liability hinges on whether the challenged conduct or act is discretionary or ministerial. For discretionary acts, i.e., where the "conduct involved the exercise of reasoned judgment", the government is entitled to immunity ( Valdez v City of New York , 18 NY3d 69, 76 [2011] ).
Although the bar is high, the allegations here which the Court must take as true at this stage of the proceedings are that the actions of Mr. de Blasio and the City were not discretionary. As alleged, approval of the Adelphi Lease was ministerial and "as of right" based on the fact that it had been previously approved (NYSCEF Doc. No. 1 ¶¶ 66-70) and Mr. de Blasio's public statements were deliberate, without proper purpose, and with the intended purpose of causing disruption to Mr. Singer's ownership of the Property — which they did. In addition, as alleged, the DOB's denial of the building permit and the Adelphi Lease had nothing to do with the merits of Mr. Singer's application or the exercise of any discretion. Rather, this had everything to do wresting control of the Property from Mr. Singer for the Sosnick Defendants. As such, at this stage of the proceeding, Mr. de Blasio and the City are not entitled to immunity.
IV. The Noerr-Pennington Doctrine Also Does Not Provide Immunity
GAC, Mr. Sosnick, EVCC and Mr. Wolf argue that their lobbying activities make them immune from suit pursuant to the Noerr-Pennington doctrine. The argument fails at this stage of the proceeding.
Under the Noerr-Pennington doctrine, "citizens who petition the government for governmental action favorable to them cannot be prosecuted under the antitrust laws" ( Alfred Weissman Real Estate, Inc. v Big V Supermarkets, Inc. , 268 AD2d 101, 106-107 [2nd Dept 2000] ). Courts have been broad in their application of the doctrine, concluding that efforts to influence government as part of a broader scheme, or by the use of questionable or underhanded activity, are still immune from liability ( Id. at 107 ; See also Villanova Estates, Inc. v Fieldston Property Owners Ass'n, Inc. , 23 AD3d 160 [1st Dept 2005] ).
There is however an important "sham" exception to the immunity provided by the Noerr-Pennington doctrine which applies to the facts as alleged. The ‘sham’ exception is implicated when the party petitioning the government is not at all serious about the object of the petition and is only petitioning the government to inconvenience its competitor, or to preclude or delay its competitor's access to governmental processes ( Weissman , 268 AD2d at 109 ).
The Appellate Division has held that the "sham" exception has both an objective and a subjective element ( Singh v Sukhram , 56 AD3d 187, 192 [2nd Dept 2008] ). The objective element requires the defendant's conduct to be objectively without merit and with no reasonable expectation of success ( Id. at 192 ). The subjective element requires that the defendant is acting to interfere directly with the business relationship of a competitor (Id. ).
As discussed above, the case at nisi prius, involves a 23 year history of the Sosnick Defendants actively working, not only to block Mr. Singer from developing the Property, but to purchase it out from under him. Mr. Singer alleges among other things that the Defendants "personally and collectively sought to divest Plaintiffs of their property rights effectively ‘tarring and feathering’ the Plaintiffs by intentionally making false accusations about the Plaintiffs’ motives, intentions, integrity and goals" (NYSCEF Doc. No. 1, ¶ 5); that "the Privateer-Defendants used the public sector Defendants to effectuate an improper scheme masquerading as public interest advocacy while actually and knowingly behind the scenes improperly — and perhaps even unlawfully — interfering with Plaintiffs’ existing and prospective rights and opportunities" (Id. at ¶11); that "EVCC was funded by Aaron Sosnick and use to achieve Aaron Sosnick's business objectives including the hiring of lobbyists to effectuate Aaron Sosnick's will, which, including thwarting the development of Mr. Singer's property by any means necessary, included tortiously interfering with his lease and prospective future leases" (Id. at 38); that "Defendants were fully aware that a developer's inability to develop is financially devastating. This is exactly the result that the Defendants hoped for — grind the project to a halt in order to push Plaintiffs’ new lessee, Adelphi University, out of the equation" (Id. at 77). Furthermore, as discussed above, Plaintiffs attach emails to the complaint by the Sosnick Defendants to the City and Plaintiffs’ lender, one of which openly states "there is a real option out there for [Mr. Singer] to exit the building and make a lot of money (so he can't claim he is being harmed) and hopefully support the City's effort to stop his latest scheme" (NYSCEF Doc. No. 10). To be clear, Mr. Singer doesn't allege that the lobbyists were engaged in public advocacy — rather, they were hired as part of Mr. Sosnick's coordinated scheme to cause a loan default and purchase the Property from the lender.
