Sunken Pond Estates Homeowners Assoc., Inc. v Sunken Pond Estates, Inc.

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Sunken Pond Estates Homeowners Assoc., Inc. v Sunken Pond Estates, Inc. 2012 NY Slip Op 31727(U) June 21, 2012 Supreme Court, Suffolk County Docket Number: 43653-08 Judge: Elizabeth H. Emerson Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FORM ORDER INDEX NO., 43653-08 SUPREME COURT - STATE OF NEW YORK COMMERCIAL DIVISION TRIAL TERM, PART 44 SUFFOLK COUNTY PRESENT: Honorable Elizabeth H. Emerson _________________ x SUNKEN POND ESTATES HOMEOWNERS ASSOCIATION, INC., SUNKEN POND ESTATES CONDOMINIUM MOTION DATE: 1-26-12 SUBMITTED: 2·2-12 MOTION NO.: OOl-MOT Jl 003-1\10'1' D 004-l\10T D; ACAP I, SUNKEN POND ESTATES CONDOMINIUM II and SUNKEN POND ESTATES CONDOMINIUM ill, COHEN & WARREN, P.c. Plaintiffs, Attorneys for Plaintiffs and Third-Party Defendants 80 Maple Avenue Smithtown, New York 11787 -against- SUNKEN POND ESTATES, INC., ROBERT HAVASY, ,JOSEPH FORGlONE and BRIAN FULLERTON, CERTTLMAN BALIN ADLER & HYMAN, LLP Attorneys for Defendants and Third-Party Plaintiffs 100 Motor Parkway, Suite 156 Hauppauge, New York 11788 Defendants. x ----------------~ SUNKEN POND ESTATES, INC., ROBERT HAVASY,JOSEPH FORGIONE and BRIAN FULLERTON, Third-Party Plaintiffs, -against- LUCIA ADRIAN, FREDERICK SCHMIDT, LOUIS MILIA, VINCENT GRASSI, WIDTNEY DOWDALL and RA¥MOND CORRISS, Third-Party Defendants. _________________ x Upon the following paper.~ numbered 1-108 read on these motions for sunlluarv iudgment and cross-motion 10amend ; Notice of Motion and supporting papers 1-21; 38-79 ; Notice of Cross Motion and supporting papers 22-31 ; Answering Affidavits and supporting papers 32-37; 80-97 ; Replying AflidaYits and supporting papers _; Other 98~108 ; it is, [* 2] Index No : 43653-08 Page 2 ORDERED that the defendants' motion for summary judgment is granted to the extent of dismissing the second, fourth, sixth, eighth, and ninth causes of action, and the defendants' motion is otherwise denied; and it is further ORDERED that the branch of the motion by the plaintiffs and the third-party defendants which is for partial summary judgment is denied, and the branch of the same motion which is for dismissal of the third-party action is granted; and it is further ORDERED that the branch of the plaintiffs' cross motion to amend the complaint which is to substitute the respective boards of managers for the plaintiffs Sunken Ponds Estates Condominium I, Sunken Ponds Estates Condominium IT,and Sunken Ponds Estates Condominium nr is granted, and the cross motion is otherwise denied; and it is furthcr ORDERED that the caption shall hereafter read as follows: SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK x SUNKEN POND ESTATES HOMEOWNERS ASSOCIATION, JNC., BOARD OF MANAGERS OF SUNKEN POND ESTATES CONDOMJNIUM [ on behalf of the Condominium and all unit owners, BOARD OF MANAGERS OF SUNKEN POND ESTATES CONDOMINIUM II on behalf of the Condominium and all unit owners, BOARD OF MANAGERS OF SUNKEN POND ESTATES CONDOMJNIUM rrr on behalf of the Condominium and all unit owncrs, Plaintiffs, against SUNKEN POND ESTATES, JNe., ROBERT HAVASY, JOSEPH FORGIONE and BRIAN FULLERTON, Defendants. x. Sunken Pond Estates consists of three related condonllnium developments located in Riverhead, New York, the plaintiffs Sunken Pond Estates Condominium I ("Condo '''), Sunken Pond Estates Condominium II("Condo U"), and Sunken Pond Estatcs Condominium IIJ ("Condo HI"). Although each condominium has its own offering plan, governing documents. and board of [* 3] Index No.: 43653-08 Page 3 managers, they share certain common properties, including roadways, a clubhouse, and a pool. The plaintiff homeowners association (the "HOA") owns and operates such common propcl1ics and is responsible for thelT maintenance and repair. The HOA is also responsihle for the maintenallce and repair of the common elements of each condominium, which include the exterior facades and roofs, among other things. The BOA is a not-for profit corporation govemed by a board of directors. The defendant Sunken Pond Estates, Inc. (the "sponsor"), was the sponsor and developer of Condos I, n, and m. The defendant Robert Havasy was a principal orthe sponsor and served as a sponsor-designated member of the boards ofCendos I, n, and ITI. He also served as a sponsor~dcsignated member of the board of the 1IOA. The defendant Brian Fulfc110n was