This action involves a dispute among the owners of two condominium apartments and the condominium board, regarding renovations to one condominium apartment that allegedly created noise problems and flooding for the other apartment on the floor below. Pursuant to CPLR 3211 (a)(3) and (a)(7) defendants the Board of Managers of CBJE Condominium (the Board), its president, Jay Fitzgerald, and a board member, Joanne Freeman, move to dismiss plaintiffs' verified complaint for lack standing, and for failure to state a cause of action against Joanne Freeman (Motion Seq No. 002). Pursuant to CPLR 3212, these defendants also move for summary judgment [*2]in their favor dismissing the verified complaint as against them, and for summary judgment in their favor on their cross claim against co-defendant Bariman (Motion Seq. No. 003). Plaintiffs cross-move for a default judgment against defendant Nathalie Bariman, and for summary judgment against the remaining defendants. This decision addresses both motions and the cross motion.

The CJBE Condominium is an unincorporated association that owns a condominium building located at 472 Broome Street, New York, New York. The building has five residential units, two commercial units, and common elements. Defendant Nathalie Bariman owns Unit 3, and plaintiffs Jack Barth and Rochelle Gurstein live in Unit 2W, one floor below, partly under Bariman's unit.

It is undisputed that, when Bariman purchased her unit, the Board approved Bariman's request to renovate her unit, and that all of Bariman's renovations were completed in 2000, within six months of the date of purchase. Bariman insisted and represented to the Board that her renovations were minor and non-structual, but plaintiffs contend that she made substantial structural renovations and additions to her unit, without obtaining the necessary permits or filing plans for the plumbing, electrical and other work performed.

From 2001 until 2003, the Board allegedly demanded Bariman to comply with requests for copies of permits for plumbing, electrical, and other work, including inspection reports pertaining to the permits. Bariman again insisted that no permits were required, and maintained that she had met all her responsibilities under the condominium bylaws and New York City codes and regulations.

On May 26, 2004, at plaintiffs' urging, a Department of Buildings (DOB) inspector inspected Bariman's unit, and issued a violation against the building only for work without a permit (see Crisci Affirm., Ex D). Bariman's architect, Thomas Vail, applied for a permit, and Jay Fitzgerald, as the Board president, signed the Owner's statement portion of the application. According to plaintiffs, the application was fraudulent, because the application for the permit allegedly reflected only a small extent of the work that was actually done in Bariman's unit. The parties do not dispute that the Department of Buildings approved the work, and lifted the violation on December 22, 2004.

Nevertheless, plaintiffs and members of the Board continue to dispute over whether Board approval is required for Bariman's renovations. Several board members wanted to lay the matter to rest by voting to approve Bariman's renovations. On May 18, 2005, a notice was circulated for a Board meeting on June 6, 2005, which included a "motion to approve retroactively the work performed in Unit 3" on the meeting agenda (Crisi Affirm., Ex A [Verified Complaint], at Ex J). By letters dated May 20, 2005, Bariman, Fitzgerald, Freeman, and another unit owner, Paul Mashikien, each stated,

"Six months ago, or thereabouts, I already voted to approve the renovations that were completed in the 3rd Floor Unit of CBJE Condominium several years ago. I am writing this letter to clear up any possible confusion and explicitly VOTE BY PROXY my 16.6666% voting shares, once again, in favor of approving the renovations completed to the 3rd Floor Unit. Please accept this vote as restatement of my previous vote in favor of approval of the renovations, as a current vote and a vote at any upcoming Board Meeting of CBJE Condominium"

(Verified Complaint, Ex L). Plaintiffs maintain that the June 6, 2005 meeting was canceled, and that [*3]there is no evidence of any meeting "six months ago" as referenced in the proxy letters. Fitzgerald claims that the formal vote to approve Bariman's renovations occurred in May 2005, by proxy in lieu of a meeting. Plaintiffs contend that such a vote violated the condominium's bylaws.

