| Black v 22321 Owners Corp. |
| 2011 NY Slip Op 50487(U) [31 Misc 3d 1204(A)] |
| Decided on February 28, 2011 |
| Supreme Court, New York County |
| Goodman, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Samantha Black and
THE HENRY CLAY BLACK AND MOIRA BLACK REVOCABLE TRUST, Plaintiffs,
against 22321 Owners Corp., WOLFF MGT INC. d/b/a WOLFF MANAGEMENT, ANTHONY WOLFF, PAMELA WOLFF, HARVEY MAR, JAMES PERICONI, ADAM HURWITZ, LISA MILLER, ANDREW LEON, "JOHN DOE" AND "JANE DOE," Defendants. |
BACKGROUND
Defendants 22321 Owners Corp., Wolff Mgt Inc d/b/a/ Wolff Management, Anthony Wolff,
Pamela Wolff, Harvey Mar, James Periconi, Adam Hurwitz, Lisa Miller, Andrew Leon, "John
Doe" and "Jane Doe" move, pursuant to CPLR 3211 (a) (7), to (i) dismiss the Complaint as
against Wolff Mgt., Inc; (Wolff Defendants), (ii) dismiss the Complaint as against the individual
Board Members, and (iii) strike Plaintiffs' punitive damage claims from the Complaint.
This is a dispute arising out of the renovation of an apartment in a cooperative
building (Co-op) located in the Chelsea area of Manhattan. Plaintiffs bring this action against the
Co-op, its Board Members, its Management Corp., and the managing agent, alleging that they
breached their obligations under the Co-op's proprietary lease by withholding consent and
imposing unreasonable demands and fees upon Plaintiffs in connection with Plaintiffs'
application for renovations in their apartment. Plaintiffs allege that the Defendants acted in bad
faith and breached their fiduciary duty to Plaintiffs.
Black and the Trust (collectively "Plaintiffs") are the shareholders and proprietary Lessees of Apartment 5E of 231 West 21st Street, New York, New York. The Defendant 22321 Owners Corp. (the "Co-op") is the owner of the building and governs the building as a cooperative scheme through a board of directors. Individual Defendants Harvey Mar, James Periconi, Adam Hurwitz, Lisa Miller and Andrew Leon are members of the Board of Directors. Defendant Anthony Wolff is President of the Board of Directors. Wolff Mgmt., Inc. is a domestic business Corporation that manages the building. Mr. Wolff is also the President of Wolff Mgt., Inc. Defendant Pamela Wolff is an employee of Wolff Mgt., Inc. Defendants Anthony Wolff and Pamela Wolff are husband and wife.
The Verified Complaint dated April 8, 2009 alleges that in or about September 2005, Plaintiffs wished to make renovations to the kitchen, bathroom, and other areas of the apartment. Plaintiffs began the process of gathering documents for submission of an "alteration application" to the Co-op. On or about January 9, 2006, the demolition work in the apartment began. A little over a week later, Defendant Anthony Wolff accused Plaintiff Samantha Black of violating the Co-op's rules and informed her that she could not continue with the renovation project. Black contends that she begged Wolff to allow her to remove the debris but Wolff refused, insisting that no work could resume. Plaintiffs allege that Wolff thereafter continued with "malicious" and "harassing" behavior, designed to delay the process of getting approval for the renovation project. On or about February 24, 2006, a new application was re-submitted by Black. Again, Plaintiffs contend Wolff persisted with his delay tactics including requiring even more approvals, which Plaintiffs believed was unreasonable. At the April 27, 2006 Board meeting, Black submitted a timeline and supporting documents showing the rest of the Board of Directors the "distressing" series of events which had delayed the resumption of the renovation project. By July 21, 2006, Black wrote to the Board asking that they intervene to make the process fair to Plaintiffs. Despite this plea, on August 6, 2006, Wolff wrote back to the Plaintiffs asserting that the Board had authorized him to continue dealing with the Plaintiffs in terms of the renovation project.
