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The Plaza Ph2001 LLC, Plaintiff-Appellant v. Plaza Residential Owner Lp

June 26, 2012

THE PLAZA PH2001 LLC, PLAINTIFF-APPELLANT,
v.
PLAZA RESIDENTIAL OWNER LP, ET AL., DEFENDANTS-RESPONDENTS. THE PLAZA PH2001 LLC, PLAINTIFF-APPELLANT,
v.
PLAZA RESIDENTIAL OWNER LP, ET AL., DEFENDANTS-RESPONDENTS.



The opinion of the court was delivered by: Saxe, J.

Plaza PH2001 LLC v Plaza Residential Owner LP

Decided on June 26, 2012

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.

SUPREME COURT, APPELLATE DIVISION First Judicial Department

David B. Saxe,J.P.

John W. Sweeny, Jr. Helen E. Freedman Sallie Manzanet-Daniels, JJ.

Plaintiff appeals from the order of the Supreme Court, New York County (Joan M. Kenney, J.), entered November 30, 2010, which, among other things, granted the motion to dismiss the complaint filed under index No. 600732/10 (second action) and award attorneys' fees, the order, same court and Justice, entered March 16, 2011, which denied plaintiff's motion to, among other things, vacate the order entered November 30, 2010 and consolidate the second action with an earlier action filed by plaintiff under index No. 602673/08 (first action), order, same court and Justice, entered May 4, 2011, which, to the extent appealed from as limited by the briefs, granted the motion to dismiss the amended complaint in the first action, and the order, same court and Justice, entered August 22, 2011, which, sua sponte, vacated an order entered on or about June 30, 2011 reinstating the original complaint in the first action, and dismissed the first action with prejudice.

This litigation arose because plaintiff's expectations for the penthouse apartment that it had agreed, pre-construction, to purchase were not met by the apartment as built. The question is whether plaintiff is left with any legal recourse, in view of the provisions of the purchase agreements, offering plan, and construction plans that defendants rely on in their current dismissal motion.

On a previous appeal, this Court modified the dismissal of plaintiff's original complaint, reinstating a cause of action for breach of contract (see 79 AD3d 587 [2010]). We are now asked to address the propriety of the motion court's subsequent dismissal of both a new complaint served by plaintiff against the same defendants in a second action and an amended complaint plaintiff served in the first action in the wake of our reinstatement of a portion of the first complaint. FACTUAL AND PROCEDURAL HISTORY The First Action

Defendant CPS 1 Realty LP was the original sponsor of a condominium offering plan, dated December 7, 2005, for the sale of luxury residential condominium units at the Plaza Hotel in Manhattan, and defendant Plaza Residential Owner LP took over as sponsor in April 2006; both defendants are allegedly wholly owned by defendant El-Ad Properties NY LLC (those three defendants will be referred to collectively as Sponsor). Defendant Stribling Marketing Associates LLC was the selling agent under the condominium offering plan.

In August 2007, plaintiff, The Plaza PH2001 LLC, entered into two purchase agreements: one for a planned penthouse unit, at a price of $31 million, and the other for a smaller unit, apartment 1602, to be used for the household help employed in the penthouse residence.

When plaintiff's representative was permitted to see the nearly completed penthouse in May 2008, the penthouse was different from the unit plaintiff had expected. Instead of a large, light and airy expanse of open living space with floor-to-ceiling 11-foot-high windows providing expansive views of Central Park, plaintiff found a living area broken up by several large columns that also blocked the view, with small, three-foot-tall windows beginning three feet from the floor and ending at the six-foot line where the sloped skylights in the ceiling began, and a cramped feel to the room due to the low height at which the ceiling and skylights met the wall and windows. Instead of an open, light kitchen space with four large windows and a moderate-sized kitchen island surrounded by sufficient floor space, plaintiff found the kitchen floor space largely taken up by an excessively large island, and an obtrusive, steeply pitched ceiling ending at a height of six feet, which, as in the living room, gave a cramped feel to the breakfast area; in addition, the kitchen had only two small windows instead of four large ones, drastically diminishing the expected view.

Plaintiff also alleged that while the plans had showed the exterior wall of the penthouse as continuous with that of the lower floors, the exterior wall as constructed was set back approximately three feet, and a drainage grate not shown in any plans had been situated directly outside the exterior wall, below the living room and kitchen windows, inside a three-foot ledge. Based on these alleged changes to the penthouse as constructed, plaintiff first sought rescission of the contracts, then commenced this action.

The original complaint, the subject of the previous appeal, had asserted causes of action for breach of the purchase agreements and fraud, and sought rescission, return of the down payments and legal fees. The allegations included the failure to construct the penthouse in accordance with the plans, model or representations relating to such aspects of the units as room size, ceiling height, number and size of windows, layout, and other design details. Plaintiff also alleged that defendants deliberately failed to provide notice of the changes made, in an effort to deprive plaintiff of its right and ability to rescind the purchase agreements. The cause of action asserted against Stribling Marketing Associates LLC claimed fraudulent ...


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