Soloway v CIM Group 2024 NY Slip Op 30377(U) February 2, 2024 Supreme Court, New York County Docket Number: Index No. 651820/2023 Judge: Andrew Borrok 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. INDEX NO. 651820/2023 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/02/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. ANDREW BORROK PART 53 Justice ----------------------------------------------------------------- ----------------X INDEX NO. 651820/2023 STEPHEN SOLOWAY, 05/16/2023, Plaintiff, MOTION DATE 06/15/2023
- V - MOTION SEQ. NO. _ _0_0_1_0_0_2__
THE CIM GROUP, 246 SPRING STREET (NY) MANAGER, LLC DECISION + ORDER ON MOTION Defendant. ------------------------------------------------------------------- --------------X
The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 11, 12, 13,25,26,27,28,29,30,31,32,33,34,35,37,39,41,42,44 were read on this motion to/for DISMISS
The following e-filed documents, listed by NYSCEF document number (Motion 002) 14, 15, 16, 17, 18, 19,20,21,22,23,24, 36,40,43 were read on this motion to/for COMPEL ARBITRATION
Upon the foregoing documents, the motions are decided as set forth below.
The Plaintiff Stephen Soloway, MD, a New Jersey resident, is the owner of three hotel studio
units at "The Dominick," a condominium building at 246 Spring Street in Manhattan (Premises)
(verified complaint ,i 1 [NYSCEF Doc No. 1]). The Plaintiff alleges that, beginning in or about
November 2017, Defendants The CIM Group (CIM) and 246 Spring Street (NY) Manager, LLC
(246 Spring) "took over and assumed management, operation and control of the property, hotel,
and its owner rental program ... under certain written agreements [Defendants entered] with the
Trump Organization and/or 'Trump Soho"' (id. ,i 2).
651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL Page 1 of 6 Motion No. 001 002
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The Plaintiff asserts three causes of action. The first is for the Defendants' alleged breach of
their duties as agents and fiduciaries of the Plaintiff (id. ,i 24 et seq.). The second is for breach of
implied contract, quasi contract, and the implied covenant of good faith and fair dealing (id. ,i 34
et seq.). The third cause of action seeks an equitable accounting (id. ,i 40 et seq.).
The Defendants first move (Mtn. Seq. No. 1) to dismiss the complaint pursuant to CPLR
321 l(a)(8) and 3013 with respect to CIM for lack of jurisdiction because The CIM Group
allegedly does not exist and so could not have been served. The Plaintiff opposes and submits a
cross motion for an order permitting the caption to be amended under CPLR 3025. In support,
the Plaintiff submits copies of a summons and complaint and other litigation documents in a
2019 action filed in New York County Supreme Court captioned Lang v Trump International
Hotels Management, LLC (Index No. 157943/2019) relating to the Premises in which CIM was
named as defendant "CIM Group, LP," and notes that the Defendant answered in that name and
did not plead that the name was incorrect (see NYSCEF Doc No 37 and exhibit 5 thereto
[NYSCEF Doc No. 30]). Thus, any inadvertent technical error does not warrant dismissal and
the Plaintiff's cross motion for amendment of the caption to cure this misnaming of the
Defendant is granted under CPLR 3025( c).
