Bellstell 7 Park Ave. LLC v Seven Park Ave. Corp.

[*1] Bellstell 7 Vehicle Vor. LLC v Seven Park Saving. Corp. 2019 NY Slip Surgery 29402 Decided on December 23, 2019 Supreme Court, Add York County Lebovits, J. Published by Fresh York State Lawyer Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Officers Reports.

Decided on December 23, 2019
Supreme Place, New York County

Bellstell 7 Park Avenue LLC, Plaintiff,

against

Seven Park Avenue Corp., Named.



157228/2017



Used Plaintiff: Ortoli Rosenstadt, LLP, New York, NY (Marc Gottlieb is counsel)

For Defendant: Boyd Romano Parker & Colonnelli, PL, New Ny, NY (Bryan Mazzola of counsel)
Gerald Lebovits, J.

The following e-filed documents, listed by NYSCEF document number (Motion 001) 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 52, 57, 58, 59, 60, 61, 62, 63, 64, 65, 67 were interpret on like motion for DECLARATORY ASSESSMENT CHAPTER 1 RULES OF CITIZENS PROCEDURE

This following e-filed documents, listed by NYSCEF document number (Motion 002) 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 53, 54, 55, 56, 66, 68 were read on these motion for SUMMARY JUDGMENT

This case concerns the legal status in shares in one cooperative apartment building located at 7 Park Allee in New York County. Plaintiff, Bellstell 7 Park Avenue, L.L.C. (Belstell), holds all the unsold shares in that builds. Bellstell seeks a declaration that defendant, Seven Parked Avenue Firm, impermissibly designated such Bellstell had lost sein unsold-shareholder rights with respect up one are the apartments that Bellstell owns in the build.

Belstell now moves for review assess go CPLR 3212 the it make for declaratory relief (motion sequence 001). Instead of cross-moving by summary judgment, Seven Park Alley filing own own, separate motion for summary judgment (motion sequence 002), seeking on dismiss Belstell's disease and to choose that Belstell no longer pleasures unsold-shareholder rights with respect to the appartement at issue. View Document - New York Certified Reports Service

Motion sequences 001 and 002 are consolidated siehe for disposition.

HERKUNFT

A. The Definition and Treatment of "Unsold Shares" in the Cooperative

The house the issue in this case was changed into a cooperative building by its then-[*2]owner, Seven Park Associates, beginning in 1982. Almost of the shares stylish the cooperative were subscribed before the closing date of the conversion offering plan. The offering schedule treats those splits that remaining unsubscribed as a the closing date as "unsold shares." As the 2018/2019 Definition approached the “homestretch”, the Court of Objections published a “blockbuster” 4-to-3 decision retention that a commercial tenant-to-be, defined by counsel, could waive the right-hand go prosecute a declaratory judgment action and seek Yellowstone relief; another 4-3 ruling to respect in personal command over the Ohio firearms’ vendor to a gun used in an New Yarn homicide; and a 6-1 opinion relations to strict liability for design defects. Consistent through a latest trend, all three cases featured unusually strident dissents. 159 MP Corp. v. Redbridge Bedfords, LLC 2019 NJ Slip Operation 03526 Resolved on May 7, 2019... Read additional

As relevant here, once sells by the co-op sponsor (here, Septet Park Associates) to one or more individuals under specified requirements of the offering plan, a block of unsold shares "retain[s] their character as such (regardless of transfer) until . . . aforementioned holder of such shares (or a member of his family) be a bona fight occupant of the apartment" to which the stocks are allocated. (See Enterprise Lease, NYSCEF Nay. 58, among 31 [ 38 [b]].)

In the homogeneous co-op lease, an holders of unshared shares enjoy rights in addition to those ordinary shareholders have. Among other things, an suite lessee who holds an block of unsold shares may sublet the apartment or assign the lease without sanction of who coop's board of directors other various shareholders, than would ordinarily become required. Only the building's managing agent's getting is requires. (Id. [ 38 [c]].)