employed by the sponsor as a project manager and also served as a sponsor~deslgnatecl member of the condo boards and the HOA board. The defendant Joseph Forgione was a principal ortbe sponsor and was named in the offering plans as a sponsor-designated member of the condo and HOA boards. However, he was never a member of any board at Sunken Pond Estates. The sponsor~designated members of the boards of Condos I and ITresigned on January 30, 2004, and the sponsor relinquished control of the board of the BOA in May 2005. The sponsor-designated members of the board 0 r Condo III resigned on June 15, 2005. The plaintiffs commenced this action on December 9, 2008. The amended complaint contains four causes of action against the sponsor for breach of contract and/or breach of warranty; four causes of action against Havasy, Fullerton, and Forgione for breach of fiduciary duty; and onc cause of action to recover reimbursement for additional property taxes paid by the HOA. The gravamen of the complaint is that the defendants failed to construct and complete the common properties and conunon clements of Sunken Pond Estates in confonnance with the offering plans, the plans and specifications filed with the Town of Riverhead, and local standards. Specifically. the plaintiffs allege that the anti-backflow or RPZ devices installed in the condo buildings were improperly installed, that the railings on the front porches were made of spruce or pinc rather than cedar, that many of the roofs leaked, that the windows and the siding were improperly installed, that the asphalt driveways were improperly graded, and that the driveways were constructed with one parking space rather than two, among other things. The first six causes of action asserted by Condos I, II, and ill, respectively, relate to the common elements of Sunken Pond Estates. The seventh and eighth causes of action asserted by the HOA relate to the common properties. The defendants assert a third-party action for indemnification and contribution against six homeowners elected to the condo boards and/or the HOA board. DiscoVCIYis now complete, and the defendants move for summary judgment dismissing the complaint. The plaintiffs oppose the defendants' motion and cross movc for leave to serve and file a second amended complaint. The plaintiffs and the third-party defendants move for partial summary judgment and for dismissal of the third-party complaint. The Second, Fourth, Sixth and Eighth Causes of Action The second, fourth, and sixth causes of action for breach of fiduciary duty arc asserted by Condos I, Il, and III, respectively, against Havasy, Forgione, and Fullerton, [* 4] Index No.: 43653-08 Page 4 collectively. The defendants contend that they are time-barred because the three-year statute of limitations found in CPLR 214 (4) applies to breach-of-fiduciary-duty claims. The plaintiffs. relying on Roslyn Union Free School District v Barken (16 NY3d 643) argue that the six-year limitations period found in CPLR 213 (7) applies. The plaintiffs also argue that the plaintiffs should be estopped fTom asserting the statute of limitations as a defense. New York law docs not provide any single limitations period for breach-ofv Cohen, 307 AD2d 113, 118). Generally, the applic3hle statute of limitations depends upon the substantive remedy sought (Id.). When the relief sought is equitable in nature, the six-year limitations period found in CPLR 213 (1) applies (Id.). On the other hand, when lawsuits alleging a breach of fiduciary duty seek only money damages, courts have viewed such actions as alleging injury to property to which the three-year statute of limitations found in CPLR 214 (4) applies (Id). A claim for breach of fiduciary duty accrues, and the statute of limitations begins to run, upon the date of the alleged breach. The statute of limitations may be tolled while a relationship of trust and confidence exists between the parties (Ciccone v Hersh, 530 F Supp 2d 574, 579, affd 320 Fed Appx 48 [2"' CirJ). In such cases, the statutory period does not begin to run until the fiduciary relationship is openly repudiated or otherwise ended (Steele v Anderson, US Dis! Ct, NDNY, Jan. 8, 2004, Mcavoy, Senior 1. [2004 WL 45527J, ciling Westchester Religious Inst. v Kamcrman, 262 AD2d ] 3]). fiduCI<lry-duty claims (Kaufman The plaintiffs in this case seek only money damages. Therefore, the three-year statute of limitations applies. It began to run when the fiduciary relationship ended, i.e., whcn the sponsor-designated members of the condo boards resigned on January 30, 2004, and June 15. 