On November 26, 2005, the art studio and kitchen in plaintiffs' unit were allegedly flooded. Another flood allegedly occurred on March 30, 2006. Plaintiffs maintain that the flooding resulted from improper installation of drainage pipes for a jacuzzi that Bariman installed in a new bathroom added to her unit. According to plaintiffs, the flood from Bariman's unit ruined many of Barth's own original paintings. Plaintiffs further allege that, after being notified of the first flood, the Board took no action to require Bariman to correct the defect in her improperly installed plumbing, and that the second flood caused additional damage to their art studio. Plaintiffs assert that they advised the Board about the floods at the April 2006 meeting, but nothing was done.

Plaintiffs commenced this action on May 22, 2006, asserting five causes of action. According to plaintiffs, the allegedly illegal renovations increased the noise levels inside plaintiffs' unit and caused two floods in November 2005 and March 2006, which damaged plaintiffs' unit, artwork and other personal property. Plaintiffs therefore seek to compel defendant Bariman to restore her apartment to its original physical condition before she made any renovations (i.e., to rip out and restore, or reinstall, flooring, plumbing and other fixtures that she installed in her apartment in 2000), and to compel the Board to take action. Plaintiffs fear that, if the Board does not take action to make Bariman fix her unit, then Bariman will sell her unit and a new owner will do nothing.^[FN1] The verified complaint also asserts fraud against the Board, Fitzgerald, and Freeman, and a cause of action against Bariman sounding in negligence.

By letter dated September 7, 2006 addressed to Fitzgerald and Vail, DOB allegedly revoked the approval(s) and permit(s) issued for the work at 472 Broome Street.

Defendants move to dismiss the verified complaint for lack of standing. By an interim order, the Court converted this motion to dismiss into a motion for summary judgment.

Defendants claim that the Barth Family Trust actually owns Unit 2W, the unit where plaintiffs reside. However, confirmation deeds filed with the City Register mention that Unit 2W was previously owned by Jean Barth and her husband Philip Barth, who were tenants in common (see Berger Affirm. in Further Support, Ex A; Jean Barth Opp. Aff. ¶¶ 3-4). Jean Barth conveyed her 50% interest in the unit to the Barth Family Trust; upon Philip Barth's death, his interest was conveyed by will to his son, plaintiff Jack Barth (see ibid.). Therefore, plaintiffs have standing to maintain this action.

As to the branch of defendants' motion to dismiss the verified complaint as against Joanne Freeman, they argue that the verified complaint, as well as the bill of particulars, does not make any specific allegations with respect to her personally, and that plaintiffs should not have been singled her and Fitzgerald out from the other Board members. However, these arguments are not persuasive. The verified complaint need not specifically name Freeman to state a cause of action against her, inasmuch as the verified complaint alleges actions take by "all defendants."On this motion, [*4]defendants have not met their burden of showing that the causes of action asserted against all defendants, which includes Freeman, are legally insufficient. Therefore, this branch of defendants' motion is denied.

The merits of the causes of action against the Board, Fitzgerald, and Freeman are addressed in the next section (see infra).

Defendants' Motion for Summary Judgment (Seq No. 003)

The standards for summary judgment are well settled.

"[T]he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers. Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action"

Defendants argue that the second and third causes of action should be dismissed, because the Board exercised its business judgment not to take any further action against Bariman after voting to approve her renovations. Defendants assert that there is no basis for the individual liability of Fitzgerald and Freedman, and that the fourth cause of action, for fraud, was inadequately pled.

The second cause of action alleges that the Board and its members breached duties owed to unit owners by: (1) signing an application for a DOB permit for work in Bariman's unit, allegedly with knowledge that information in the application was inaccurate; (2) signing proxies to approve "retroactively" the work in Bariman's unit; (3) failing to obtain plans and specifications for Bariman for the work; and (4) failing to have an architect or engineer review the plans and specifications; (5) failing to investigate the representations of Bariman's architect regarding flooring between plaintiffs' and Bariman's units; (6) failing to take action against Bariman to address issues of design, engineering, and construction that plaintiffs raised, especially after two floods allegedly occurred (see Verified Complaint ¶ 66). The third cause of action alleges that the Board breached its fiduciary, contractual, and statutory duty to unit owners by not taking action against Bariman. Accordingly, both causes of action seek to compel the Board "to take such action as is necessary to comply with the By-laws and laws of the City of New York for doing construction work" (Verified Complaint ¶¶ 67, 74).