Accepting the allegations as true in the well-pled complaint as the Court must at this stage of the proceeding and given Mr. Sosnick's alleged desire to own the Property (NYSCEF Doc. No. 1 ¶¶ 88, 93), the well pled complaint alleges sufficient facts to fall within the sham exception to the Noerr-Pennington doctrine at this stage of the proceeding (See People v Northern Leasing Systems, Inc. , 169 AD3d 527 [1st Dept 2019] ).
V. Civil Rights Law § 76-a(1)(a) Does Not Bar This Lawsuit
Relying primarily on Bennett v Towers , 43 Misc 3d 661 [Sup Ct, Nassau County 2014], Mr. Sosnick and EVCC argue that the Plaintiffs are precluded from bringing these claims under Civil Rights Law § 76-a(1)(a) i.e. , the so-called Anti-SLAPP statute because their lobbying efforts were against Mr. Singer's building permit which they contend involves "public petition or participation." This argument also fails.
The Appellate Division has recognized that the purpose of the Anti-SLAPP statute was "to prevent the intimidation of individuals who speak out at public meetings and other activities requiring approval of public boards ( Hariri v Amper , 51 AD3d 146, 148-149 [1st Dept 2008] citing 600 W. 115th St. Corp. v Von Gutfeld , 80 NY2d 130 [1992] ).
As discussed above, Mr. Singer alleges improper conduct, abuse of office, and the City and the DOB's improper denial of a building permit and active participation in blocking Mr. Singer for 23 years in developing the Property at the behest of Mr. Sosnick — not the proper exercise of individuals seeking to speak out at public hearings or activities requiring approval of public boards.
VI. GAC and Mr. Wolf Are Not Immune From Liability Because They Acted as Agents
Relying on Brumbaugh v CEJJ, Inc. , 152 AD2d 69, 70 [3rd Dept 1989] and Devash LLC v German Am. Capital Corp. , 104 AD3d 71 [1st Dept 2013], GAC and Mr. Wolf both argue that because they were acting as agents of Mr. Sosnick, they are insulated from liability. The arguments fail.
An agent may not escape liability for its own tortious conduct and "under tort law both the principal and agent may be found jointly and severally liable for the agent's torts." Brumbaugh v CEJJ, Inc. , 152 AD2d 69, 70 [3rd Dept 1989]. In a case alleging tortious interference with prospective economic relations and not tortious interference with contract, the Devash Court indicated that the plaintiff must show that defendants were "wrongful or motivated solely by malice, as opposed to its normal economic interests" ( 104 AD3d at 79 ). Because the complaint alleges malice on behalf of these Defendants (NYSCEF Doc. No. 1 ¶¶ 5 137-139, 153-155) including their participation in this coordinated scheme by Mr. Sosnick to force a sale to him so that he could develop the Property and not Mr. Singer, they are not shielded from liability.
VII. Tortious Interference with Contractual Relations Must be Dismissed
To plead a cause of action for tortious interference with contractual relations, a party must show (i) the existence of an enforceable contract, (ii) the defendant's knowledge of the existence of that contract, (iii) the intentional procurement by the defendant of the breach of the contract, and (iv) resulting damages ( Joan Hansen & Co., Inc. v Everlast World's Boxing Headquarters Corp. , 296 AD2d 103, 111 [1st Dept 2002] ). Simply put, and as discussed above, Adelphi did not breach the Adelphi Lease (NYSCEF Doc. No. 1, ¶ 53 ["Adelphi had the right to terminate the Lease agreement if a building permit was not obtained by June 1, 2017"]). They exercised their right to terminate. Mr. Singer's argument that the Defendants interfered with the Madison Loan fairs no better. The lender merely exercised its rights under the loan documents. As such, this claim must be dismissed.
