Plaintiff Thomas R. Newman (Newman) moves, pursuant to CPLR 3212, on behalf of plaintiff Maro A. Goldstone (Goldstone) for partial summary judgment on the issue of liability for her second cause of action for breach of contract (warranty of habitability) and her fourth cause of action for breach of contract (repairs).

Defendant cross-moves, pursuant to CPLR 3212, for a declaratory judgment on its third counterclaim, declaring that defendant has the right, pursuant to the lease agreement, to use its business judgment to unilaterally repair the premises without the consent of plaintiffs, and to dismiss the fourteenth and fifteenth causes of action asserted against it.

On January 10, 2010, this court denied Goldstone's motion for partial summary judgment on her first, second, third, sixth and eighth causes of action. That decision was modified with respect to the first cause of action, but was otherwise affirmed by the Appellate Division, First Department, on May 11, 2010.^[FN1] [*2]

On April 5, 2011, this court denied plaintiffs' motion for leave to file a second amended complaint.

The facts of this case have been previously discussed in detail and will only be referenced here as needed by these motions.

According to Paragraph 92 of the amended complaint, the Proprietary Lease provides:

Lessor shall at its expense keep in good repair all of the building including all of the apartments, the sidewalks and courts surrounding the same, and its equipment and apparatus except those portions the maintenance and repair of which are expressly stated to be the responsibility of the Lessee pursuant to Paragraph 18 hereof.

Goldstone alleges that defendant has failed to repair her unit as mandated by the above-reference provision of the Proprietary Lease, resulting in damages to her in the amount of

$15 million.

The fourteenth cause of action asserted in the amended complaint alleges libel, based on a bill sent to Goldstone on or about November 1, 2007, alleging maintenance arrears on the unit, defendant allegedly communicating the allegation of the arrears to its agent, Brown Harris Stevens and others, including defendant's accountant.

The fifteenth cause of action asserted in the amended complaint, also alleging libel, reiterates the allegations of the fourteenth cause of action based on a bill for arrears sent to Goldstone on or about March 1, 2008.

Defendant's third counterclaim seeks a declaration that defendant "has the right pursuant to the lease agreement to use its business judgment to unilaterally repair the premises without the consent of the plaintiffs."

Paragraph 4 (a) of the Proprietary lease states:

If the apartment or the means of access thereto or the building shall be damaged by fire or other cause covered by multiperil policies commonly carried by corporations owning "cooperative apartment buildings" in New York City (any damage to be repaired by the Lessor or the Lessee pursuant to Paragraphs 2 and 18, as the case may be), the Lessor shall at its own cost and expense, with reasonable dispatch after receipt of notice of said damage, repair or replace or cause to be repaired or replaced, with materials of a kind and quality then customary in buildings of the type of the building, the building, the apartment, and the means of access thereto, including the walls, floors, ceilings, pipes, wiring and conduits in the apartment. Anything in this Paragraph or Paragraph [*3]2 to the contrary notwithstanding, the Lessor shall not be required to repair or replace, or cause to be repaired or replaced, equipment, fixtures, furniture, furnishings or decorations installed by the Lessee or any of its predecessors in title nor shall the Lessor be obligated to repaint or replace wallpaper or other decorations in the apartment or to refinish floors located therein.

Paragraph 2 of the Proprietary Lease has been reprinted above as part of plaintiff's fourth cause of action. Paragraph 18 of the Proprietary Lease concerns repairs that are the responsibility of the Lessee.

Plaintiffs' unit was flooded in 2003, and the unit has yet to be repaired.

Gerald R. Uram (Uram), defendant's president from June 2004 to May 2010, was deposed in this matter and admitted that it is defendant's duty to make the repairs to the unit that are the subject of this litigation. Further, Uram testified that defendant's duty to repair is not suspended when there is a possibility of litigation. However, Uram also stated that defendant decided not to have plans drawn up to repair the unit because plaintiffs were not in occupancy and would not be harmed by the fact that work was not being done. Uram acknowledged that Goldstone was not in occupancy because defendant's contractors had gutted the unit three years before, and admitted that defendant told the consultant not to draw up the remediation plans.

Uram stated that the reason that defendant did not go forward with the work was because plaintiffs kept objecting to the consultant's plans and the board did not want to go forward when there was a risk of litigation regarding work to which plaintiffs objected.

