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Perlbinder v. Board of Managers of the 411 East 53rd Street Condominium

September 29, 2009


Judgment, Supreme Court, New York County (Marilyn Shafer, J.), entered October 1, 2008, dismissing the complaint and bringing up for review an order, same court, Justice and entry date, which, inter alia, denied plaintiffs' motion for summary judgment and granted defendant's cross motion for summary judgment dismissing the complaint unanimously reversed, on the law, without costs the judgment vacated in its entirety, the motion granted and cross motion denied. The matter is remanded for a determination as to damages.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Tom, J.P., Saxe, Sweeny, Acosta, Abdus-Salaam, JJ.


Plaintiffs were partners in East 85th Street Company when it began to convert the building it owned at 411 East 53rd Street to condominium ownership. The conversion was completed in 1986, at which time plaintiffs acquired title to 16 unsold units in the newly formed condominium.

In November 1987, the condominium held its first Board elections. Pursuant to § 2.7 of the condominium by-laws, plaintiff Barton Mark Perlbinder (Perlbinder) was designated by the Sponsors' "designees" to be a "Sponsor Representative" on the Board. He remains a board member to this date.

In April 1988, an 11th Amendment to the offering plan was filed, identifying which partners had received unsold units in 1986, and providing that each such partner is a "designee" of the sponsor. A 12th Amendment, filed in November 1989, contained similar information.

On October 25, 2007, Perlbinder faxed a letter to the condominium's managing agent, advising that, pursuant to § 5.8 (C)of the by-laws, plaintiffs intended to install a 24" x 30" sign on the building, advertising the availability for sale of one of the remaining 6 original units still held by them. On October 29, the managing agent responded by letter requesting additional information about the sign - specifically, a drawing, dimensions, proposed location, type of material, and method of attachment to the building. This request went unanswered, and on November 13, plaintiffs, purporting to act as sponsor designees, had the sign installed next to an existing sign placed on the building by the management company. According to plaintiffs, their sign was designed to "coordinate" with the management company's sign and be installed at the same elevation so as to complement the existing sign.

Shortly thereafter, defendant's executive committee conducted an "informal poll" of all the board members, except for Perlbinder. Defendant directed that the sign be removed. Perlbinder was not consulted because the executive committee considered him to be an "interested party in the matter." On November 14, 2007, the sign was removed.

Plaintiffs thereafter commenced this action seeking, inter alia, a declaration that they have the right to place signs on the building as provided in the by-laws of the condominium as well as injunctive relief barring defendant from removing or interfering with any signs erected pursuant to those by-laws. Plaintiffs also sought damages for breach of defendant's fiduciary duty by unjustifiably interfering with their right to advertise the unsold units. Issue was joined, consisting of denials and affirmative defenses; one such affirmative defense contended that plaintiff's claims were barred by the business judgment rule. Defendants did not seek any affirmative relief.

In denying plaintiffs' motion and granting defendant's cross motion for summary judgment, the court determined that the right of the sponsor set forth in the declaration to put up "for sale" signs was distinct from the broader right to use the condominium common elements, thus giving the right to post sales signs solely to the Sponsor and not its designees. Noting that the by-laws provided that in the event of inconsistent provisions, the Declaration would control, the court ruled that § 5.8(C), relied on by plaintiffs, was overruled by the declaration's exclusive reservation of that right to the original Sponsor.

In construing a contract, "An interpretation that gives effect to all the terms of an agreement is preferable to one that ignores terms or accords them an unreasonable interpretation" (Ruttenberg v Davidge Data Sys. Corp., 215 AD2d 191, 196 [1995]). Therefore, "where two seemingly conflicting contract provisions reasonably can be reconciled, a court is required to do so and to give both effect" (Proyecfin de Venezuela v Banco Indus. De Venezuela, 760 F2d 390, 395-396 [2d Cir 1984]; see G & B Photography v Greenberg 209 AD2d 577, 581 [1994]). Furthermore,, "agreements executed at substantially the same time and related to the same subject matter are regarded as contemporaneous writings and must be read together as one" (Flemington Natl. Bank & Trust Co. [N.A.] v Domler Leasing Corp., 65 AD2d 29, 32 [1978], affd, 48 NY2d 678 [1979]).

To apply these principles here, it is necessary to examine the provisions of the various condominium ...

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