Plaintiffs claim that during the time period between September 2005 and February 2009,
Defendants, including the Board Members individually, breached their obligations pursuant to
the proprietary lease by withholding consent to any renovation and thereby preventing Plaintiffs
from making the renovations to the apartment. It is also charged that Defendant Anthony Wolff,
during this same time period, made unreasonable demands and requested unnecessary fees in
connection with the renovation project. It is further alleged that in or about March 2007,
Defendants and/or their agents "broke in" and entered Plaintiffs' Apartment after Defendant
Board Member Harvey Mar advised the Board of harmful lead dust in the Apartment from the
debris that had been left there a year earlier. Plaintiffs allege that the Defendants altered Board
meeting minutes in an effort to justify the "break-in" by making it look like an emergency
situation.
Based on these factual allegations, the Verified Complaint asserts the following 11
causes of action: (1) Declaratory Judgment that Defendants are in default, violation and breach of
their contractual obligations (2) Declaratory Judgment that the alteration project meets all of he
reasonable criteria for approval of the Board and that the alteration application must be approved
by the Board without further delay (3)Mandatory Permanent Injunction that Defendants should
be compelled to approve Plaintiffs' alteration application (4) Preliminary Injunction enjoining
Defendants from denying the approval of Plaintiffs' alteration project (5) Preliminary injunction
enjoining Defendants from commencing a nonpayment summary proceeding against them (6)
Breach of Fiduciary Duty as against the Board and individual Defendants (7) Breach of Fiduciary
Duty as against individual Defendants (8) Intentional Tort as against Anthony Wolff (9) Actual
and Constructive Eviction against Defendants (10) Damages (11) Attorneys fees.
DISCUSSION
Standards for Dismissal Under CPLR 3211(a)
CPLR 3211 (a), "Motion to Dismiss cause of action," states that:
(a) party may move for judgment dismissing one or more causes of action asserted
against him on the ground that
(7) the pleading fails to state a cause of action� ."
[*2]
As stated in Leon v. Martinez, 84 NY2d
83 (1994), "On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a
liberal construction (see, CPLR 3026). We accept the facts as alleged in the complaint as
true, accord plaintiffs the benefit of every possible favorable inference, and determine only
whether the facts as alleged fit within any cognizable legal theory (Marone v Marone, 50
NY2d 481, 484; Rovello v Orofino Realty Co., 40 NY2d 633, 634), a dismissal is
warranted only if the documentary evidence submitted conclusively establishes a defense to the
asserted claims as a matter of law. (see, e.g., Heaney v Purdy; 29 NY2d 157).
In assessing a motion under CPLR 3211 (a) (7), a court may freely consider
affidavits submitted by the plaintiff to remedy any defects in the complaint.
(Rovello v Orofino Realty Co. , 40 NY2d 633, 635) and "the criterion is whether the
proponent of the pleading has a cause of action, not whether he has stated one"
(Guggenheimer v Ginzburg, 43 NY2d 268, 275; Rovello v. Orofino Realty Co., supra
at 635).
Breach of Fiduciary Duty Against Wolff Mgt., Inc. and Wolff Defendants:
Anthony Wolff and Pamela Wolff
In order to determine whether Plaintiffs have sufficiently pleaded a Cause of
Action for Breach of Fiduciary Duty against Wolff Mgt, Inc., it is important for this Court to
examine the various roles and job descriptions of Defendants Anthony and Pamela Wolff.
According to Plaintiffs' Verified Complaint, Mr. Wolff is the President of Defendant, 22321
Owners Corp ("Co-op") and Chairman of the Board of Directors of the Co-op. He is also the sole
owner and President of Defendant Wolff Mgt., Inc. At all times, Defendant Wolff has managed
the building where Plaintiffs reside. His wife, Pamela Wolff, is employed by Wolff management
and was the registered managing agent for the Building. In their Sixth Cause of Action, the
Plaintiffs allege that the Managing Agent Defendants breached their fiduciary duties to Plaintiff
by committing various acts of bad faith. According to Plaintiff Black's Affidavit, these acts
include but are not limited to the "unauthorized break-in to the apartment", improper charging of
a fee for "the supervision and management of the environmental clean up and testing" as well as
"harassing and obstructionist behavior of Anthony Wolff."
