Supreme Court of New York Denies Motion in all but One Cause of Action in Kikirov v. 355 Realty Assoc., et al.
April 28, 2011 —
Beverley BevenFlorez CDJ STAFFIn the construction defect suit Kikirov v. 355 Realty Associates, LLC, et al., the Supreme Court of the State of New York granted a dismissal of the plaintiff’s fourth cause of action, but denied the defendants’ motion in all other respects. The plaintiff alleged breach of contract, among other claims. “355 Realty was the sponsor of 355 Kings Highway Condominium, a condominium project located at 355 Kings Highway, in Brooklyn, New York. The condominium units were allegedly marketed as ‘ultra luxury condos,’ and a ‘Manhattan style condominium building,’ which would be the ‘epitome of luxury and quality.’ The construction of the six-story 28 unit residential condominium building began in approximately November 2003. […] Plaintiff entered into a purchase agreement, dated December 21, 2005, with 355 Realty (which was executed on behalf of 355 Realty by Michael Marino, as its member) for the purchase of Unit 2G in the building.”
The plaintiff alleged that construction defects emerged soon after moving into the unit: “After taking occupancy of his condominium unit, plaintiff allegedly experienced serious leakage and moisture problems in his unit, which caused a dangerous mold condition to develop, in addition to causing actual damage to the structural elements of his unit. According to plaintiff, the walls, moldings, and wood floors of his unit are constantly wet and moist, and there is severe buckling of the wood floors. Plaintiff claims that these problems have caused his unit to be uninhabitable. Plaintiff alleges that he has been forced to remove all of his personal belongings from his unit and has been unable to occupy his unit.”
According to the plaintiff, Foremost attempted to repair the defects, but only made the situation worse: “Specifically, plaintiff asserts that Foremost’s contractors opened his walls to remove the stained drywall, but never corrected the cause of the leaks, destroyed the walls, and never properly taped and painted the sheet rock. Plaintiff alleges that Foremost repaired the openings in a defective manner. Plaintiff also claims that his floor was repaired at that time by a subcontractor hired by Foremost, but the basic structural problem was never resolved and the leaks continued, compromising the beams and causing the mold conditions, in addition to all of the physical damage present in the unit. On or about July 16, 2009, plaintiff allegedly sent a notice of the defects to 355 Realty and to the managing agent designated by the condominium board, by certified mail, return receipt requested. Plaintiff asserts that defendants have failed and refused to repair and remedy the defective condition, and that the damage is extensive and requires major structural repairs.”
The plaintiff filed suit on May 4, 2010, and the original complaint asserted eight causes of action. “By decision and order dated September 13, 2010, the court granted a motion by defendants to dismiss plaintiff’s second cause of action for breach of implied covenants of good faith and fair dealing, his third cause of action for breach of implied warranties, his fifth cause of action for negligence as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his seventh cause of action for negligence as against Vision, Foremost, and MMJ, and his eighth cause of action for violations of General Business Law § 349 and § 350, and granted plaintiff leave to replead his first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, his fourth cause of action for breach of statutory warranties, and his sixth cause of action for breach of contract as against Vision, Foremost, and MMJ.”
The plaintiff amended their complaint on October 18, 2010, and “has repleaded these three causes of action by asserting a first cause of action for breach of contract as against 355 Realty, Michael Marino, Anthony Piscione, Ahron Hersh, and Toby Hersh, a second cause of action for breach of statutory warranties, and a third cause of action for breach of contract as against Vision, Foremost, and MMJ. In addition, plaintiff, in his amended complaint, has added a fourth cause of action for fraud.”
The defendants, on the other hand, “argue that each of the four causes of action alleged by plaintiff in his amended complaint fail to state a claim upon which relief may be granted, and that plaintiff’s amended complaint must be dismissed pursuant to CPLR 3211 (a) (7). Defendants also cite to CPLR 3211 (a) (1), and (5), asserting that dismissal is also required based upon documentary evidence and the Statute of Limitations contained in the limited warranty.” The defendants’ motion to dismiss the first cause of action, breach of contract against 355 Realty, was denied: “While defendants dispute that the alleged defects are actually structural in nature, plaintiff’s allegations as to their structural nature are sufficient, at this juncture, to withstand defendants’ motion to dismiss. Thus, dismissal of plaintiff’s first cause of action must be denied.”
