Board of Managers of 325 Fifth Avenue Condominium, et al., Plaintiffs-Respondents-Appellants,
Continental Residential Holdings LLC, et al., Defendants-Appellants-Respondents, Douglaston Development LLC, et al., Defendants-Respondents, Wolf Haldenstein Adler Freeman & Herz LLP, et al., Defendants.
Korins, LLP, New York (Mark Walfish of counsel), for
Continental Residential Holdings LLC, appellant-respondent,
and Douglaston Development LLC, 325 Fifth Ave, LLC, 325 Fifth
Avenue Commercial LLC, 325 Fifth Avenue Investors, LLC,
Continental Properties LLC, Clinton Management LLC, Jelb 5th
Avenue LLC, Mark Fisch, Steven Fisch, Steven R. Charno,
Jeffrey E. Levine, J.E. Levine Builder Inc, Wolf Haldenstein
Adler Freeman & Herz LLP, FS Project Management, LLC, and
First Service Residential New York, LLC, respondents.
& O'Neill, LLP, New York (Kevin O'Neill of
counsel), for Cantor Seinuk Group, P.C., WSP Cantor Seinuk
and Silvian Marcus, appellants-respondents.
Kasowitz, Benson, Torres & Friedman LLP, New York
(Michael J. Bowe and Lauren Tabaksblat of counsel), for the
Board of Managers of 325 Fifth Avenue Condominium and 325
Fifth Avenue Condominium, respondents-appellants.
Sweeny, J.P., Andrias, Moskowitz, Kahn, Gesmer, JJ.
order, Supreme Court, New York County (Kelly O'Neill
Levy, J.), entered on or about July 28, 2016, which, to the
extent appealed and cross-appealed from as limited by the
briefs, denied the motion of defendant Continental
Residential Holdings, LLC (Sponsor) to dismiss the first,
second, sixth, and fifteenth causes of action, denied the
motion of defendants WSP Cantor Seinuk Group, Cantor Seinuk
Group, P.C., and Silvian Marcus, P.E. (the Cantor Seinuk
Defendants) to dismiss the seventh cause of action, granted
the motion of defendants Continental Properties, LLC,
Douglaston Development LLC, 325 Fifth Avenue LLC, 325 Fifth
Avenue Investors LLC, Clinton Management LLC, JELB 5th Avenue
LLC, Mark Fisch, Steven Fisch, Steven R. Charno, Jeffrey E.
Levine, and J.E. Levine Building Inc. d/b/a Levine Builders
(the Sponsor-Related Defendants) to dismiss the first,
second, and sixth causes of action, and granted
defendants' motions to dismiss the fourth and fifth
causes of action, unanimously modified, on the law, to grant
(1) the Sponsor Defendants'  and WSP Cantor
Seinuk's motions to dismiss all balcony-related claims
against them based on the release, (2) Sponsor's motion
to dismiss the sixth and fifteenth causes of action
(fraudulent inducement of the release and declaratory
judgment, respectively), and (3) the Cantor Seinuk
Defendants' motion to dismiss the seventh cause of action
(aiding and abetting fraudulent inducement of the release),
and otherwise affirmed, without costs. The Clerk is directed
to enter judgment dismissing the complaint as to the Cantor
Seinuk Defendants .
Sponsor Defendants contend that all claims against them
should be dismissed because the notice attached to the
summons failed to comply with CPLR 305(b). This argument is
unavailing (see Pilla v La Flor De Mayo Express, 191
A.D.2d 224 [1st Dept 1993]).
2011, plaintiff board executed a release that released
Sponsor, Douglaston Development, 325 Fifth Avenue LLC, 325
Fifth Avenue Commercial, 325 Fifth Avenue Investors, Clinton
Management, JELB, the Fisches, Mr. Levine, Levine Builders,
WSP Cantor Seinuk, and their "heirs, executors,
administrators, successors and assigns" from all claims
it ever had or thereafter might have against the releasees
for anything "relating to or arising solely from the
construction, design, manufacture, maintenance, use or abuse,
[or] installation of the balconies, balcony glass, railing
and support frames/attachments, and the connection of the
foregoing assemblies to the building structure."
plaintiffs are trying to hold the Sponsor-Related Defendants
liable as alter egos of the Sponsor, the release applies to
them even though it does not mention all of them (see
Bailon v Guane Coach Corp., 78 A.D.3d 608');">78 A.D.3d 608 [1st Dept
2010]). However, plaintiffs do not assert an alter ego theory
against the Cantor Seinuk Defendants, and Cantor Seinuk Group
and Marcus are not WSP Cantor Seinuk's heirs, executors,
administrators, successors, or assigns.
release bars plaintiffs' balcony-related claims against
the Sponsor Defendants and WSP Cantor Seinuk, even though
plaintiffs allege that it was fraudulently induced, as they
do not allege "a separate fraud from the subject of the
release" (Centro Empresarial Cempresa S.A. v
América Móvil, S.A.B. de C.V., 17 N.Y.3d
269, 276 ; see also Pappas v Tzolis, 20 N.Y.3d
228, 233 ).
motion court properly dismissed the sixth cause of action
(fraudulent inducement of the release) as against the
Sponsor-Related Defendants, but it should also have dismissed
it as against Sponsor for lack of reasonable reliance
(see e.g. Arfa v Zamir, 76 A.D.3d 56, 59 [1st Dept
2010], affd 17 N.Y.3d 737');">17 N.Y.3d 737 ). Unlike the
plaintiff in TIAA Global Invs., LLC v One Astoria Sq.
LLC (127 A.D.3d 75');">127 A.D.3d 75 [1st Dept 2015]), plaintiffs were in
possession of the building. Furthermore, an adversarial
relationship "negates as a matter of law any inference
that" sophisticated business people are relying on their
adversary's representation (Arfa, 76 A.D.3d at
60 [brackets and internal quotation marks omitted]). As far
back as October 2009, plaintiff board, through counsel,
placed defendants on notice that it might sue them.
to plaintiffs' claim, the June 2010 letter from
Marcus/WSP Cantor Seinuk to nonparty John Foley, which the
complaint alleges was going to be delivered to nonparty New
York City Department of Buildings, does not satisfy the
requirement of reliance. It is not like the representations
and warranties in a loan agreement in DDJ Mgt., LLC v
Rhone Group L.L.C. (15 N.Y.3d 147');">15 N.Y.3d 147 ). The May 2011
release is not conditioned on the truth of the statements in
the June 2010 letter.
light of the above, it is unnecessary to reach the Cantor
Seinuk Defendants' argument that the letter constituted
nonactionable opinion. Their argument that plaintiffs
ratified the release is improperly raised for the first time
in a footnote in their reply brief.
we are dismissing the sixth cause of action (fraudulent
inducement of the release) against all Sponsor Defendants,
the seventh cause of action (against the Cantor Seinuk
Defendants for aiding and abetting the Sponsor
Defendants' fraudulent inducement of the release) must
also be dismissed (see e.g. Oster v Kirschner, 77
A.D.3d 51, 55 [1st Dept 2010] [element of aiding and abetting
fraud is "the existence of the underlying fraud"]).
contend that the first and second causes of action (breach of
contract) should be reinstated against the Sponsor-Related
Defendants. This argument is unavailing. "A member of a
limited liability company cannot be held liable for the
company's obligations by virtue of his or her status as a
member thereof" (Matias v Mondo Props., LLC, 43
A.D.3d 367, 367-368 [1st Dept 2007] [brackets and internal
quotation marks ...