"[T]he appropriate standard for judicial review of decisions of boards of managers of residential condominiums and cooperative corporations is analogous to the business judgment rule applied by courts to determine challenges to decisions made by corporate directors'" (Pelton v 77 Park Ave. Condominium, 38 AD3d 1, 8 [1st Dept 2006], citing Levandusky v One Fifth Avenue Apt. Corp., 75 NY2d 530, 540 [1990]). "To trigger further judicial scrutiny, an aggrieved shareholder-tenant must make a showing that the board acted (1) outside the scope of its authority, (2) in a way that did not legitimately further the corporate purpose or (3) in bad faith" (Pelton, 38 AD3d at 9).

Jay Fitzgerald signed Bariman's application for a DOB permit pursuant to Article IV, section [*5]13 of the condominium by-laws. Section 13 clearly states, "[a]ny application to any department of the City of New York or to any governmental authority for a permit to make an addition, alteration or improvement in or to any Unit shall be executed by the Board of Managers only, without however, incurring any liability on the part of the Board of Managers or any of them . . . to any person having any claim for injury to person or damage to property arising therefrom."

Plaintiffs fail to raise a triable issue of fact that signing the application was outside the authority of the Board, or that signing the application did not further the corporate purpose, or was in bad faith. Although plaintiffs insist that Fitzgerald's signature on the DOB application was a representation of the accuracy of the information contained therein, the owner's portion of the DOB application did not require the owner to attest to the accuracy of the application. The Owner's Statements portion of the DOB application, which appears as Exhibit I to the verified complaint, requires the Board to state that it authorized the application to file the application for the work specified, and to make certain certifications about the housing accommodations (see Verified Complaint, Ex I).

With respect to action that plaintiffs believe that the Board should have taken, plaintiffs contend that Bariman violated Article VI, Section 13 of the condominium bylaws, which states, in pertinent part:

"Except as provided below, no Unit Owner shall make any structural addition, alteration or improvement in or to his Unit, or which affects the exterior of the Building or the value of other Units, without prior written consent thereto of the Board of Managers. . . .

In the event the Board of Managers grants its consent, either affirmatively or by its inaction, to any structural addition, alteration or improvement to be made by a Unit Owner, the consent shall provide that any such work shall be at the Unit Owner's sole cost and expense, that work shall be done in accordance with all governmental or quasi-governmental laws, rules, regulations, codes and ordinances. . . .

Non-structural alterations or improvements to Units that do not affect the exterior of the Building or the value of other Units may be made without the prior approval of the Board of Managers."

However, the relevant part of Article VI, Section 13 quoted above draws a distinction between structural and non-structural additions, alterations, and improvements. The former requires board approval; the latter does not. Nothing in Article VI, Section 13 requires a Unit owner to demonstrate to the Board that non-structural alterations and improvements were made in accordance with governmental laws, rules, regulations, codes and ordinances. Therefore, the issue of whether Bariman violated the condominium bylaws depends on whether her renovations are structural or non-structural.

The Board believes that Bariman's renovations did not involve structural alterations, and therefore no Board approval is required (Fitzgerald Aff. ¶ 10). Thomas Vail, a licensed architect [*6]whom Bariman hired to remedy the DOB violation, states that the work in Bariman's unit "in no way involved anything of a structural nature," which would have involved removal or relocation of structural columns (Vail Aff. ¶ 7). According to Vail, a kitchen or bathroom renovation would not be viewed as a structural renovation (Ibid.). With respect to the issue of noise, the Board views this as a question of the sensibilities of the plaintiffs, for Joanne Freeman, who also lives on the second floor, did not experience any increase in noise or sounds from Bariman's unit (Freeman Aff. ¶ 8).