2005. respectively. The statute oflimitations expired three years later on January 30,2007, and June 15, 2008, respectively. This action was commenced on December 9, 2008. after the statute of limitations had expired. Accordingly, the court finds that the second, fourth, and sixth causes of action are time-barred. Roslyn Union Free Scbool District v Barken (supra), upon which the plaintiffs rely, is limited to its facts. In that case, the Court of Appeals applied the six-year statute of limitations found in CPLR 213 (7) to a breach-of-fiduciary-duty claim by a school district 8gainst a fomlcr member orthe school board who, along with other board members, was allegedly lax in overseeing the school district's finances. CPLR 213 (7) extends the limitations period to six years for an action by or on behal r of a corporation against a present or fanner officer to recover damages for waste or injury to property or for an accounting in conjunction therewith. The issue was whether the schoo] district was a "corporation" within the meaning ofCPLR 2] 3 (7). The Court found that it was because General Construction Law § 65 (a) (1) defines a "corporation" as, inter alia, a "public corporation," which includes a "municipal corporation" under Gcneral Construction Law § 65 (b) (1) and § 66 (1), and a "municipal corporation" expressly embraces a "school district" (General Construction Law § 66 [2J). Because a school district is both a municipal corporation and a public corporation, it falls within the ambit of the term "corporation" in CPLR 213 (7) (Roslyn Union Free School District v Barken, supra at 649). Contrary to the plaintiffs' contention, statutes oflimitation are to be narrowly construed. It IS well settled that a statute of limitations should not be applied to cases not clearly [* 5] Indcx No. 43653-08 Page 5 within its provisions, nor should it be extended by construction (New York Medical & Dia2nostic Center, Inc. v Shah, 941 NYS2d 460, 468 [2012 NY Slip Op 220521. dling American Can Co. v State Tax Commn., 13 AD2d 175, 178). The Court of Appeals in Roslyn Union Free School District v Barken (supra) merely held that a school district qualifies as a corporation within the meaning of CPLR 213 (7) by referencing the General Construction Law. The Court's holding was based on a straighforward statutory analysis oftenns found 10 General Construction Law 65 and defined in General Construction Law § 66. The term "condominium" does not appear in either General Construction Law § 65 or § 66, nor is it defined in the Condominium Act (see, Real Property Law § 339-e). A condominium, unlike a corporation, is not an entity recognized at law. It is simply a method for describing a form of ownership of property in which the participants own individual units in a multiple unit building (see, Board of Managers of Plaza 230 v Reuss, NYLJ, Oct. 28, 1992, al25, col 5 [1992 WL 12664261]). Since a condominium is not a corporation, the court declines to apply the six-year statute of limitations found in CPLR 213 (7) to the second, fourth, and sixth causes of action for breach of fiduciary duty. Accordingly, lhey are time-barred. * The plaintiffs contend that the defendants should be estopped fTom asserting the statute of limitations as a defense. New York courts have long had the power to preclude a defendant from using the statute oflimitations as a defense when the defendant's affinnative wrongdoing has produced a long delay bern'een the accrual of the cause of action and the institution of the legal proceeding (Costello v VerizoD, N.Y., Inc., 77 AD3d 344, 367, mod 18 NY3d 777). A defendant may be estopped from pleading the statute of limitations when the plmlltiffwas induced by fraud, misrepresentations, or deception to refrain fro111filing a timely action (Id.). Courts may also look to whether the defendant engaged in conduct that was calculated to mislead the plaintiff and whether the plaintiff, in reliance thereon, failed to commence a timely action (Id.). When a plaintiff claims that a defendant should be equitably estopped from asserting a statute of limitations, the plaintiff must show due diligence in bringing the action (Zumpano v Quinn, 6 NY3d 666, 683). Due diligence means thatthc plaintiff must seck to bring an action against the defendant as soon as the plaintiff