Frederick Rohn (Rohn), a member of defendant's board of directors, was also deposed in this matter. Rohn testified that, in 2007, the board wrote to its consulting associates indicating an intent to proceed expeditiously with the repairs to plaintiffs' unit. However, Rohn also stated that remediation of the exterior walls of the building had to be completed before the interior of the unit was repaired, in order to make sure that water would not continue to infiltrate the apartment, and that he instructed his consultant not to draw up construction plans for the exterior walls of plaintiffs' unit.

Terri Sasanow (Sasanow), defendant's president during the time that plaintiffs' unit was flooded until May 2004, was deposed and testified that she had instructed the building's management agent to repair plaintiffs' unit as quickly as possible after it was flooded in 2003, and could not explain why [*4]the repairs were not made by 2006, when that management agent was fired.

Goldstone contends that defendant has breached its contractual duty to repair her unit by failing to make such repairs from 2003 to the present.

In opposition to Goldstone's motion, defendant asserts that the portion of her motion seeking summary judgment on her second cause of action must be denied since the same motion was previously denied and affirmed by the Appellate Division.

Defendant also argues that Goldstone refused to permit the work recommended by the consultants to be performed and made demands as to what work she would and would not allow. On February 22, 2007, defendant wrote to plaintiffs stating that it would commence work on the unit, to which plaintiffs responded with three separate letters, indicating a punch list of 21 items that they wanted addressed, requesting a meeting between plaintiffs, their architect, and the architect hired by defendant, and a demand that they must be satisfied as to the nature and quality of the work since they are the ones who would be living in the unit.

Defendant includes a copy of a document entitled "Tolling Agreement," entered into by plaintiffs, defendant and defendant's insurer, dated June 10, 2006, suspending all litigation, actual or potential, between the parties until December 31, 2007. Defendant argues that this agreement indicates that the parties were attempting to resolve this matter in good faith.

Defendant maintains that plaintiffs' refusal to allow the repairs to proceed precludes their entitlement to damages. Lastly, defendant asserts that it is entitled to perform repairs within its business judgment.

In reply, plaintiffs argue that the branch of its motion seeking summary judgment on its second cause of action is not barred by the "one motion rule" because they allege that they have made a showing of newly discovered evidence, specifically, the deposition testimony of Uram and defendant's former managing agent, Harry Smith (Smith).^[FN2]

Plaintiffs argue that defendant's assertion that it was acting in good faith is irrelevant to its obligation to provide plaintiff with a habitable residence or to repair the unit in an expeditious manner. Moreover, plaintiffs contend that the scope of the work that defendant plans is inadequate to correct the [*5]defective conditions in the leaking exterior walls and that defendant cannot act in a discriminatory manner so that, in allegedly repairing the unit, it makes the interior rooms and terraces smaller than they were when Goldstone became the proprietary lessee. In addition, plaintiffs maintain that the business judgment rule does not apply to situations in which the directors act in bad faith or in a discriminatory manner.

Plaintiffs also aver that they have not thwarted defendant's efforts to repair the unit, because they have never denied access to defendant to effectuate the remediation. Further, plaintiffs dispute defendant's contention that their damages are limited to rent abatement, which relief has already been granted.

By agreement of the parties, Goldstone has been permitted to submit a sur-reply in further support of her motion for partial summary judgment.

Goldstone affirms that the repairs proposed by defendant would reduce the interior living space of her unit by six inches in every room of the apartment, including the bathrooms, requiring the moving of radiators and other fixtures. These changes, Goldstone maintains, are discriminatory, since no other apartment in the building has had the type of construction proposed used to deal with exterior leaks and no other apartment has insulation in the walls as proposed by defendant to deal with the leaks.

In its cross-motion, defendant avers that plaintiffs are not entitled to have the unit repaired to its pre-flood condition, and that defendant is entitled to use its business judgment to unilaterally repair the premises. As such, defendant states that it is entitled to a declaratory judgment to the effect that it may repair the unit as it sees fit in the exercise of its business judgment.

With respect to plaintiffs' fourteenth and fifteenth causes of action sounding in libel, defendant maintains that the complaint is deficient in its allegations.

Newman has admitted that the date appearing in the fourteenth cause of action is incorrect. Further, the complaint fails to indicate any third person, other than defendant's own agents, to whom such alleged libelous documents were published and, in his deposition, Newman testified that he was unaware of any such persons.

