| 85 Fifth Ave. 4th Floor, LLC v I.A. Selig, LLC |
| 2007 NY Slip Op 08744 [45 AD3d 349] |
| November 13, 2007 |
| Appellate Division, First Department |
| 85 Fifth Ave. 4th Floor, LLC, Appellant, v I.A. Selig, LLC,et al., Respondents, et al., Defendants. |
—[*1] Krass, Snow & Schmutter, P.C., New York City (Eric Lesser of counsel), for I.A. Selig,LLC, respondent. Cantor, Epstein & Degenshein, LLP, New York City (Robert I. Cantor of counsel), for IanSelig, respondent. Braverman & Associates, P.C., New York City (Andreas E. Theodosiou of counsel), for TheOld Glory Real Estate Corporation, Michael Salzhauer, Robert Mannheimer, Jaime Inclan,Claudia Catania and D. Nardone, respondents.
Order, Supreme Court, New York County (Emily Jane Goodman, J.), entered October 10,2006, which denied plaintiff's motion for a preliminary injunction, vacated a temporaryrestraining order, and granted motions by defendants to dismiss the complaint, unanimouslymodified, on the law, to reinstate the first, fourth and sixth causes of action, and otherwiseaffirmed, without costs. Appeal from order, same court and Justice, entered March 26, 2007,which, insofar as appealable, denied plaintiff's motion to renew, unanimously dismissed asacademic, without costs.
Plaintiff purchaser alleges that the board, of which defendant seller's principal was a member,rejected plaintiff's application to purchase the subject cooperative unit and contemporaneouslyamended the cooperative's bylaws to provide for the possibility of a residential conversion thatwould increase the market value of the unit. This states a cause of action against the seller forbreach of contract based on a violation of the covenant of good faith and fair dealing, and weaccordingly reinstate the first cause of action (see 511 W. 232nd Owners Corp. v JenniferRealty Co., 98 NY2d 144, 153 [2002]; cf. Matter of Y & O Holdings [NY] v Board ofMgrs. of Exec. Plaza Condominium, 278 AD2d 173, 174 [2000]). However, as the impliedduty arises from the contract, there is no reason to reinstate the separately pleaded cause of actionfor breach of the implied duty.[*2]
Plaintiff does not, however, have a cause of action forbreach of contract against the cooperative. That plaintiff, who alleges that the board unreasonablywithheld its consent to the sale in breach of the lease, is not a third-party beneficiary of the leasewith standing to assert such a breach is clear from the lease itself, which permits only a seller tobring an action challenging the withholding of consent (and then only a declaratory judgmentaction, not a breach of contract action), as well as from case law (see Woo v Irving TenantsCorp., 276 AD2d 380 [2000]). However, we reject the arguments of the individual boardmembers that the fourth cause of action for tortious interference with contract should bedismissed on the ground that plaintiffs' contract with the seller was not breached and because theactions alleged to have interfered with the contract were specifically contemplated by thecontract. We note that although the complaint does not allege that the board member defendantsintentionally procured the seller's breach (see Lama Holding Co. v Smith Barney, 88NY2d 413, 425 [1996]), no contention was made on the motion to dismiss or on this appeal thatthis cause of action is defective for this reason, and we will not dismiss it nostra sponte on thisground (see Roland Pietropaoli Trucking v Nationwide Mut. Ins. Co., 100 AD2d 680,680-681 [1984]). Restatement of the first and fourth causes of action entails reinstatement of thesixth cause of action for an injunction directing the seller and the board to transfer the shares andproprietary lease. Whether the business judgment rule will protect the board's members cannot bedecided at this juncture (cf. Pelton v 77Park Ave. Condominium, 38 AD3d 1, 10 [2006]). Plaintiff's fifth cause of action wasproperly dismissed since New York does not recognize civil conspiracy as an independent causeof action (Steier v Schreiber, 25AD3d 519 [2006]). Concur—Mazzarelli, J.P., Marlow, Sullivan, Gonzalez andMcGuire, JJ. [See 14 Misc 3d 1219(A), 2006 NY Slip Op 52542(U).]