Plaintiffs have sufficiently pleaded in the Complaint as well as in the Affidavit of
Samantha Black, the allegations that Anthony Wolff acted in "retaliation against Plaintiffs in the
form of bad faith and repeated denials of revision of the Alteration Agreement." As President of
the Owners Corp., and Chairman of the Board of Directors of the Cooperative, there is sufficient
evidence to support the claims of Breach of Fiduciary Duty and Intentional Tort. In fact,
Defendants' Reply Affirmation states, "Concededly, the allegations against Mr. Wolff (which
ultimately will be proven untrue) satisfy Plaintiffs' pleading obligation." (paragraph 5). The issue
presented is whether, the Sixth Cause of Action for Breach of Fiduciary duty against Wolff Mgt,
Inc., which is owned and operated by Anthony Wolff and Pamela Wolff, should be dismissed.
A fiduciary, in the context of property management, is "one who transacts business, or who
handles money or property, which is not his (or her) own or for his (or her) own benefit, but for
the benefit of another person, as to whom he (or she) stands in a relation implying and
necessitating great confidence and trust on the one part and a high degree of good faith on the
other part" (Board of Mgrs of Fairways at N. Hills Condominium v Fairway at N. Hills,
193 AD2d 322, 325 (1993).
The Court of Appeals has determined that the managing agent is a fiduciary as to
the condominium but not as to the individual unit owners. (Caprer v. Nussbaum, 36 AD3d
176, [*3]825 NY S. 2d 55 (2nd Dept 2006). Defendants,
therefore allege that as a result, there can be no cause of action for Breach of Fiduciary duty on
the part of Wolff Management. However, in Caprer, where the principals of the
managing agent were also principals of the sponsor and board members, the court concluded that
"in the particular circumstances presented here, the absence of a fiduciary duty flowing directly
from the managing agent to the unit owners does not mean that the plaintiffs' breach of fiduciary
duty claims insofar as asserted against the managing agents should have been dismissed�there is
no dispute that (defendants) as members of the board, owe a fiduciary duty to the individual unit
owners in their management of the common property." Id at 193. Under Caprer,
a board member's fiduciary responsibility does not end even when this board member is
performing duties in another capacity, such as managing the property, the situation here.
Mr. Wolff , as sole owner of Wolff Mgt., Inc. and Chairman of the Board of
Directors, "wears two hats." In the former capacity, the courts have concluded that no fiduciary
relationship is recognized to unit owners, however, in the latter, a fiduciary duty is present.
Plaintiffs have further alleged that Defendant Wolff Management charged improper management
fees and would not allow the renovation project to continue unless these fees were paid.
(Affidavit of Samantha Black paragraph 94-96). It is indistinguishable in which "role" the alleged
bad faith and tortious behavior occurred. As a board member, Mr. Wolff is required to maintain
his fiduciary responsibility to the individual unit owners even while performing his duties as
property manager. Moreover, the pleadings suggest that Pamela Wolff had knowledge and
assisted her husband in committing these torts. Taking these facts to be true, it would be
premature of this Court to dismiss the Sixth Cause of action against Pamela Wolff without
proper discovery on this issue. Additionally, evidence in the Complaint supports the fact that
Wolff Management can be considered a mere alter ego for Mr. and Ms. Wolff. (See Caprer).