In opposition to defendant's cross-motion, Goldstone asserts that there is no basis in law for granting that branch of the cross motion seeking declaratory relief. Plaintiffs state that this is especially true since defendant has failed to provide any scope of work or construction plans to indicate that it is planning to make any repairs as required by the Proprietary Lease. Plaintiffs also state that no member of defendant's board of directors, no architect, no consultant and/or no managing [*6]agent has entered their unit since 2006 and, since 2006, the damage in the unit has been exacerbated by new leaks.

In addition to the foregoing, plaintiffs reassert their position appearing in their motion and reply papers.

In reply to plaintiffs' opposition to its cross-motion, defendant reiterates its position that its actions are protected by the business judgment rule. Moreover, defendant states that the causes of action based on libel must be dismissed because plaintiffs have failed to show any publication of any alleged libel.

"The 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 eliminate any material issues of fact from the case [internal quotation marks and citation omitted]." Santiago v Filstein, 35 AD3d 184, 185-186 (1st Dept 2006). The burden then shifts to the motion's opponent to "present evidentiary facts in admissible form sufficient to raise a genuine, triable issue of fact." Mazurek v Metropolitan Museum of Art, 27 AD3d 227, 228 (1st Dept 2006); see Zuckerman v City of New York, 49 NY2d 557, 562 (1980). If there is any doubt as to the existence of a triable fact, the motion for summary judgment must be denied. See Rotuba Extruders , Inc. v Ceppos, 46 NY2d 223, 231 (1978).

That branch of plaintiffs' motion seeking summary judgment on their second cause of action for breach of the warranty of habitability is granted with respect to liability only.

Defendant argues that this portion of the motion has already been determined and may not be re-addressed by the court. However, as stated in Jones v 636 Holding Corp. (73 AD3d 409 [1st Dept 2010]) "[s]uccessive motions for summary judgment should not be entertained without a showing of newly discovered evidence or other sufficient justification." See also 11 Essex Street Corp. v Tower Insurance Company of New York, 81 AD3d 516 (1st Dept 2011).

In the instant motion, plaintiffs provide the deposition testimony of Uram and Rohn, taken after the earlier motion was filed and decided, both of which evidence that defendant had made the decision in 2007 not to make any further repairs in plaintiffs' unit based on a fear of potential litigation and the fact that plaintiffs were not residing in the apartment and, therefore, presumably would not be injured by not having the work done.

In this court's earlier decision, this relief sought by plaintiffs was rejected, even though the court found that it was "uncontroverted that the flooding and mold in Penthouse B render the unit uninhabitable," because plaintiffs failed to provide evidence that defendant's efforts at remediation were unreasonable. In affirming this portion of this court's [*7]determination, although holding that Goldstone was entitled to a 100% abatement until the unit "is restored to a habitable condition (73 AD3d 506, 507), the Appellate Division stated that questions of fact existed as to whether defendant was making the repairs in a timely manner.

The new evidence provided by plaintiffs, that defendant had determined to make no repairs since 2007, is sufficient to demonstrate that defendant's actions have unjustifiably caused the unit to remain in an uninhabitable condition for an unreasonable period of time, warranting plaintiffs being granted summary judgment on the issue of liability on their second cause of action. Defendants present no evidence to raise an issue of fact in response to plaintiffs' prima facie showing.

Defendant's argument that this cause of action should be dismissed because the only relief that plaintiff would be entitled to for a breach of warranty claim is an abatement of her maintenance, which she already has received from the court, is not persuasive. Since a warranty of habitability is part of the Proprietary Lease between the parties, just as with any breach of contract action, the injured party may be entitled to consequential or punitive damages as well as compensatory damages. Bi-Economy Market, Inc. v Harleysville Insurance Company of New York, 10 NY3d 187 (2008); Minjak Co. v Randolph, 140 AD2d 245 (1st Dept 1988). However, the extent and nature of those damages remain a question of fact for the jury.

Similarly, that branch of plaintiffs' motion seeking summary judgment on their fourth cause of action for breach of contract for defendant's failure to make repairs is also granted with respect to liability only.