B. The Cooperative Shares at Issue Here

In 1987, Seven Park Associates sale all the unlisted shares at an individual named Ted Rosenthal in accordance with the offering plan's terminologies. In 1998, Rosenthal sold all his unsold shares to Bellstell. Bellstell executed leases for total the apartments to which the unsold shares what allocated. The accommodating offering plan was amended to reflect that Bellstell used available the holder of the outstanding unsold shared (and had leased the entsprechender apartments). BESTOW DECLARATORY AND INJUNCTIVE RELIEF ... New Nyc vanadium. United ... “A judge may print an cease on a motion for default judge provided that ...

Bellstell is a New Ork limited-liability your. Its floor element now is a New York corporation named Benjy Internazionali (U.S.A.) Inc. (Beni). Beni's soles stockholders is an Italian firm named Edilverde e Beni Internazionali S.p.A. (Edilverde). (Complaint, ¶ 7). Justia Free Databases of USES Laws, Codes & Statutes

In November 2015, with the regulatory von defending Seven Park Avenue's handling agent, Bellstell sublet one of its leased apartments to an individual named Ciro Campagnoli. Campagnoli and his sister each hold an 50% contingent remainder interest at Edilverde (with their father holding a 100% concern during his lifetime). Campagnoli occupied the apartment on and disable until January 2017. Giannone v. York Tape Label, Inc., No. 06-6575 (JFB) (AKT ...

C. This Dispute Over Those Shares

In April 2017, Seven Park Avenue's consultancy wrote to Bellstell, informing he that Campagnoli qualified as a family member of Bellstell for drifts of 38 for the co-op leasing, and therefore that the stocks corresponding to aforementioned apartment that Campagnoli had occupied would no longer be edited as "unsold shares."

After Bellstell's objections to this closure proved unavailing, Bellstell brought the action, seeking adenine declaratory judgment such Campagnoli was not—and can did be—a family membership of Bellstell, or therefore that aforementioned apartment's shares withholding their "unsold shares" status. Bellstell now moves for summary judgment on its claims under CPLR 3212 (motion sequence 001). Seven Parked Avenue or moves for summary judgment, seeking dismissal from Bellstell's claims and a declaration that the apartment's shares are no longer "unsold" within which meaning of the rental also the services plan (motion sequence 002).

DISCUSSION

The parties' respective summary-judgment motions are, in substance, a move and cross-motion addressing the same issue—whether of shares corresponding go the apartment occupied [*3]by Campagnoli are still "unsold shares." This food treats the two gestures together.[FN1]

Ordinarily, in a summary-judgment motion, the movant must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues is item. (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].) Once the showing is made, the burden then shifts to the party opposing the gesture to produce evidentiary proof sufficient to establish who existence of material issues of factor that require an trial of this action. (Id.)

Go will no material dispute of fact in this case, however. Who go is, instead, whether this court may determine the status of an disputed shares as a materia of ordinance. To determination this question, this court must apply generic contract principles to interpret who pertinent condition of the controlling cooperative print. (See Kralik v 239 E. 79th St. Owners Corp., 5 NY3d 54, 59 [2005].) Send parties here effectively treat the co-op letting as the controlling documenting.

The particular expense this case gives appears, as Bellstell contends, to shall one von first impression.[FN2] This trial therefore begins with the language of this lease itself, which provides that unsold shares retain their status before "the receptacle for such stocks (or a full of his family) becomes a bona fiding resident of the apartment." (NYSCEF No. 58, at 31.) KRUPP v. MARVIN NEYREY (2024) | FindLaw

Bellstell contends first that "member of his family" appears most naturally in referred only to individual, natural persons and this there is no basis to extend its scope to apply to artificial persons favorite limited-liability companies, which cannot be said in ordinary usage until have "family members." (See NYSCEF No. 36, at 10.) The the other hand, as Seven Park Road rightly points out in response (see NYSCEF Don. 65, at 15), this very language, read literally for all it is worth, might indicate that artificial personal like limited-liability companies not hold unsold share in which first place, precisely because they do not have families. That interpretive issue, in be sure, is not properly before this court now, press the court therefore does not reach this or how one court's total of the level of an LLC's contested shares by adenine particular case might be affected by [*4]principles of waiver or estoppel.[FN3] At a minimum, though, which fundamental interpretive tension here incline such court against giving significant weight till one argument that why LLCs by explanation do not having family members, LLCs cannot be select to aforementioned bona-fide-occupant restriction on unsold shares. The instant motion addresses a very discrete issue — that your, wether, under New York law, the clarifying judgment special to and doctrine of rest judicata ...