The Defendants also seek dismissal with respect to CIM under CPLR 3013, based on Plaintiff's
alleged failure to identify the roles of 246 Spring and CIM and to differentiate their conduct. In
his verified complaint, Plaintiff alleges that, despite his demands, he has not been made privy to
whatever agreements govern operation of the Premises after the Trump International Hotels
Management LLC (TIHM) was replaced as hotel manager in 2017. CPLR 3211 (d) provides that
651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL Page 2 of 6 Motion No. 001 002
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a motion to dismiss can be denied where plaintiff submits affidavits showing that facts essential
to justify opposition may exist but cannot then be stated. Plaintiff made such averments in his
verified pleading (see NYSCEF Doc No. 1, ,iip-4, 9, 12, 41), and so this facet of Defendants'
motion must also be denied. 1
The Defendants also move (Mtn. Seq. No. 2) to compel arbitration or, in the alternative, to
dismiss the verified complaint as to 246 Spring. First, the Defendants argue that Plaintiff is
bound by the arbitration clause in its Rental Agreements with TIHM (NYSCEF Doc Nos. 20, 21,
and 22) and so arbitration should be compelled, pursuant to CPLR 7503(a) and this action
stayed, pursuant to CPLR 2201. However, "[u]nder New York law, the right to compel
arbitration does not extend to a party that has not signed the agreement pursuant to which
arbitration is sought unless the right of the nonsignatory is expressly provided for in the
agreement" (Greater New York Mut. Ins. Co. v Rankin, 298 AD2d 263,263 [1st Dept 2002]).
The Agreements' signatories are Plaintiff, as Owner, and TIHM, as Hotel Manager. 246 Spring
cannot compel arbitration as it is not a signatory to the Rental Management Agreements, and
Defendants failed to identify any provision that would expressly extend such right to 246 Spring.
In fact, the agreement provides that only the management agreement, not the rental agreement, is
assignable.
The Defendants next argue Plaintiffs second cause for breach of implied contract, quasi contract
and implied covenant of good faith and fair dealing should be dismissed as duplicative of his
1 Defendants reiterate this argument in motion sequence 002, seeking dismissal of Plaintiffs claims against 246 Spring in motion sequence 002, which also fails. 651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL Page 3 of 6 Motion No. 001 002
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breach of fiduciary duty claim. In the opposition papers, the Plaintiff argues it should survive
because he has properly alleged the lack of a written agreement between him and 246 Spring.
Pleading in the alternative between breach of contract versus implied contract is permitted ( CIP
GP 2018, LLC v Koplewicz, 194 AD3d 639, 640 [1st Dept 2021] "where there is a bona fide
dispute as to the existence of a contract or the application of a contract in the dispute in issue, a
plaintiff may proceed upon a theory of quasi contract as well as breach of contract, and will not
be required to elect his or her remedies"). Allowing these claims to go forward is appropriate at
this stage of the litigation. The Plaintiff has yet to have the opportunity to demonstrate, via
evidence found in discovery, the nature of the parties' business relationship and the obligations
(if any) to which such relationship gives rise. Accordingly, Defendant's motion to dismiss
Plaintiffs second cause of action is denied.
Defendants also argue that dismissal of Plaintiffs claims for breach of fiduciary duty and an
accounting is warranted because Plaintiff failed to plead those claims in a manner that meets the
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Soloway v CIM Group 2024 NY Slip Op 30377(U) February 2, 2024 Supreme Court, New York County Docket Number: Index No. 651820/2023 Judge: Andrew Borrok 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. INDEX NO. 651820/2023 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 02/02/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. ANDREW BORROK PART 53 Justice ----------------------------------------------------------------- ----------------X INDEX NO. 651820/2023 STEPHEN SOLOWAY, 05/16/2023, Plaintiff, MOTION DATE 06/15/2023
- V - MOTION SEQ. NO. _ _0_0_1_0_0_2__
THE CIM GROUP, 246 SPRING STREET (NY) MANAGER, LLC DECISION + ORDER ON MOTION Defendant. ------------------------------------------------------------------- --------------X
The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 11, 12, 13,25,26,27,28,29,30,31,32,33,34,35,37,39,41,42,44 were read on this motion to/for DISMISS
The following e-filed documents, listed by NYSCEF document number (Motion 002) 14, 15, 16, 17, 18, 19,20,21,22,23,24, 36,40,43 were read on this motion to/for COMPEL ARBITRATION
Upon the foregoing documents, the motions are decided as set forth below.