At bottom, plaintiffs disagree with the Board's conclusion that Bariman's work was not structural in nature. Plaintiffs apparently believe the work is structural because of the extent of Bariman's renovations Bariman remodeled her kitchen, apparently installed a new bathroom, changed the flooring and advertised her unit as a "gut renovation." However, plaintiffs' disagreement with the Board's conclusion is not sufficient to overcome its business judgment, especially because plaintiffs have not submitted any opinion from an architect contradicting Vail's opinions.

In sum, plaintiffs fail to raise a triable issue of fact as to whether the Board's decision not to take any further action "has no legitimate relationship to the welfare of the cooperative, deliberately singles out individuals for harmful treatment, is taken without notice or consideration of the relevant facts, or is beyond the scope of the board's authority" (Levandusky, 75 NY2d at 540).

The Board also approved by proxy Bariman's renovations (apparently as a measure to placate plaintiffs), which plaintiffs challenge as invalid. Even if this approval were invalid, the Board's judgment that renovations to Bariman's unit does not require Board approval still stands. Thus, it is not enough for plaintiffs to challenge the regularity of the Board's vote to overcome the Board's business judgment.

The work that plaintiffs wish to be done in Bariman's unit to restore it to its pre-renovation condition is, by definition, not part of the condominium's common elements. Given the Board's good faith determination that the condominium's bylaws were not violated, the Court discerns no basis to compel the Board to perform work in an area that is not part of the condominium's common elements.

Therefore, the second and third causes of action are dismissed.

The fourth cause of action for fraud is also dismissed. Plaintiffs allege that the DOB application was misleading, in that the renovation work was far more extensive than what was shown in the application that the Board signed. The Board also allegedly misled prospective purchasers into believing that Bariman's renovations were approved by the Board, and in compliance with the law. However, as defendants aptly indicate, a cause of action for fraud is not stated because the representations of which plaintiffs complain were made to third parties and not to them, and those representations were relied upon by those third parties and not by plaintiffs (Escoett & Co. v Alexander & Alexander, Inc., 31 AD2d 791, 791 [1st Dept 1969]). Finally, plaintiffs alleged that defendants "fraudulently" signed identical proxies, but this allegation fails to state the elements of fraud with particularity (see CPLR 3016 [b]; Lama Holding Co. v Smith Barney, Inc., 88 NY2d 413 [1996]; New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]; Friedman v Anderson, 23 AD3d 163 [1st Dept 2005]). Plaintiffs' contention appears to be that the vote by proxy was invalid, i.e., without notice to plaintiffs and not taken at a meeting, not that the proxies themselves contained intentional misrepresentations of material fact upon which plaintiffs relied.

Therefore, the fourth cause of action is dismissed. [*7]

Finally, the branch of the Board, Fitzgerald and Freeman's motion for summary judgment on their cross claim against Bariman for indemnification and/or contribution is denied. Because the Court has granted these defendants summary judgment dismissing plaintiffs' causes of action as against them, they are not entitled to common-law indemnification against Bariman. To the extent that contractual indemnification is sought, these defendants have not provided proof of the additional mailing required under CPLR 3215 (g) (3) (i).

Plaintiffs' Cross Motion for Default Judgment Against Bariman

According to the affidavit of service, Bariman was personally served with the summons and verified complaint on May 23, 2006. Bariman failed to answer the verified complaint or otherwise appear in the action. The co-defendants claim that Bariman left the country and now resides in Germany.

Plaintiffs cross-move for a default judgment against Bariman, but do not specify the causes of action for which default judgment is sought. The verified complaint alleges five causes of action. The first three causes of action appear to seek relief against Bariman, because they seek, among other things, an order compelling Bariman to restore her unit to the physical condition it was in prior to her renovations (see Verified Complaint ¶¶ 62, 67, 74). However, plaintiffs clarify that the first cause of action is only against Bariman, and that the second and third causes of action are asserted against the Board. Berger Opp. Affirm. ¶ 3. The last cause of action, against Bariman only, sounds in negligence. Accordingly, plaintiffs' cross motion seeks a default judgment on the first and fifth causes of action of the verified complaint.

