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Bellstell 7 Park Avenue LLC v. Seven Park Avenue Corp.

Supreme Court, New York County

December 23, 2019

Bellstell 7 Park Avenue LLC, Plaintiff,
v.
Seven Park Avenue Corp., Defendant.

          For Plaintiff: Ortoli Rosenstadt, LLP, New York, NY (Marc Gottlieb of counsel).

          For Defendant: Boyd Richards Parker & Colonnelli, PL, New York, NY (Bryan Mazzola of counsel).

          Gerald Lebovits, J.

         The following e-filed documents, listed by NYSCEF document number (Motion 001) 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 52, 57, 58, 59, 60, 61, 62, 63, 64, 65, 67 were read on this motion for DECLARATORY JUDGMENT

         The following e-filed documents, listed by NYSCEF document number (Motion 002) 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 53, 54, 55, 56, 66, 68 were read on this motion for SUMMARY JUDGMENT

         This case concerns the legal status of shares in a cooperative apartment building located at 7 Park Avenue in New York County. Plaintiff, Bellstell 7 Park Avenue, L.L.C. (Belstell), holds all the unsold shares in that building. Bellstell seeks a declaration that defendant, Seven Park Avenue Corporation, impermissibly determined that Bellstell had lost its unsold-shareholder rights with respect to one of the apartments that Bellstell owns in the building.

         Belstell now moves for summary judgment under CPLR 3212 on its claim for declaratory relief (motion sequence 001). Instead of cross-moving for summary judgment, Seven Park Avenue filed its own, separate motion for summary judgment (motion sequence 002), seeking to dismiss Belstell's complaint and to declare that Belstell no longer enjoys unsold-shareholder rights with respect to the apartment at issue.

         Motion sequences 001 and 002 are consolidated here for disposition.

         BACKGROUND

         A. The Definition and Treatment of "Unsold Shares" in the Cooperative

         The building at issue in this case was converted into a cooperative building by its then- owner, Seven Park Associates, beginning in 1982. Most of the shares in the cooperative were subscribed before the closing date of the conversion offering plan. The offering plan treats those shares that remained unsubscribed as of the closing date as "unsold shares."

         As relevant here, once sold by the co-op sponsor (here, Seven Park Associates) to one or more individuals under certain requirements of the offering plan, a block of unsold shares "retain[s] their character as such (regardless of transfer) until... the holder of such shares (or a member of his family) becomes a bona fide occupant of the apartment" to which the shares are allocated. (See Proprietary Lease, NYSCEF No. 58, at 31 [ 38 [b]].)

         Under the uniform co-op lease, the holders of unsold shares enjoy rights in addition to those ordinary shareholders have. Among other things, an apartment lessee who holds a block of unsold shares may sublet the apartment or assign the lease without approval of the coop's board of directors or other shareholders, as would ordinarily be required. Only the building's managing agent's approval is required. (Id. [ 38 [c]].)

         B. The Cooperative ...


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