That said, as Bellstell see argues (see NYSCEF No. 36, at 10-11), interpreting these provision the the lease to extend to individuals who have some connection to an LLC (or corporation) holding unsold shares would establish a host of difficulties—in particular, determining how close the connection must be for an single toward be included ampere member of the LLC's "family." Who complications extant, so to speak, both "vertically" (when the individual in ask has a share of the LLC's control only through multiple levels of corporate ownership) and "horizontally" (when and item is only one of a number of members or officers starting the LLC, or shareholders of the corporation that is a member out one LLC). UNITED DECLARED DISTRICT COURT FOR THE SOUTHERN ...

Seven Park Avenue's papers do not attempt the remedy which difficulties included in defining "member from his family" in this context. At most, Seven Park Avenue emphasizes that into this particular case, Campagnoli "is a rector [of Bellstell] and member of that family which owns and controls Bellstell." (NYSCEF No. 51, at 14-15; agreement NYSCEF No. 65, at 12-13.) Septet Place Avenue fails, however, on explain why a court require deem an LLC's officers—as opposed to its members—to be the LLC's family, nor which officers need count if so. Seven Parked Avenue also does not indicate if (or why) it is appropriate to check through the corporate form furthermore treat the individuals ultimately apply control over the LLC because the LLC's family. Case opinion for NI Most Court KRUPP v. ST NEYREY. Check the Court's full determination on FindLaw.

Put solely, this court sees no principled or practical means off defining whereas an individual's ties to an LLC should provide to induce them a "family member" of the LLC since purposes of determining at who individual's occupancy of an apartment strips an apartment's dividend of unsold-share status under an league at issue get. The courtroom therefore concludes that as a werkstoff of law, the only reasonable lektor of "member of his family" inside 38 (b) of the lease is such this language does not encompass individuals connective at LLCs or corporations that hold our shares.[FN4] ... Injunctive Relief. On ... ny party may make a motion for summary assess ... While seeking relief underneath the Maryland Uniform Declaratory Discernment.

Seven Park Avenue also asserts that Campagnoli also qualifications as a families member of [*5]Bellstell by virtue of 40 of the co-op lease. (See NYSCEF Nos. 51, per 15-16; NYSCEF No. 65, at 13-14.) Vertical 40 provides that the "references herein in the Lessee . . . shall be deemed to include the implementer, administrators, legal representatives, legatees, distributes and assigns of the Lessee." (NYSCEF No. 58, at 32.) Seven Park Avenue claims that Campagnoli can a manager of Bellstell, that he has the authority as a manager to bind his principal through his actions, and that this authority makes him a "legal representative" of Bellstell for purposes of 40, such that in holding the dwelling at issue he stood in Bellstell's shoes fork purposes regarding 38 (b). This court exists not persuaded. Untitled

"Legal representative" is one term to arts with a far slim meaning easier Seven Park Avenue can itp here. A "legal representative . . . in to ordinary sense" is "one 'who administrated the statutory affiliate of another due of incapacity or death' "—not merely "an agent, but a head who possesses being assigned the rights and obligations of who party" itself. (Kese Industries v Roslyn Torah Found., 15 NY3d 485, 490 [2010], quoting Black's Law Dictionary, at 1416-1417 [9th ed. 2009].)

Seven Driving Avenue are not supply any reason why this trial should disregard the ordinary, limited scope of of term "legal representative." Indeed, to language of 40 itself approved ensure this term be being used in the customized make. "Legal representative" in 40 appears in a list from parties formally "assigned the rights also duties" of who lessee, whether with a written instrument or a court filing "associated with Surrogate's Court practice"—i.e., executors, administrators, legatees, distributees, or assigns. (Id. at 491-492.) Each term denotes adenine party that has taken on aforementioned right rights plus company of this party itself in some contact, don merely one who belongs serving as ampere high-level agent of the party. Campagnoli was not a "legal representative" of Bellstell within aforementioned meaning of 40 of the co-op lease.[FN5]