learns of the misrepresentation (Id.). The record reveals that the sponsor repaired and corrected some orlhe conditions of which the plaintiffs complained. The plaintiffs contend that, although the sponsor continued to express a willingness to make repairs in response to their demands, the sponsor stopped performing remediation work and was in complete breach of its obligation to correct constnlction defects by the spring of2007. In a letter dated March 26, 2007, the HOA advised Havasy that no warranty work was being done, despite the fact that problems continued to exist, and that the HOA expected the sponsor to honor its warranties. Havasy responded by a letter dated April 9, 2007, in which he advised the HOA that his review of the closing dates for the units that had recently been subm.itted for warranty work revealed that all of the units were past the one-year wamll1ty period, that a number of units were approaching four years' occupancy, and that some [* 6] Index No : 43653-08 Page 6 were at the end of their second year of occupancyl. He advised the HOA that, notwithstanding the formal warranty periods, the sponsor had continued to work with homeowners well past the initial one-year warranty period, but that the sponsor's willingness to make repairs beyond the fannal warranty period "should not be confused with our obligation to do same." According to the plaintiffs, what followed was a long series of correspondence between the parties regarding ongoing defects in the community and the sponsor's refusal to correct them. The plaintiff . ¢ retained the services of an engineer in 2007 to inspect and report on the quality of the construction. The engineer issued three reports in November 2007. The plaintiffs commenced this action on December 9, 2008. 111estatute of limitations expired on the plaintiffs' breach-of-fidueiary-duty claims for Condos I and II on January 30, 2007. The plaintiffs do not allege, nor have they produced any evidence, that the defendants engaged in deceptive conduct or made specific misrepresentations prior to January 30,2007. The plaintiffs merely contend that the defendants obviously cooperated in the correction of defects in order to avoid litigation. The court finds that this conclusory assertion is insufficient to establish that the defendants' cooperation was calculated to mislead the plaintiffs or to induce them to postpone bringing suit and that the defendants wcre not simply fulfilling their contractual obligations. Accordingly, the court declines to estop the defendants from asserting the statute of limitations as a defense to the second and fourth causes of action. The statute of limitations on the plaintiffs' breach-of-fiduciary-duty claim for Condo nr expired on June 15,2008. The court finds that the plaintiffs had sufficient knowledge to cOlllmence an aclion based on the defendants' failure to honor the warranlles and to make repairs as early as the spring 0[2007. The plaintiffs acknowledge that the defendants were in complete breach of their obligation to make repairs by the spring of2007. The record reflects that the plaintiffs continued to notify the defendants of defective conditions and that the sponsor continued to make only those repairs that it considered its responsibility. While the plaintiffs tried to get the sponsor to make additional repairs or to pay for repairs that the sponsor did not consider its responsibility, the plaintiffs have failed to establish any specific misrepresentations 10 them by the defendants or any deceptive conduct sufficient to constitute a basis for equitable estoppel. Moreover, by waiting until December 9, 2008, to commence this action, the plaintiffs failed to exercise due diligence in bringing the action. Accordingly, court declines to estop the defendants from asserting the statute of limitations as a defense to the sixth cause of action. The eighth cause of action for breach of fiduciary duty is asserted by the HOA, which is a not-far-profit corporation. A not-for-profit corporation is classified as a corporation in General Constmction Law § 65 and defined in General Construction Law § 66. Under Roslyn Union Free School District v Barken (supra), it is a "corporation" within the meaning ofCPLR 21J (7), and the six-year statute of limitations found therein applles. Accordingly, the eighth lThc warranty periods are one year for basic coverage, two years for major systems sllch as electrical and plumbing, and six years for major structural defects beginning on the date that the purchaser first occupies the home or the date of delivery of the deed, whichever occurs first. [* 7] Inclex No.: 43653-08 Page 7 cause of action is not time-barred. Under New York law, in order to establish a breach of fiduciary duly, a plaintiff must prove the existence of a fiduciary duly, which the defendant breached, resulting in damages (JFK Family Ltd. Partnership v Millbrae Natural Gas Dev. Fund, 89 AD3d 684, 685). A fiduciary breaches his duty when he acts in bad faith for his own personal benefit (Id.; Lirosi v Elkins, 89 AD2d 903. 