Katz v Third Colony Corp.

Katz v Third Colony Corp. 2012 NY Slip Op 09182 Decided on December 27, 2012 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on December 27, 2012
Mazzarelli, J.P., Moskowitz, DeGrasse, Manzanet-Daniels, Clark, JJ.
8913 11062/11

[*1]Robert Katz, et al., Plaintiffs-Appellants,

v

Third Colony Corporation, Defendant-Respondent.




Zuckerman Spaeder LLP, New York (C. Evan Stewart of
counsel), for appellants.
Braverman & Associates, P.C., New York (Tracy M. Peterson
of counsel), for respondent.

Order, Supreme Court, New York County (Anil C. Singh, J.), entered April 19, 2012, which granted defendant's motion for summary judgment dismissing the complaint with prejudice, and denied plaintiffs' cross motion for partial summary judgment as moot, unanimously affirmed, with costs.

Defendant is a cooperative corporation that owns a building at 180 East 79th Street, New York County, and plaintiffs formerly owned the shares to apartments 14B and 14C. In August 2011, plaintiffs sold their interest in the two apartments and, under protest, paid a "flip tax" to defendant. Within weeks, plaintiffs commenced this action alleging one cause of action the characterization of which is in dispute. That portion of plaintiffs' complaint that specified the sole cause of action explicitly and repeatedly alleges that defendant acted "ultra vires," which plaintiffs argued below. Now, however, in an attempt to make their claim appear viable, plaintiffs avoid characterizing their claim as seeking to prohibit defendants' ultra vires acts, and instead, they repeatedly characterize their claim as one "for money damages" or an "extraction of money" that was "wrongful," seeking a money judgment in the amount of the flip tax.

Supreme Court properly granted defendant's motion because plaintiffs' claim, despite their current characterization, is barred by the statute of limitations. Defendant's allegedly ultra vires acts occurred in 1997 and in 2008 when the by-laws and proprietary leases were amended to, respectively, allow a majority of the directors to alter the by-laws, and to allow two-thirds of shareholders to approve amendments to the proprietary leases, and to institute a 2% flip tax on the gross sale price of any apartment. Plaintiffs are now prohibited from challenging the propriety of those amendments because they are required to have done so via a proceeding pursuant to CPLR article 78 within four months thereof (CPLR 217[1], 7802[a], 7803[2]; see Buttita v Greenwich House Coop. Apts., Inc., 11 AD3d 250, 251 [2004]; Schulz v Town Bd. of [*2]Town of Queensbury, 253 AD2d 956 [3d Dept 1998], lv denied 93 NY2d 808 [1999]).

We have considered plaintiffs' remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: DECEMBER 27, 2012

CLERK