As such, the claim as to whether they "have funneled the proceeds of their wrongdoing to
their apartment based management company" thereby breaching their fiduciary duty, is
sufficiently pleaded. The Plaintiffs' complaint raises triable issues of fact as to whether Wolff
Mgt , Inc. and the Wolff Defendants have breached a fiduciary duty to Plaintiffs. Therefore,
Defendants Motion to Dismiss the Sixth Cause of Action is denied.
Breach of Fiduciary Duty against Individual Board Members
On the claim of whether the Board of Directors should be held individually
liable
for Breach of Fiduciary Duty, this Court has dissected Plaintiffs' various arguments
in both the Complaint and the Affidavit of Plaintiff Black . Plaintiffs argue that
Defendant Board of Directors had knowledge of Mr. Wolff's bad faith and tortious
behavior and they enabled Mr. Wolff, by both their actions and inactions. As
evidence, Plaintiffs allege Defendants ordered the "break-in" of Plaintiffs' Apartment
without justification for purposes of harassment. In addition, it is claimed that
Defendant
Board members forged the board minutes of 3/13/2007 in an effort to cover up the
"break-in." Lastly, Plaintiff's state that Defendant Board of Directors engaged in self-
dealing by ordering Plaintiffs to pay for Board Member Mar's lead remediation when
the lead came from Mr. Mar's own apartment.
The Court of Appeals established a standard of review analogous to the corporate
business judgment rule for a shareholder-tenant challenge to a decision of a
residential
cooperative corporation. Matter of Levandusky v One Fifth Ave. Apt. Corp.,
75 NY2d
530, 537-38, 553 N.E.2d 1317, 554 N.Y.S. 2d 807 (1990). Thus, to withstand
dismissal of their [*4]Sixth and Seventh causes of action, the
Defendants must allege facts showing that the Board of Directors or any individual members
acted outside the scope of their authority, or in a way that did not legitimately further the
cooperative's legitimate
purpose, or in bad faith. 40 West 67th St. Corp. v Pullman, 100 NY2d 147,
153, 790
N.E.2d 1174, 760 N.Y.S.2d 745 (2003).
Plaintiffs contend that the board members are not insulated from individual liability under
the business judgment rule as a result of their bad faith. When dealing with individual liability,
courts will dismiss complaints that fail to allege with specificity independent tortious acts by the
board members. (see , e.g. Pelton v 77 Park Avenue Condominium 38 Ad3d1 (1st
Dept. 2006). Plaintiffs are required to plead with specificity independent tortious acts by each
individual defendant in order to overcome the public policy that supports the business judgment
rule (see Murtha v Yonkers Child Care Assn., 45 NY2d 913 (1978), Pelton v 77 Park Avenue Condominium
38 AD3d 1, 825 N.Y.S.2d 28 (2006). Konrad v 136 E. 64th St. Corp., 246 Ad2d
324 (1998). In Konrad, where the complaint failed to allege any independent wrongful
conduct by an individual director of a cooperative, the Court stated (at 326):
"That the cooperative corporation's board of directors may have taken action that
deliberately singles our individuals for harmful treatment' does not, ipso facto, expose the
individual board members to liability. The proposed cause of action ascribes no independent
tortious conduct to any individual director, and plaintiff's proposed�cause of action is therefore
deficient as a matter of law" (citation omitted).
Plaintiffs' contend that the following evidence is illustrative of their sufficiency of
pleading on the issue of defendants' knowledge of Mr. Wolff's alleged bad faith and tortious
behavior:
(1) At the April 27, 2006 board meeting, Black submitted a timeline and supporting
documents showing the rest of the board the distressing series of events which had delayed the
continuation of the alteration project.
(2) On July 21, 2006, after extensive research, Black wrote to the board asking that
they intervene to make the process fair.
(3) Despite this plea on August 6, 2006, Wolff wrote back to the Plaintiffs asserting
that the board had authorized him to continue dealing with the Plaintiffs in terms of the alteration
project.