The Plaintiff Stephen Soloway, MD, a New Jersey resident, is the owner of three hotel studio
units at "The Dominick," a condominium building at 246 Spring Street in Manhattan (Premises)
(verified complaint ,i 1 [NYSCEF Doc No. 1]). The Plaintiff alleges that, beginning in or about
November 2017, Defendants The CIM Group (CIM) and 246 Spring Street (NY) Manager, LLC
(246 Spring) "took over and assumed management, operation and control of the property, hotel,
and its owner rental program ... under certain written agreements [Defendants entered] with the
Trump Organization and/or 'Trump Soho"' (id. ,i 2).
651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL Page 1 of 6 Motion No. 001 002
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The Plaintiff asserts three causes of action. The first is for the Defendants' alleged breach of
their duties as agents and fiduciaries of the Plaintiff (id. ,i 24 et seq.). The second is for breach of
implied contract, quasi contract, and the implied covenant of good faith and fair dealing (id. ,i 34
et seq.). The third cause of action seeks an equitable accounting (id. ,i 40 et seq.).
The Defendants first move (Mtn. Seq. No. 1) to dismiss the complaint pursuant to CPLR
321 l(a)(8) and 3013 with respect to CIM for lack of jurisdiction because The CIM Group
allegedly does not exist and so could not have been served. The Plaintiff opposes and submits a
cross motion for an order permitting the caption to be amended under CPLR 3025. In support,
the Plaintiff submits copies of a summons and complaint and other litigation documents in a
2019 action filed in New York County Supreme Court captioned Lang v Trump International
Hotels Management, LLC (Index No. 157943/2019) relating to the Premises in which CIM was
named as defendant "CIM Group, LP," and notes that the Defendant answered in that name and
did not plead that the name was incorrect (see NYSCEF Doc No 37 and exhibit 5 thereto
[NYSCEF Doc No. 30]). Thus, any inadvertent technical error does not warrant dismissal and
the Plaintiff's cross motion for amendment of the caption to cure this misnaming of the
Defendant is granted under CPLR 3025( c).
The Defendants also seek dismissal with respect to CIM under CPLR 3013, based on Plaintiff's
alleged failure to identify the roles of 246 Spring and CIM and to differentiate their conduct. In
his verified complaint, Plaintiff alleges that, despite his demands, he has not been made privy to
whatever agreements govern operation of the Premises after the Trump International Hotels
Management LLC (TIHM) was replaced as hotel manager in 2017. CPLR 3211 (d) provides that
651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL Page 2 of 6 Motion No. 001 002
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a motion to dismiss can be denied where plaintiff submits affidavits showing that facts essential
to justify opposition may exist but cannot then be stated. Plaintiff made such averments in his
verified pleading (see NYSCEF Doc No. 1, ,iip-4, 9, 12, 41), and so this facet of Defendants'
motion must also be denied. 1
The Defendants also move (Mtn. Seq. No. 2) to compel arbitration or, in the alternative, to
dismiss the verified complaint as to 246 Spring. First, the Defendants argue that Plaintiff is
bound by the arbitration clause in its Rental Agreements with TIHM (NYSCEF Doc Nos. 20, 21,
and 22) and so arbitration should be compelled, pursuant to CPLR 7503(a) and this action
stayed, pursuant to CPLR 2201. However, "[u]nder New York law, the right to compel
arbitration does not extend to a party that has not signed the agreement pursuant to which
arbitration is sought unless the right of the nonsignatory is expressly provided for in the
agreement" (Greater New York Mut. Ins. Co. v Rankin, 298 AD2d 263,263 [1st Dept 2002]).
The Agreements' signatories are Plaintiff, as Owner, and TIHM, as Hotel Manager. 246 Spring
cannot compel arbitration as it is not a signatory to the Rental Management Agreements, and
Defendants failed to identify any provision that would expressly extend such right to 246 Spring.
In fact, the agreement provides that only the management agreement, not the rental agreement, is
assignable.