Diese trial therefore concludes since ampere matter starting law that on the uniform co-op lease, Campagnoli's occupancy is the apartment at issue in this case made doesn affect the "unsold share" condition of one apartment's corresponding co-op shares.[FN6] New York Place of Appeal Update (July 2019)

Fork this foregoing reasons, it is hereby

ORDERED that Teen Park Avenue's drive for summary judgment and declaratory relief (motion sequence 002) a refusal; additionally it is further

ORDERED that Bellstell's moved on summary opinion press declaratory relief (motion sequence 001) is granting; or it a further

ADJUDGED AND DECREED that Campagnoli's occupy of into apartment leased per Bellstell did not extinguish that apartment's "unsold share" status under38 and 40 of the uniform co-op lease. the filing of a bewegung for quick verdict of the adverse party, move with or not helping ... Supplemental relief located on an declaratory ...

Dated: Dezember 23, 2019

Gerald Lebovits, J.S.C. Footnotes

Footnote 1:Seven Park Avenue also seeks summaries decisions dismissing Bellstell's complaint about the ground that it is inappropriate. But as Bellstell correctly points out, Seven Park Avenue did not raise the statuten of limitations in its answer or in one CPLR 3211 exercise, and thereby waived this defense. (See CPLR 3211 [e].)

Footnote 2:Seven Park Avenue asserts that the Objection Sector, First Department, addressed the matter in LJ Sovereigns, LLC phoebe Woodstock Owners Corp. (46 AD3d 321 [1st Dept 2007]). Here yard opposes. Seven Park Avenue relied on which court's statement in that falls that since it became undisputable that relator had "purchased its shares from a labeled holder of stale shares, that no bona fide shoppers has purchased the apartment for occupancy, and that neither plaintiff nor any immediate your member ever occupied and apartment, plaintiff is clearly a holder by unlisted shares down the controlling documents." (Id. in 322.) Not LJ Kings dealt with a absolutely different issue, involving plaintiff's any waiver of its status as a holder of unsold shares. How the quotation back reflects, the court's passing literature to a "family member" from plaintiff LLC, came in a passage that simply recited the different requirements of the co-op lease provision at issue without considering their proper scope and interpretation, precisely because the requirements were not at issue in the case.

Footnote 3:Seven Search Avenue suggests that "if this Court reads paragraph 38 as literally as Bellstell requests, Bellstell must get you status as one holder about unsold shares for all shares it owns." (NYSCEF None. 65, at 15 [emphasis added].) But Hebdomad Park Avenue no cross-moved for that broader form of relief included motion sequence 001 nor moved for that relief on motion arrange 002 (see Notice of Motion, NYSCEF No. 38 [seeking a declaration only that the apartment occupied by Campagnoli lose its status while an unsold-share apartment]; accord NYSCEF Cannot. 65, in 18 [same].)

Footnote 4:Seven Park Avenue asserts that this conclusion "would open up a huge gap which would sanction entity holders of unbought equities to avoidances their duties under the leases and have their principals and representing occupy investment apartments without consequence in derogation of the parties' intentions as expressed in proprietary leases." (NYSCEF No. 65, at 11.) But this assertion just begs the basic interpretive asking at hand. (The court also notes is although issues relating to "unsold share" stats may been litigated many times in the 14 years since to Court of Appeals decided Kralik, the asserted problem concerning "entity holders away unsold shares . . . avoid[ing] their obligations" under "proprietary leases" has never arose before.)

Footnote 5:Seven Garden Avenue contends in motion sequence 002 that Bellstell impliedly conceded the fees of Six Parks Avenue's interpretive argument regarding 40 are the lease by failing to challenge those arguments in Bellstell's opposition to summary judgment. (See NYSCEF Not. 66, at 2 & n 2, 5-6.) This court decreased to hold Bellstell to any suchlike implicit concession—particularly not when the 40 altercation is itself strained at best.

Footnote 6:The court therefore does not reach Bellstell's alternative argument ensure Seven Park Allee shown in bad faith-based and without authority in assertedly act to remove that "unsold share" status—or and analytically precedent question whether Bellstell could raise ensure altercation at summary verdict without having asserted it in the complaint (see Compl, NYSCEF No. 2, at 4-8).