906; see also, Kurtzmau v Bergstol, 40 AD3d 588. 590). As the defendants correctly contend, the record docs not reflect that Havasy, Forgione, or Fullerton engaged in willful misconduct for their own personal benefit as members of the HOA and condo boards (JFK Family Ltd. Partnership, supra). The plaintiffs contend that Havasy, Forgoinc, and Fullerton were principals and/or agents of the sponsor and that they breached their fiduciary duties as members of the HOA and condo boards by failing to act in a way that would have caused the sponsor to remedy defects, thereby increasing their share ofthc profits. It is undisputed that Forgione was never a member of any board at Sunken Pond Estates. Fullerton was employed by the sponsor as a project manager, and he was a member of the HOA and condo boards. However, the record does not reflect that he was a principal of the sponsor or that he would have shared in the sponsor's profits. Only Havasy was both a principal of the sponsor and a member of the HOA and condo boards. Absent an allegation of independently torilOus conduct, Havasy cannot be held liable for breach of fiduciary duty (8crenger v 261 West LLC, 93 AD3d 175, 185). The plaintiffs make no such allegation, and their contention that Havasy failed to remedy defects in order to increase his share of the sponsor's profits is entirely speculative. The business judgment rule protects individual board members from being held liable for decisions, such as those concerning the manner and extent of repairs that arc within the scope of their authority (Id. at 184). The record does not reflect, nor do the plaintiffs contend, that decisions concerning repairs and remediation work were outside the scope of the individual defendants' authority as members of the ROA and condo boards. Their decisions arc, therefore, shielded from judicial review (Id. at 185). Accordingly, the eighth cause of action is dismissed. In sum, the court finds that the second, fourth, and sixth causes of action are time barred. The court also finds that the defendants' have established, prima facie, their entitlement to judgment as a matter of law on the eighth cause of action and that the plaintiffs have fuilcd to r3lSCa triable issue of fact in opposition thereto. Accordingly, the defendants' motion for summary judgment is granted to the extent of dismissing the second, fourth, sixth, and eighth causes of action; the branch of the motion by the plaintiffs and the third-party defendants which is for partial summary judgment on those causes ofaetion insofar as they are asserted against Havasy is denied; and the branch of the plaintiffs' cross motion which is for leave to serve and tile a second amended complaint is denied insofar as the plaintiffs seek to amend the eighth cause of action to include defective conditions of the common elements as well as the common properties of Sunken Ponds Estates. [* 8] Index Nn : 43653-08 Page 8 The First, Third. Fifth, and Seventh Causes of Action The first, third, and fifth causes ofactio11 are asserted by Condos I, 11,and HI respectively, against the sponsor for its alleged failure to construct and complete the common clements of Sunken Pond Estates in conformance with the offering plans, the plans and specifications filed with the Town of Riverhead, and local standards. The seventh calise of action is asserted by the BOA against the sponsor for the same alleged failure. The defendants seek to dismiss the first, third, and fifth causes of action on the grounds that Condos 1, IT,and lIT arc not proper plaintiffs and that, pursuant to Real Propcl1y Law o 339-dd, this action should have been brought by the boards of managers or Condos L II, and III. The plaillti rls oppose dismissal on such grounds and cross move to amend the complaint, inter alia, to substitute the