Carling v. 205-69 Apartments, Inc.

52 A.D.3d 261, 860 N.Y.S.2d 29

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: June 10, 2008
• Status: Published

Opinion

Judgment, Supreme Court, New York County (Ira Gammerman, J.H.O.), entered November 8, 2007, awarding plaintiff the sum of $108,000, plus interest, and bringing up for review an order, same court and J.H.O., entered October 17, 2007, which, inter alia, denied defendant’s motion for summary judgment and granted plaintiff’s cross motion for summary judgment awarding him the amount of the flip tax he paid in connection with the sale of his shares in defendant cooperative corporation, unanimously reversed, on the law, without costs, the judgment vacated, plaintiff’s cross motion denied, and the matter remanded for further proceedings consistent herewith. Appeal from the aforesaid order unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

The operative fee structure created by a 1998 agreement violated Business Corporation Law § 501 (c) because the provision that established a disparate flip tax was not incorporated into a proprietary lease, occupancy agreement, offering plan, or properly approved amendment thereto (see Wapnick v Seven Park Ave. Corp., 240 AD2d 245, 246 [1997]). However, since the sponsor “was a necessary party, and should have been joined in the proceeding at its inception” (Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 5 NY3d 452, 457 [2005]), granting plaintiff relief was premature.

We have considered defendant’s remaining arguments and find them unavailing. Concur—Lippman, PJ., Williams, Moskowitz and Acosta, JJ.