Plaintiffs, in their opposition papers, rely on Kleinerman v. 245 East 87 Tenants
Corp 74 AD3d 448 (2010) to argue that the Board Member's delegation
of duty to Wolff, despite having knowledge of Wolff's ongoing tortious conduct toward
Plaintiffs, sufficiently alleges the requisite independent tortious conduct on the part of the
individual board members to preclude dismissal of the Sixth and Seventh causes of action. In
Kleinerman, the tenant shareholders sufficiently alleged a claim for breach of fiduciary
duty against the cooperative and the individual board members. The complaint demonstrated
there was actual knowledge of their superintendent's purported extortionate demands from the
shareholders and substantial assistance of those demands by issuing a stop-work order once
plaintiffs discontinued payments to the superintendent. However, Kleinerman does not
apply to the instant case for the following reasons. The Kleinerman Court concluded that
Plaintiff made "assertions that indicated actual knowledge" by board members of
"superintendent's purported extortionate demands". These assertions are a far cry from this
present case where there is no specific allegations that each individual defendant had actual
knowledge of any alleged "harassment or malicious conduct" of [*5]Anthony Wolff. In fact, Plaintiffs' state in the opposition papers that
the "Board members had knowledge or should have had knowledge (emphasis
supplied) of Mr. Wolff's tortious behavior (p.8), unlike "actual knowledge" which was pleaded in
Kleinerman. Furthermore, the court found sufficient assertions that board members in
Kleinerman had actual knowledge of criminal behavior (emphasis supplied) and
sanctioned that conduct by approving the stop-work order. Here, Plaintiffs have failed to plead
with specificity that the individual board members have acted in a matter that sanctioned the
alleged "tortious" conduct of Anthony Wolff. The only allegations made by Plaintiffs are that the
Board was given a time-line and documents detailing the delays of the renovation project and the
Board failed to intervene or go against Mr. Wolff. There is no showing of any independent
tortious conduct ascribed to any individual director. Furthermore, In Meadow Lane Equities Corp v Hill, 63
AD3d 699, 880 NY2d 338 ( 2ND Dept. 2009), a case with similar allegations, the Court
dismissed causes of action alleging that the cooperative's board of directors breached its fiduciary
duty to Plaintiffs shareholders through various forms of mistreatment, including unequal
treatment and domination and control by a board president. The court in Meadow
concluded thattheindividual directors and officers may not be subject to liability absent
allegation that they committed separate tortious acts andthe plaintiffs failed to plead that the
president of the board acted tortiously other than in her capacity as a member of Board. (Id
at 701).
It is also alleged in the Black Affidavit that the individual Board members should
be held liable because of their approval of several "break-ins" to plaintiffs apartment
in order to conduct a lead testing and clean-up project. Plaintiffs contend in the Affidavit that
these Defendants "concocted" the lead "emergency" that led to the "break-in" of plaintiffs
apartment to create a hurdle for Plaintiff to overcome before approval of the renovation project
would be given. Plaintiffs state that Defendants used "exigent circumstances as a pretext-in bad
faith- in order to (i) remove the debris in the manner of their own choosing and (ii) victimize and
humiliate Plaintiffs yet again. Plaintiffs in their opposition papers claim that the board members
justification of exigent circumstances was "disingenuous" since they had knowledge that the
debris lay dormant in the Plaintiffs apartment for over a year and yet did nothing about it. It is
alleged that the Board's decision to "break into" Plaintiffs apartment-remove the debris, order
lead testing and remediation for plaintiff's apartment and a board members apartment, and bill all
costs of such to plaintiffs-was motivated by a desire to further punish Plaintiffs and to further
gain financially at Plaintiffs' expense. From both the minutes of the board meeting of March 13,
2007 and from the Black Affidavit, it is determined that "on March 13, 2007, the 4E Shareholder
(Defendant Harvey Mar) advised the Board that debris continues to infiltrate from 5E into the
apartment below." These minutes indicate that based upon the information from Shareholder
Mar, the Board directed management "without delay", to order the appropriate environmental
tests. According to Plaintiffs Affidavit and opposition papers Defendants made no attempt to
contact Plaintiff by cell phone regarding this "emergency."