Next, the court reviewed the second cause of action, which was breach of statutory warranties: “Defendants’ motion also seeks dismissal of plaintiff’s second cause of action for breach of statutory warranties, which alleges that, under applicable law, including General Business Law § 777-a, et seq., the sponsor warranted to purchasers of units that the units would be constructed in a skillful, careful, and workmanlike manner, consistent with proper design, engineering, and construction standards and practices, and free of material latent, design, and structural defects. Defendants argue that General Business Law § 777-a, known as the housing merchant implied warranty, is inapplicable to this case because it is limited to the construction of a ‘new home,’ defined in General Business Law § 777 (5) as ‘any single family house or for-sale unit in a multi-unit residential structure of five stories or less.’ As noted above, the building in which plaintiff’s condominium unit is located is a six-story building.”
The motion to dismiss the second cause of action is denied. The court provided this reasoning: “the full text of the offering plan has not been provided, the court is unable to examine the entire written agreement so as to determine the purpose of the inclusion of the text of General Business Law § 777.”
In the third cause of action, the plaintiff alleges “a breach of contract claim as against Vision, Foremost, and MMJ based upon their contract with 355 Realty, pursuant to which they agreed to be the general contractors/construction managers for the condominium, to undertake oversight responsibility for the design and construction of the condominium, to prepare and/or review drawings, plans, and specifications for the condominium, and to otherwise manage and oversee the project. Plaintiff alleges that Vision, Foremost, and MMJ breached their contractual obligations in that the condominium units were improperly and inadequately designed and constructed, and completed in an incompetent and unworkmanlike manner, with material design and construction defects.”
The motion to dismiss the third cause of action was denied as well: “Plaintiff alleges, in his amended complaint, that Vision, Foremost, and MMJ have acknowledged notice of the defects and have not denied that they are responsible for providing a warranty to plaintiff. Plaintiff also refers to this warranty, in his amended complaint, by noting that paragraph 16 of the purchase agreement stated that the ‘[s]eller shall not be liable to . . . the [p]urchaser for any matter as to which an assignable warranty . . . has been assigned . . . to [p]urchaser and in such case the sole recourse of such . . . [p]urchaser . . . shall be against the warrantor . . . except that in the event a contractor or subcontractor is financially unable or refuses to perform its warranty . . . [s]eller shall not be excused from its obligations enumerated in the [offering p]lan under Rights and Obligations of Sponsor.’ Consequently, the court finds that dismissal of plaintiff’s third cause of action as against Foremost and MMJ must also be denied.”
In the fourth cause of action, the plaintiff alleges “that defendants made false statements and representations orally, in advertisements, and in the purchase agreement, that the condominium was properly and adequately designed and constructed and completed in a competent and workmanlike manner, in accordance with the condominium plans and specifications and proper design, engineering, and construction standards and practices consistent with applicable standards for a first class, luxury condominium in Brooklyn.”
The court dismissed the fourth cause of action stating, “it must be dismissed because it is duplicative of his first cause of action for breach of contract.” Therefore, “defendants’ motion to dismiss plaintiff’s amended complaint is granted to the extent that it seeks dismissal of plaintiff’s fourth cause of action, and it is denied in all other respects.”
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NEHRP Recommendations Likely To Improve Seismic Design
November 09, 2020 —
Nadine M. Post - Engineering News-RecordCode-based earthquake engineering is on the verge of getting simpler, thanks to the National Earthquake Hazards Reduction Program’s recommendation to replace the traditional seismic hazard maps with an improved seismic hazards database. The recommendation is one of the most significant changes put forth in the 2020 update of the NEHRP seismic design provisions, which are the foundation for the prescriptive seismic design code for buildings and other structures.
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Nadine M. Post, Engineering News-Record
Ms. Post may be contacted at postn@enr.com
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Insurance Policies Broadly Defining “Suits” May Prompt an Insurer’s Duty to Defend and Indemnify During the Chapter 558 Pre-Suit Notice Process
May 30, 2018 —
Daniel Garcia - Gordon & Rees Construction Law BlogIn Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Company, No. SC16-1420, 2017 WL 6379535 (Fla. Dec. 14, 2017), the Florida Supreme Court addressed whether the notice and repair process set forth in chapter 558, Florida Statutes, constitutes a “suit” within the meaning of a commercial liability policy issued by Crum & Forster Specialty Insurance Company (“C&F”) to Altman Contractors, Inc. (“Altman”). The Court found that because the chapter 558 pre-suit process is an “alternative dispute resolution proceeding” as included in the definition of “suit” in the policy by C&F to Altman, C&F had a duty to defend Altman during the chapter 558 process, prior to the filing of a formal lawsuit.
Chapter 558, titled “Construction Defects,” sets forth procedural requirements before a claimant may file a construction defect action. It requires a claimant to serve a written notice of claim on the applicable contractor, subcontractor, supplier, and/or design professional prior to filing a construction defect lawsuit. The legislature intended for Chapter 558 to be an alternative dispute resolution mechanism in certain construction defect matters allowing an opportunity to resolve the claim without further legal process.