respective boards ofmanagers for Condos I, II, and rn. CPLR 3025 (b) provides that leave to amend a pleading "shall be freely given upon such temlS as may be just. '. Thus, motions for leave to amend are to be liberally granted absent prejudice or surprise resulting directly fTOmthe delay in seeking the amendment (Vista Properties, LLC v Rockland Ear, Nose & Throat Assocs., P.c., 60 AD3d 846, 847; Mackenzie v Croce, 54 AD3d 825, 826). Mere lateness is not a barrier to an amendment. It must be lateness coupled with significant prejudice to the other side, the very elements of the latches doctrine (Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959; Abdelnahi v New York City Transit Auth., 273 AD2d 114, 115). There must be some indication that the defendants have been hindered in the preparation of their case or prevented from taking some measure in support of their position (L.oomis v Civetta Corinno Constr. Corp., 54 NY2d 18, 23; Abdelnabi v New York City Transit Auth., supra at 115). The defendants' conclusory assertion that the proposed amendment IS unfair because it is made almost on the eve of tnal and will cause unreasonable expense and delay ifit leads to additional discovery is insufficient to make such a showing. Accordingly, the branch of the defendants' motion which is to dismiss the rirst, third, and fifth causes of action on the grounds that Condos I, II, and Iff are not proper plaintiffs is denied, and the branch of the plaintiffs' cross motion whieh is to amend the complaint to suhstitute the respective boards of managers for Condos I, II, and m is granted. The defendants seek dismissal of the first, third, fifth, and seventh causes of action to the extent that they assert breach-of-warranty claims. The defendants contend that the plaintiffs failed to comply with the notice requirements of, and conditions precedent to. the limited warranty found in the offering plans. The defendants contend that the plaintiffs failed to give the sponsor timely notice ofthelT claims, that they failed to give the sponsor an opportunity to inspect and cure the alleged defects, and that they failed to follow the step-by-step claims procedure. The offering plans provide that the limited warranty is given by the sponsor to the purchasers of new homes at Sunken Ponds Estates. The offering plans also provide that, to the extent that coverage under the limited warranty applies to the common elements of the condominium or the common arcas of the HOA, such coverage is given to the board of managers of the condominium or the board of directors of the HOA. The wan-anty covering the common elements and common areas is not subject to the same time limitations and notice requirements as [* 9] [ndex No.: 43653-08 Pagc 9 the warranty associated with the individual units or homes (see, Board of Directors of the Maidstone Landing Homeowners Assoc., Inc. v Maidstonc Landing, LLC., Sup. Ct . ¢ NY County, April 9, 2012, Shulman, J. [2012 WL 1360935], at 4,8). Accordingly the defendants' reliance on the time limitations and notice requirements ofthe warranty for the individual units or homes is misplaced. The offering plans provide that the sponsor will correct any defects in the construction of the common elements or common areas, or in the installation or operation of any mechanical equipment therein, due to improper workmanship or materials substantially at variance with the offering plans provided and on the condition that the sponsor is noti lied of or becomes aware of such defects within 12 months from the date of substantial completion of the defective portions of the common elements and/or conunon areas. The record does not reflect when the common elements and common areas were substantially completed, and there are questions of fact as to when the sponsor was notified of, or became aware of, the alleged defects. Accordingly, the court declines to dismiss the first, third, fifth, and seventh causes of action insofar as they assert breach-of-warranty claims The defendants seek dismissal of the first, third, fifth, and seventh causes or action to the extent that they assert breach-of-contract claims. The defendants contend that, since the plainti rfs never signed any purchase agreements, they do not have privity of contract with the sponsor. The plaintiffs also contend that there is no private right of action for failing to comply with the huilding code. The court has granted the plaintiffs leave to amend the complaint to substitute the boards of Condos I, II, and III for the plaintiff condominiums. Pursuant to Real Property Law & 339-dd, the boards of Condos T, 11,and ill may bring any cause of action relating to the comlllon clements or morc than one unit (see, Tiffany at Westburn Condominium v MareHi Dev. Corp., 40 AD3d 1073, 1074). Moreover, the relationship between the sponsor and the HOA is established by the offering plan (see, Hamlet on Olde Oyster Bay Home Owners Assn., Inc. v Holiday Org., Inc .. 