Board of Mgrs. of the Blackfriars Condominium v. AG Ebenezer LLC

2024 NY Slip Op 34304(U)
New York Supreme Court, New York County·Decided December 3, 2024·No. Index No. 656410/2023·Unpublished

Opinion

Board of Mgrs. of the Blackfriars Condominium v AG Ebenezer LLC

2024 NY Slip Op 34304(U)

December 3, 2024

Supreme Court, New York County Docket Number: Index No. 656410/2023 Judge: Lyle E. Frank

Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

NYSCEF DOC. NO. 61 RECEIVED NYSCEF: 12/03/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY

PRESENT: HON. LYLE E. FRANK PART 11M Justice

----------------------------------------------------------------- ----------------X INDEX NO. 656410/2023 THE BOARD OF MANAGERS OF THE BLACKFRIARS CONDOMINIUM, FIRST EBENEZER BAPTIST CHURCH, MOTION DATE 02/29/2024 INC.,

MOTION SEQ. NO. 001 Plaintiff,

- V -

DECISION + ORDER ON

AG EBENEZER LLC,ALMAT GROUP, LLC,DONALD MATHESON, UCHECHUKWU ALOZIE MOTION

Defendant.

------------------------------------------------------------------- --------------X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24,25,26,27,28,29, 30, 31,32,33, 34, 35,36,37, 38, 39,40,41,42,43,44,45,46,47,48,49,50,51,52,53,54, 56, 57,59, 60 were read on this motion to/for DISMISS

Upon the foregoing documents, defendants' motion to dismiss is granted in part and denied in part. Background

In 2014, plaintiff First Ebenezer Baptist Church (the "Church") entered into a Joint Venture Agreement (the "JVA") with defendant Almat Group, LLC ("Almat"), intending to develop a condominium. Pursuant to this JVA, Almat formed a business entity, defendant AG Ebenezer LLC ("Sponsor", collectively with Almat the "LLC Defendants"), which was 50% owned and managed by Almat and 50% owned by the Church. In 2016, the Church sold the property located at 2457 Frederick Douglass Boulevard in New York, New York (the "Building"), an eight-unit building known as the Blackfriars Condominium to Sponsor. There was an offering plan (the "Plan") that was filed and made effective in 2019, along with a declaration and bylaws. The first title for a condominium unit closed in 2020, and the rest of the

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NYSCEF DOC. NO. 61 RECEIVED NYSCEF: 12/03/2024

units were subsequently purchased by members of an unincorporated association of unit owners called the Board of Managers of the Blackfriars Condominium (the "BOM", collectively with Church the "Plaintiffs").

Plaintiffs have alleged a host of issues and wrongs connected to the Building, including significant construction defects, failure to preserve tax-exempt status for the Church, and failure to honor financial commitments. Plaintiffs brought the underlying suit in 2023, pleading eight causes of action. Several of these claims were brought against the initial board members for Sponsor, defendant Donald Matheson ("Matheson") and defendant Uchechukwu Alozi ("Alozie", together with Matheson the "Individual Defendants") in their individual capacity. The LLC Defendants and the Individual Defendants ( collectively, "Defendants") have opposed by bringing the present motion to dismiss. Standard of Review

It is well settled that when considering a motion to dismiss pursuant to CPLR § 3211, "the pleading is to be liberally construed, accepting all the facts alleged in the pleading to be true and according the plaintiff the benefit of every possible inference." Avgush v. Town of Yorktown, 303 A.D.2d 340 (2d Dept. 2003). Dismissal of the complaint is warranted "if the plaintiff fails to assert facts in support of an element of the claim, or if the factual allegations and inferences to be drawn from them do not allow for an enforceable right ofrecovery." Connaughton v. Chipotle Mexican Grill, Inc, 29 N.Y.3d 137, 142 (2017).

CPLR § 321 l(a)(l) allows for a complaint to be dismissed if there is a "defense founded upon documentary evidence." Dismissal is only warranted under this provision if "the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law." Leon v. Martinez, 84 N.Y.2d 83, 88 (1994).

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CPLR § 321 l(a)(5) allows for a complaint to be dismissed because of a valid release.

While a valid release generally "constitutes a complete bar", for a signed release the burden shifts to the plaintiff to "show that there has been fraud, duress, or some other fact which will be sufficient to void the release." Centro Empesarial Cempresa S.A. v. America M6vil, S.A.B. de C. V, 17 N.Y.3d 269,276 (2011).

A party may move for a judgment from the court dismissing causes of action asserted against them based on the fact that the pleading fails to state a cause of action. CPLR § 321 l(a)(7). For motions to dismiss under this provision, "[i]nitially, the sole criterion is whether the pleading states a cause of action, and if from its four comers factual allegations are discerned which taken together manifest any cause of action cognizable at law." Guggenheimer v. Ginzburg, 43 N.Y. 2d 268,275 (1977). Discussion

Defendants brought the present motion to dismiss the complaint in its entirety as to the Individual Defendants, and to dismiss the first, third, fourth, fifth, sixth, seventh, and eighth causes of action as against all defendants. They have moved pursuant to CPLR § 3211 ( a)(l ), (5), and (7). Essentially, Defendants argue that this action is a standard breach of contract action, and that the rest of Plaintiffs' claims are subsumed within the breach of contract action. Plaintiffs oppose. For the reasons that follow, the complaint is dismissed in its entirety as to the Individual Defendants, the first cause of action is dismissed as to defendant Almat, and the third and eighth causes of action are dismissed in their entirety.

The Claims Against the Individual Defendants An initial issue to address is the extent of the Individual Defendants' personal liability.

Defendants argue that the complaint should be dismissed in its entirety as to the Individual

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Defendants because they have no personal liability in this matter and their alleged actions were taken solely in their status as representatives of the Sponsor. Plaintiffs argue that the Individual Defendants are liable for breach of fiduciary duty and other intentional torts, without needing to establish piercing the corporate veil.

A condominium Sponsor's principals may not be held individually liable for a claim that is "premised solely on alleged violations of the offering plan and certification." Board ofMgrs. Of 184 Thompson St. Condominium v. 184 Thompson St. Owner LLC, 106 A.D.3d 542, 544 (1st Dept. 2013); see also Board ofMgrs. OfPetit Verdot Condominium v. 732-734 WEA, LLC, 215 A.D.3d 482,483 (1st Dept. 2023) (holding that a private litigant may not pursue a common-law cause of action against a sponsor's principals when the "claim is predicated solely on a violation of the Martin Act or its implementing regulation and would not exist but for the statute"). Claims alleging that a sponsor violated the offering plan, without more, cannot impose personal liability on the Individual Defendants.

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