The Defendants next argue Plaintiffs second cause for breach of implied contract, quasi contract
and implied covenant of good faith and fair dealing should be dismissed as duplicative of his
1 Defendants reiterate this argument in motion sequence 002, seeking dismissal of Plaintiffs claims against 246 Spring in motion sequence 002, which also fails. 651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL Page 3 of 6 Motion No. 001 002
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breach of fiduciary duty claim. In the opposition papers, the Plaintiff argues it should survive
because he has properly alleged the lack of a written agreement between him and 246 Spring.
Pleading in the alternative between breach of contract versus implied contract is permitted ( CIP
GP 2018, LLC v Koplewicz, 194 AD3d 639, 640 [1st Dept 2021] "where there is a bona fide
dispute as to the existence of a contract or the application of a contract in the dispute in issue, a
plaintiff may proceed upon a theory of quasi contract as well as breach of contract, and will not
be required to elect his or her remedies"). Allowing these claims to go forward is appropriate at
this stage of the litigation. The Plaintiff has yet to have the opportunity to demonstrate, via
evidence found in discovery, the nature of the parties' business relationship and the obligations
(if any) to which such relationship gives rise. Accordingly, Defendant's motion to dismiss
Plaintiffs second cause of action is denied.
Defendants also argue that dismissal of Plaintiffs claims for breach of fiduciary duty and an
accounting is warranted because Plaintiff failed to plead those claims in a manner that meets the
heightened particularity standard set forth in CPLR 3016(b ). This is not so. Plaintiff takes pains
to set forth specific examples of defendants' alleged failure to provide copies of current
governing documents and records relating to the rental program, costs and expenses, revenue
share and other issues affecting the owners of condominium units (verified complaint, ,i 3).
Plaintiff also sets forth specific examples of Defendants allegedly failing to follow instructions
regarding acceptable rental rates for his units and continuing to reduce his "revenue
share/income" by repeatedly offering his units for free, or subject to "bulk rate" and special rate
discounts (verified complaint, ,i 15).
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Finally, Defendants argue that Plaintiff's claims for breach of fiduciary duty and an accounting
fail by virtue of the three-year limitations period afforded to by CPLR 214(4). To extent
Plaintiff can show that Defendants breached their continuing duties to protect his interest in his
units and to generate fair rental returns, however, these failures may "constitute[] a continuing
wrong that is not referable exclusively to the day the original wrong was committed'"
(Kaymakcian v Board ofManagers of Charles House Condominium, 49 AD3d 407,407 [1st
Dept 2008], quoting 1050 Tenants Corp. v Lapidus, 282 145, 146 [1st Dept 2001]). To the
extent Plaintiff is seeking money damages, as opposed to equitable relief, "the claim is limited to
any alleged damages that occurred within three years of the commencement of the instant action"
(id. 49 AD3d 407-08 [citation omitted]).
The Court has considered the parties' remaining arguments and finds them unavailing.
For the foregoing reasons, it is hereby
ORDERED that defendants' motion to dismiss the verified complaint as to defendant The CIM
Group is denied; and it is further
ORDERED that plaintiff's cross motion to amend the caption in this action is granted, pursuant
to CPLR 3025( c), as follows:
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ---------------------------------------------------------x STEPHEN SOLOWAY,
Plaintiff,
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-against-
CIM GROUP, LLC and 246 SPRING STREET (NY) MANAGER, LLC,
Defendants. ---------------------------------------------------------x and it is further
ORDERED that a copy of this order shall be served on the Clerk of the Court and the Clerk of
the General Clerk's Office through the e-filing system so that the Court's records may be
updated; and it is further
ORDERED that Defendants' motion to compel arbitration and stay the litigation or, in the
alternative, to dismiss the verified complaint as to 246 Spring Street (NY) Manager, LLC is
denied.
2/2/2024 DATE ANDREW BORROK, J.S.C.
~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION
GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL Page 6 of 6 Motion No. 001 002
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