There is no question that repairs have not taken place in plaintiffs' unit, which violates defendant's obligations under provisions of the Proprietary Lease quoted above. Defendant bases its opposition on Leschins v 3777 Independence Corp. (NYLJ August 17, 2009, 2009 NY Misc Lexis 2564, 242 NYLJ 33 [Sup Ct, Bronx County, Hunter, J]), in which a landlord was relieved of its repair obligations because the tenant, who was in possession, denied the landlord access to make the repairs. There is no evidence in this case that plaintiffs have ever denied defendant access, nor does defendant so allege. Defendant's contention is that plaintiffs verbally objected to some of the proposed repairs, but that objection, without plaintiffs preventing access, is insufficient to relieve defendant of its contractual duties.

The other reason posited by defendant for its failure to repair plaintiffs' unit is its fear of litigation. Obviously, its failure to make the repairs has resulted in litigation as well, and has not obviated defendant's contractual responsibilities. In addition, defendant's alleged good faith [*8]efforts are not only insufficient to relieve it of its duty, but the testimony of its own directors and agents fails to substantiate a claim of good faith, wherein defendant made the conscious decision not to repair the unit.

That portion of defendant's cross-motion seeking a declaration on its third counterclaim that its actions are protected by the business judgment rule is denied.

Generally, the business judgment rule prohibits judicial inquiry into the decisions of the board of a cooperative corporation that relate to the enforcement of a matter of building policy against a tenant shareholder, as long as the board acts within the scope of its authority, in furtherance of the cooperative's purposes, and in good faith. Matter of Levandusky v One Fifth Avenue Apartment Corp., 75 NY2d 530 (1990). However, the business judgment rule will not protect a cooperative board from liability for its own breach of contract. Anderson v Nottingham Village Homeowner's Association, Inc., 37 AD3d 1195, 1197 (4th Dept 2007) ("the business judgment rule does not protect defendant from liability for its alleged breach of contract").

In the instant matter, the business judgment rule does not shield defendant from potential liability, since plaintiffs' claims are based on their contractual relationship with defendant pursuant to the Proprietary Lease, and defendant's alleged violation of that agreement. Id. Hence, the business judgment rule will not protect defendant for damages to plaintiffs caused by defendant's alleged breach of the implied warranty of habitability or alleged breach of its covenant to make repairs. Nor does defendant cite any particular building policy that it seeks to enforce against plaintiff tenant shareholder in failing to comply with the warranty by timely prosecuting the repairs.

Lastly, the court grants that portion of defendant's cross-motion seeking to dismiss plaintiffs' fourteenth and fifteenth causes of action for libel.

CPLR 3016 (a) requires that in "an action for libel or slander, the particular words complained of shall be set forth in the complaint." This requirement is strictly enforced and the exact words must be set forth. Dismissal of these causes of action is mandated "[s]ince the actual defamatory words were never pleaded with particularity, but were only paraphrased in a manner such that the actual words were not evident from the face of the complaint." Murganti v Weber, 248 AD2d 208, 208 (1st Dept 1998); Hernandez v New York City Law Department Corporation Counsel, 258 AD2d 390 (1st Dept 1999). Further, "[t]he complaint also must allege the time, place and manner of the false statement and specify to whom it was made." Dillon v City of New York, 261 AD2d 34, 38 (1st Dept 1999). [*9]

In addition to the lack of specificity with respect to the exact defamatory words alleged, Newman has admitted that the date that the alleged defamatory statement was made that appears in the fourteenth cause of action is incorrect. Nor does plaintiff offer any evidence of malice, so any rent arrears statement made to the managing agent is subject to a qualified privilege. Bogoni v Simpson, 306 AD2d 125 (1st Dept 2003). For all these reasons, the libel causes of action must be dismissed.

Based on the foregoing, it is hereby

ORDERED that plaintiffs' motion seeking summary judgment on their second and fourth causes of action is granted with respect to liability only, and the issue of damages is to be determined at trial; and it is further

ORDERED, that as to the portion of defendant's cross motion seeking declaratory relief on its third counterclaim, it is ADJUDGED and DECLARED that defendant Gracie Terrace Apartment must repair the premises in accordance with the terms of the Proprietary Lease; and it is further

ORDERED that the portion of defendant's motion seeking summary judgment on plaintiffs' fourteenth and fifteenth causes of action is granted and those causes of action are dismissed.

This is the decision and order of the court.

Dated: August 25, 2011