12 Misc 3d 1I82 [A] at * 12, affd 65 AD3d 1284), which is a contract (see, 511 W. 232"" Owners Corp. v Jennifer Realty Co., 285 AD2d 244, 247, affd in pari 98 NY2d [44). Thus, the plamtiffs may assert breach-of-contract claims against the sponsor. Contrary to the defendants' contention, the plaintiffs are not seeking to enforce the building code. The first, third, fifth, and seventh causes of action are based on the sponsor's alleged failure to construct Sunken Ponds Estates in conformance with the offering plan, the plans ond specifications filed with the Town of Riverhead, and local standards. The offering plan provides that the homes and common elements will be substantially constructed in the manner set forth in lhc budding plans filed with the Town of Riverhead. The offering plan also provides that the homes, buildings and other improvements will comply with all applicable rules, regulations, laws, and other requirements of all governmental authorities having jurisdiction lIlc1uuing, but not limited to, the building eode of the Town of Riverhead. Accordingly, the court finds 1hat the plallltitTs may mal11tam the first, third, fifth, and seventh causes of action insofar as they assert breach-of-contract clmms against the sponsor for its alleged failure to comply with the offering plan. [* 10] Index No.: 43653-08 Page 10 Finally, triable issues of fact preclude the granting of summary the plaintiffs or the defendants on the merits. Accordingly. the defendants' judgment dismissing the amended complaint judgment to either motion for summary is denied as to the first, third, fifth, and seventh causes of action, and the branch of the motion by the plaintiffs and the third-party defendants which is for pal1ial summary judgment on the first, fifth, and seventh causes of action is denied. The Ninth Cause of Action property taxes paid by the 1-I0A in 2005 and 2006 due to the sponsor's use of one lot for a sales traiier. Both sides move for summary judgment on this cause of action. The ninth cause of action seeks to recover reimbursement for additional Contrary to the plaintiffs' contention, the offering plans specifically reserve to the sponsor the right to continue to LIsethe common elements of the condominium and the common areas of the HOA, without charge, in its efforts to market homes and for exhibitions or other promotional functions until all orthe homes in the development have been sold. It is undispuled that the sales trailer was removed from the premises on May 5,2005, several months before the last home was sold on December 7, 2005. Accordingly, the defendants' motion for summary judgment is granted to the extent of dismissing the ninth cause of action, and the branch of the plaintiffs' motion which is for summary judgment on the ninth cause of action is dcmcd. The Third-Party Action The defendants concede that the third~party complaint should be dismissed if the second. fourth, and sixth, and eighth causes of action are dismissed. The second, fourth, sixth, and eighth causes of action have been dismissed (see, supra). Accordingly, the branch of the motion by the plaintiffs and the third-party defendants which is for dismissal of the third-party action is granted. Conclusion In sum, the defendants' motion for summary judgment is granted lo the extent of dismissing the second, fourth, sixth, eighth, and ninth causes of action, and the defendants' motion is otherwise denied. The branch of the motion by the plaintiffs and the third-party defendants which is for partial summary judgment is denied, and the branch of the same motion which is for dismissal of the third-party action is granted. The branch of the plaintiff.<;' cross motion to amend the complaint which is to substitute the respective boards of managers for Condos J, II, and TlJ is granted, and the cross motion is otherwise denied. Dated: June 21, 2012 J.S.c.

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