VIII Tortious Interference with Prospective Business Relations
The elements of tortious interference with prospective business relations are: "(i) business relations with a third party; (ii) the defendant's interference with those business relations; (iii) the defendant acting with the sole purpose of harming the plaintiff or using wrongful means; and (iv) injury to the business relationship" ( Advanced Global Technology LLC v Sirius Satellite Radio, Inc. , 15 Misc 3d 776, 779 [Sup Ct, NY County 2007] ). To plead a cause of action for tortious interference with prospective business relations, the plaintiff must plead that the defendant's interference was accomplished by wrongful means or that defendant acted for the sole purpose of harming the plaintiff ( GS Plasticos Limitada v Bureau Veritas , 88 AD3d 510 [1st Dept 2011] quoting Snyder v Sony Music Entertainment , 252 AD2d 294, 299-300 [1st Dept 1999] ). " ‘Wrongful means’ include[s] physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure" ( Arnon Ltd v Beierwaltes , 125 AD3d 453 [1st Dept 2015] quoting Carvel Corp v Noonan , 3 NY3d 182, 191 [2004] ). "Conduct constituting tortious inference with business relations is, by definition, conduct not directed at the plaintiff itself, but at the party with which the plaintiff has or seeks to have a relationship" ( Arnon , 125 AD3d at 454 citing Carvel , 3 NY3d at 192 ).
The Defendants principally argue that the Plaintiffs have failed to sufficiently allege the third element of the cause of action for tortious interference with prospective business relations because they have failed to show malice, or that the conduct was wrongful, or undertaken for the sole purpose of harming the Plaintiff. The argument fails.
As discussed, the well pled complaint alleges that the Sosnick Defendants, Mr. de Blasio and the City intentionally interfered, not only with the building permit and the Adelphi Lease, but also with prospective leases with other tenants. Put another way, the complaint alleges that even though the Adelphi Lease complied with the ZRDs, the DOB denied approval of the building permit and Adelphi Lease based upon political pressure created by the Sosnick Defendants and Mr. de Blasio.
Accordingly, the motions to dismiss the claim for tortious interference with prospective business relations are denied.
IX. Prima Facie Tort
To plead a cause of action for prima facie tort, a party must plead (i) the intentional infliction of harm, (ii) resulting in special damages, (iii) without excuse or justification, and (iv) by an act or series of acts which are otherwise legal ( AREP Fifty-Seventh, LLC v PMGP Associates, L.P. , 115 AD3d 402, 403 [1st Dept 2014] ). "While prima facie tort may be pleaded in the alternative with a traditional tort, once a traditional tort is established the cause of action for prima facie tort disappears" ( Curiano v Suozzi , 63 NY2d 113 [1984]citing Board of Educ. v Farmingdale Classroom Teachers Assn. , 38 NY2d 397 [1975] ). A "critical element of the cause of action is that plaintiff suffered specific and measurable loss, which requires an allegation of special damages" ( Freihofer v Hearst Corp. , 65 NY2d 135 [1985] ). "In pleading special damages, actual losses must be identified and causally related to the alleged tortious act" ( Waste Distillation Technology, Inc. v Blasland & Bouck Engineers, P.C. , 136 AD2d 633 [2nd Dept 1988] ). This claim must be dismissed without prejudice because Mr. Singer has not pled special damages. There is no allocation or explanation in the complaint as to the alleged $330 million in compensatory damages. More is required. Thus, Mr. Singer's claim for prima facie tort must be dismissed without prejudice.
Based upon the foregoing, it is
ORDERED that GAC's motion to dismiss (Mtn. Seq. No. 001) is granted to the extent that Plaintiffs’ claims for tortious interference with contractual relations (first cause of action) is dismissed and prima facie tort (third cause of action) is dismissed without prejudice; and it is further
ORDERED that Mr. Sosnick and EVCC's motion (Mtn. Seq. No. 002) is granted to the extent that Plaintiffs’ claims for tortious interference with contractual relations (first cause of action) is dismissed and prima facie tort (third cause of action) is dismissed without prejudice; and it is further
ORDERED that the City's motion to dismiss (Mtn. Seq. No. 003) is granted to the extent that Plaintiffs’ claims for tortious interference with contractual relations (first cause of action) is dismissed and prima facie tort (third cause of action) is dismissed without prejudice; and it is further
ORDERED that Mr. Wolf's motion to dismiss the complaint (Mtn Seq. No. 004) is granted to the extent that Plaintiffs’ claims for tortious interference with contractual relations (first cause of action) is dismissed and prima facie tort (third cause of action) is dismissed without prejudice; and it is further
ORDERED that the parties appear for a preliminary conference forthwith.