Damaged Alleged from Water Raining Down from Penthouse Fireplace

This was originally published on the SGR Blog.

Did Condo Unit Owner Have Claim Against Board/Managing Agent?

William Etkin, the owner of a unit at the 500 West 21st Street Condominium, alleged that, beginning in late 2015, not long after purchasing his condominium unit, he noticed a significant smoke condition in his unit and on his floor, which was allegedly emanating from the fireplace in a penthouse unit of the building. Etkin also alleged that, since March 2021, concrete mortar and water had been raining down from the terrace above his unit, causing damage to his terrace. Etkin alleged that he repeatedly notified the Board and Sherwood Residential Management, LLC, the Condo’s Managing Agent, of those issues and that they refused or failed to address them.

Etkin claimed that those matters were the Board’s responsibility under the Condominium By-Laws and Sherwood’s responsibility under the Management Agreement. Etkin further alleged financial improprieties by the Board and Sherwood, who allegedly permitted various expenses to be borne by condo unit owners when they were the responsibility of other parties. The Board and Sherwood moved to dismiss Etkin’s complaint.

The Court was tasked with determining whether, after affording the pleadings a liberal construction and accepting the allegations in the Complaint as true, the facts as alleged fit within any cognizable legal theory. Dismissal was warranted only if the documentary evidence submitted conclusively established a defense to the asserted claims as a matter of law.

The motion to dismiss the first cause of action for derivative breach of contract against Sherwood was denied. Etkin sufficiently alleged the elements of breach of contract and dismissal at the pre-answer motion to dismiss stage would be premature.

The motion to dismiss the 3rd cause of action for derivative breach of contract against the Board was denied. That claim was not refuted by the documentary evidence advanced by the Board and Sherwood. The Declaration, Offering Plan, and Medley contract did not refute Etkin’s claim because there were questions of fact as to the severity of the complained-of conditions, as well as to whom the responsibility belonged to repair.

The motion to dismiss the second and fourth derivative causes of action for breach of fiduciary duty against Sherwood and the Board, respectively, was granted as duplicative of the breach of contract causes of action. Etkin failed to allege a duty owed to him that was independent of the Board or Sherwood’s contractual duties.

The motion to dismiss the fifth cause of action for nuisance against the Board was denied. The elements of private nuisance are (1) an interference substantial in nature, (2) intentional in origin, (3) unreasonable in character, (4) with a person’s property right to use and enjoy land, (5) caused by another’s conduct in acting or failing to act. The elements of nuisance were sufficiently alleged as to both the terrace and the fireplace. There were issues as to whether the interference was substantial, intentional, or unreasonable, but those were questions of fact that were premature to rule upon on a pre-answer motion to dismiss. The documentary evidence did not irrefutably preclude that claim as a matter of law. Etkin did not lack standing for the individual claim because there was a question of fact as to whether a “Residential Limited Common Element” under the Offering Plan was distinguishable from other “common elements” such as hallways.

To the extent the fifth cause of action for nuisance was alleged against Sherwood, the claim was dismissed. A managing agent cannot be liable in tort for any allegation of nonfeasance with a person who is a third party to the management agreement. Etkin alleged only alleges nonfeasance by asserting that Sherwood allowed the smoke infiltration/terrace issues to persist.

The sixth cause of action for constructive eviction was dismissed. Constructive eviction exists where there is a wrongful act by the landlord which deprives the tenant of the beneficial enjoyment/actual possession of the demised premises. Etkin did not allege a landlord/tenant relationship. The cases he cited, purporting to show that a constructive eviction claim may be brought by the owner of real property, all involved co-op ownership, where the plaintiffs owned shares in the corporation and a proprietary lease in the unit. In all events, it was undisputed that Etkin was occupying his unit.

The seventh and eighth causes of action for negligence and gross negligence were dismissed as duplicative of the breach of contract claim. Those causes of action were based on the same allegations as the breach of contract claims. Etkin did not identify a legal duty independent of contractual duties that would support a claim for negligence or gross negligence.

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