A. Injunctive Relief

Pursuant to the Condominium Act, an aggrieved unit owner may bring an action seeking injunctive relief and damages against another unit owner who fails to "comply strictly with the [condominium] by-laws and with rules, regulations, resolutions and decisions adopted pursuant thereto" (Real Property Law § 339-j). Here, plaintiffs contend that Bariman violated Article VI, Section 13 of the condominium bylaws. However, as discussed above in the context of defendants' motion for summary judgment, the Board determined, in its business judgment, that Bariman did not violate Article VI, Section 13 of the bylaws. Therefore, plaintiffs have not demonstrated a prima facie case of liability against Bariman for injunctive relief pursuant to Real Property Law § 339-j.

B. Negligence

Plaintiffs allege that Bariman installed a second bathroom with a jacuzzi, which flooded and caused damage to plaintiffs' unit in November 2005 and March 2006 (Verified Complaint ¶¶ 44, 60-61). "[U]pon information and belief, the pipes did not drain properly and were not properly pitched" (Verified Complaint ¶ 44). Bariman allegedly removed the flooring and soundproofing in the floor, creating "excessive transmission of noise from merely walking on the floor" (Verified Complaint ¶ 87).

Plaintiffs do not meet their burden on this motion to establish a prima facie case of Bariman's liability under a theory of negligence. The moving papers to plaintiffs' cross motion do not indicate the manner in which Bariman acted negligently, or how the alleged negligence was a substantial factor in causing plaintiffs' property damage. Insofar as the cause of the floods was alleged upon "information and belief," the verified complaint is insufficient to support the entry of a default judgment (see Henriquez v Purins, 245 AD2d 337, 338 [2d Dept 1997]). Although plaintiffs allege that the flooring renovations created "excessive" noise, the moving papers are bereft of any showing [*8]that, under a theory of negligence, the level of noise either constitutes a breach of any duty of care owed to plaintiffs, or is of a level that could cause plaintiffs physical harm.

DOB's apparent revocation is not based on any finding that Bariman's renovations were negligently performed. DOB revoked its approval and permit based on receiving insufficient information in response to a notification of its intent to revoke (see Jean Barth Aff., Ex A). An excerpt of the Notice of Objections, dated July 7, 2006, to Bariman's permit application indicates that DOB required more applications, and clarification/correction of handwritten mark-up plans (see Berger Affirm. in Further Support of Motion, Ex A). Thus, DOB's apparent revocation of permits issued for Bariman's renovations is irrelevant to the issue of Bariman's alleged negligence.

Therefore, plaintiffs' cross motion for a default judgment against Bariman is denied, without prejudice to another motion for a default judgment as to Bariman's alleged negligence.

Accordingly, it is hereby

ORDERED that the motion to dismiss, converted to a motion for summary judgment, by defendants the Board of Managers of CBJE Condominium, Jay Fitzgerald and Joanne Freeman (Motion Seq. No. 002) is denied; and it is further

ORDERED that plaintiffs' cross motion for a default judgment against defendant Nathalie Bariman is denied, without prejudice; and it is further

ORDERED that the motion for summary judgment by defendants the Board of Managers of CBJE Condominium, Jay Fitzgerald and Joanne Freeman (Motion Seq. No. 003) is granted to the extent that the second, third, and fourth causes of action are dismissed, and the motion is otherwise denied; and it is further

ORDERED that the remainder of the action shall continue as to the first and fifth causes of action against Bariman, and as to the cross claim of defendants Board of Managers of CBJE Condominium, Jay Fitzgerald and Joanne Freeman against Bariman.

Dated: 10/1/07

New York, New YorkENTER:

/s

J.S.C.