Under Levandusky, the exercise of a Board's power for the common and
general interests of the corporation may not be questioned, although the results show that what
they did was "unwise or inexpedient" (Id at537-538). The choice of the board to not
contact Plaintiffs by telephone to inform them of their decision to perform environmental tests is,
perhaps, an "unwise" decision. However, this collective decision on the part of the Board does
not expose the individual board members to liability since once again, their action ascribes no
independent tortious conduct to any individual director. The Plaintiffs' claims on this issue might
have been [*6]sufficient if, in fact, the environmental tests came
back showing that no lead was found in Mr. Mar's apartment. Whether this may have been
sufficient evidence that the Defendants ordered the tests to "victimize and humiliate Plaintiffs" is
not before this Court as there were no such findings. According to the documents provided, a
subsequent Environmental Report from an EPA trained lead-based paint inspector concluded
there were in fact high levels of lead paint found in Mr. Mar's apartment. The Plaintiffs have not
indicated in their pleadings that the environmental company was part of a plan to harm Plaintiffs.
The contradictory findings found in the Affidavit of environmental specialist Laurence B. Malloy
does nothing to change this Court's conclusion. According to Anthony Wolff's Affidavit, when
Mr. Malloy inspected Plaintiff's apartment (at a time unspecified in the Malloy Affidavit,) the
inspection was after remedial work had been done to seal the pipes. As a result, Mr. Malloy
observed a condition that did not accurately depict the condition of the apartment at the time of
the alleged "break-in." The Plaintiffs' fail to demonstrate in their pleadings that Defendants acted
in a way that was outside the scope of their authority or in bad faith and as a result, they should
be protected by the business judgment rule.
Plaintiffs state that the Defendant board of directors altered board minutes to
justify the "emergency" situation. This was done in an attempt to cover-up a hole in
the fabricated claim of "exigent" circumstances. The question is not whether a forgery existed
(one set of minutes was signed and the other was not), but whether the board was somehow
involved in a "cover-up scheme" in an attempt to shield themselves from accusations that they
acted in bad faith when they decided to enter plaintiffs' apartment without express permission.
Plaintiffs have not given any specific detail as to which, if any, defendants actually engaged in altering the minutes. Plaintiffs allege in the opposition papers, "one or more defendants altered the March 13, 2007 minutes and produced a subsequently altered version of the minutes". In order to hold the board members individually liable, Plaintiffs must plead with specificity the individual tortious act. Conclusory or speculative allegations are insufficient to deprive directors of the protection of the rule precluding judicial scrutiny of board decisions (see Pelton v. 77 Park Ave. 3 A.D. 1 (2006 citing Captain's Walk Homeowners Assn. v Penney, 17 AD3d 617 (2005). The fact that Plaintiff produced two separate board minutes and concluded that any one of the defendants can be held liable is not sufficient to warrant pursuing the case against the individual defendants. Moreover, even if Plaintiff had pled this with specificity, the fact that the subsequent minutes added the phrase "for the first time" with respect to the notation that Harvey Mar informed the Board that debris for 5E continues to infiltrate into his apartment, does not support Plaintiff's conclusion that this amounted to "the Board's phony determination of exigent circumstances" to inspect Plaintiff's apartment. Regardless of whether the Board was informed for the first time, or was previously so informed, the circumstances were exigent. However, the Court will allow discovery, including non party discovery if needed, related to the discrepancy in the minutes as such discovery may relate to the underlying issue of causation.