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Daniel Garcia, Gordon & Rees Scully MansukhaniMr. Garcia may be contacted at
daniel.garcia@grsm.com
Summary Findings of the Fourth National Climate Assessment
January 02, 2019 —
Anthony B. Cavender - Gravel2GavelOn November 23, the latest National Climate Assessment, Fourth National Climate Assessment (NCA4), was released by the U.S. Global Research Program, as required by the Clean Air Act. The Assessment, comprising three volumes and 1600 pages, contains some rather bleak findings which the Report usefully summarizes. Here’s a description of these findings.
1.
Communities. The report states that “climate change creates new risks and exacerbates existing vulnerabilities in communities across the United States.” In particular, “more frequent and intense extreme weather and climate-related events” will continue to damage infrastructure , ecosystems and social systems. However, “global action” to significantly cut greenhouse gas emissions can substantially reduce these risks.
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Anthony B. Cavender, PillsburyMr. Cavender may be contacted at
anthony.cavender@pillsburylaw.com
Consequential Damages From Subcontractor's Faulty Work Constitutes "Property Damage" and An "Occurrence"
September 03, 2015 —
Tred R. Eyerly – Insurance Law HawaiiThe New Jersey appellate court found that the unintended and unexpected consequential damages caused by the subcontractor's defective work constituted "property damage" and an "occurrence." Cypress Point Condo. Ass'n v. Adria Towers, L.L.C., 2015 WL 4111890 (N.J. Super. Ct. App. Div. July 9, 2015).
The insured developer hired subcontractors to perform all of the construction work at a condominium project. The subcontractors failed to properly install the roof, flashing, gutters and leaders, brick and EIFS facade, windows, doors and sealants. The AOAO sued the developer, who served as the general contractor, its insurers, and various subcontractors.The AOAO conceded that replacement costs did not constitute "property damage" and an "occurrence" under the policy.
The faulty workmanship, however, also caused consequential damages to the common areas and unit owners' property, including damage to steel supports, exterior sheathing and interior sheathing and sheetrock, insulation and other interior areas of the building. Nevertheless, the trial judge determined there was no property damage or "occurrence", and granted summary judgment to the insurers.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
Construction Industry Survey Says Optimism Hits All-Time High
March 26, 2014 —
Beverley BevenFlorez-CDJ STAFFThe Nashville Business Journal reported that “construction optimism has been growing exponentially since it hit an all-time low in 2009.” Furthermore, “Wells Fargo's 2014 Construction Industry Forecast saw the Optimism Quotient rise to an all-time high of 124 after a survey that was performed in January.”
Reasons for the rise, according to Wells Fargo National Sales Manager John Crum, include “more capital available from banks, more public jobs and state and local governments being able to shore up their money supplies,” as quoted by the Nashville Business Journal.
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Colorado’s New Construction Defect Law Takes Effect in September: What You Need to Know
November 21, 2017 —
Jesse Witt - The Witt Law FirmOriginally published by CDJ on September 7, 2017
Colorado’s new construction defect law officially takes effect this month. Although HB 17-1279 was passed in May, the statutory text provides that it only applies “with respect to events and circumstances occurring on or after September 1, 2017.” With that date now upon us, practitioners should be mindful of the law’s new requirements.
The law applies to any lawsuit wherein a homeowner association files a construction defect action on behalf of two or more of its members. “Construction defect action” is defined broadly to include any claims against construction professionals relating to deficiencies in design or construction of real property. Before an association may commence such an action, its board must follow several steps.
First, the board must deliver notice of the potential construction defect action to all homeowners and the affected construction professionals at their last known addresses. This requirement does not apply to construction professionals identified after the notice has been mailed, or to construction professionals joined in a previously-approved lawsuit. The notice must include a description of the alleged construction defects with reasonable specificity, the relief sought, a good-faith estimate of the benefits and risks involved, and a list of mandatory disclosures concerning assessments, attorney fees, and the marketability of units affected by construction defects. The notice must also call a meeting of all homeowners. The notice should be sent to the construction professionals at least five days before the homeowners.
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Jesse Howard Witt, Acerbic Witt
Mr. Witt may be contacted at www.witt.law
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Low Interest Rates Encourages Homeowners to become Landlords
June 18, 2014 —
Beverley BevenFlorez-CDJ STAFFCNN Money reported that more homeowners are deciding to keep their homes rather than sell, and become landlords instead. "Clients tell us all the time, 'We're never going to sell our home, even after we buy a new one,'" Glenn Kelman, CEO of the brokerage, Redfin, told CNN Money.
“The math works in most landlords' favor these days,” according to CNN Money. “Rents have risen by about 20% nationwide since mid-2006, the housing bubble peak, while home prices are still about 21% below what they were at that time.”
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