Plaintiffs further contend Defendants should have had knowledge that the environmentally hazardous conditions in Mr. Mar's apartment could not have come from plaintiffs' apartment because it is undisputed that Mr. Mar had also done construction to his apartment with approval from the board members. Plaintiffs state that the renovation occurred in and around 2004 and Defendant claims 2001. Even taking the later date as true, this is still four years prior to the start of Plaintiffs' renovation. Even as pleaded, if the board members had knowledge of Mr. Mar's previous renovation, this does not mean that their decisions are not [*7]entitled to protection under the business judgment rule, especially where an independent, licensed specialist came to the conclusion that the lead did in fact originate from Plaintiff's apartment. There can be no tortious conduct by any board member if they ordered Plaintiffs to pay for the environmental clean-up based upon a report from an independent expert. For the same reasoning, Mr. Mar should not be held individually liable for claiming to the board that the hazardous condition in his apartment was from Plaintiff's renovation and not his own. In addition, the control of the board's policies lies in the hands of the board collectively, not in the hands of any individual member. (See Pelton at 8).
Additionally, the Affidavits submitted by Plaintiffs from two former Cooperative
shareholders (Poretta Affidavit and Taravella Affadavit) do not cite any separate tortious act
perpetrated by any Board Member against Plaintiffs. In fact, both the Poretta Affadavit and the
Taravella Affidavit concern a time period from 2001 to 2004, several years prior to the relevant
period. Neither Affidavit makes reference to Plaintiffs' specific experiences with any of the
Board members, and is inapplicable to the relevant time period. There is no basis for continuing
the action against the Board Members individually and the Breach of Fiduciary claims against the
individual board members must be dismissed.
Plaintiffs' Demand for Punitive Damages
Plaintiffs' seek punitive damages on its Sixth and Seventh Causes of Action for
Breach of Fiduciary duty. Punitive damages are typically supported by evidence of wrongdoing
that is "intentional and deliberate, and has the character of outrage frequently associated with
crime." (Freeman v. Port Auth. Of NY & N.J., 243 AD2d 409, 410 (1st Dept 1997),
quoting Liberman v Riverside Mem. Chapel, 226 AD2d 283, 291 (1996), quoting
Prozeralik v Capital Cities Communications, 82 NY2d 466, 478 (1993). "Punitive
damages, in contrast to compensatory damages are awarded to punish a defendant for wanton and
reckless or malicious acts and to protect society against similar acts". (Rivera v City of New York, 40 AD3d
334, 344 (1st Dept 2007). Citing Homes Ins. Co. v American Home Prods. Corp., 75
NY2d 196, 200 (1990).
There are no factual allegations in the Complaint, which, if proven at trial, would
support a claim for punitive damages. Plaintiffs have failed to sufficiently plead that this case
"involved in a larger fraud that has damaged many additional shareholders" (see Plaintiffs
opposition papers p. 26). The allegations that the Defendants have unreasonably withheld
consent to perform alterations to the apartment, that the Board breached their duties by
delegating their obligations and duties to Anthony and Pamela Wolff, who in turn acted in bad
faith and that the Board Members were negligent in the performance of their duties do not
demonstrate that these Defendants' actions were intentional and deliberate or had the character of
outrage. Therefore, an award of punitive damages in the Sixth and Seventh causes of action
against the Defendants should be stricken from the Complaint.
It is hereby
ORDERED that the motion by Defendants pursuant to CPLR 3211(a) (7) ,
dismissing the Sixth cause of action for Breach of Fiduciary Duty against Wolff Mgt., Inc and
Anthony Wolff and Pamela Wolff is denied; and it is further
ORDERED that the motion by Defendants pursuant to CPLR 3211 (a) (7),
dismissing the Sixth and Seventh causes of action for Breach of Fiduciary Duty against the
individual Board members, Harvey Mar, James Periconi, Adam Hurwitz, Lisa Miller, Andrew
Leon, "John Doe" and "Jane Doe" is granted; and it is further
ORDERED that claims for punitive damages in the Sixth and Seventh
causes of action is [*8]denied and stricken from the Complaint.
This constitutes the Decision and Order of the Court.
Dated: February 28, 2011
ENTER:
__________________________
J.S.C.