Lesal Assoc. v Board of Mgrs. of the Downing Ct. Condominium
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Lesal Assoc. v Board of Mgrs. of the Downing Ct. Condominium 2003 NY Slip Op 30261(U) January 13, 2003 Supreme Court, New York County Docket Number: 605851/99 Judge: Marilyn G. Diamond Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PRESENT: HON. MARYLIN G. DIAMOND PART48 Justice INDEX NO,605851/39 LESAL ASSOCIATES, MOTION DATE Plaintiff, MOTION SEQ. NO. 003 -againstMOTION CAL. NO. BOARD OF MANAGERS of the DOWNING COURT CONDOMINIUM, on behalf of all Unit Owners of such Condominium, and MICHAEL VOLTZ, GERALD FINKEL, MARIANNE STEWART and VICKIE McMAHON in their capacities as the Residential Managers of the Board of Managers of such Condominium, Defendants. Cross-Motion: [XIYes []No Upon the foregoing papers, it is ordered that: Plaintiff Lesal Associates is aNew York limited partnership which, pursuant to article 9-B of the Real Property Law, sponsored the conversion of a building located on Downing Street in Manhattan to a condominium. As established, the condominium consists of 32 residential units, 1 commercial unit and 1 professional unit. As provided for in the condominium’s Offering Plan, m a l sold its shares in the residential units but retained ownership and control over the commercial professional units. Pursuant to its Declaration and Bylaws, the condominium’s Board of Managers consists of five residential managers and one commercial manager. The defendants in this action are the residential managers and the Board itself This dispute concerns the proper method for assessing and allocating common charges for the various units in the condominium. Under Real Property Law §339-m, common charges in a condominium may be apportioned based on the respective individual intefests (“common interests”) of each unit in the commonly owned areas of the land and building (“common elements”). Under this method, the common charges assessed on a particular unit will reflect the percentage of the total space in the building which it occupies. If this method were used, Lesal would be responsible for 21.3 1% of the common charges. However, section 339-m also provides that, if authorized by the Declaration and Bylaws, a unit’s common charges may be calculated under an alternative method “based on special or exclusive use or availability or exclusive control of particular units or common areas by particular unit owners.” Under this method, the common charges assessed on a particular unit woule reflect the unit’s use of the common elements. Here, it appears that prior to 1999, the method used by the condominium to calculate the common charges was based on the exclusive use or control of common elements by the respective residential, commercial and professional units so as to reflect the expenses attributable to each such unit. However, at a meeting of the Board of Managers on November 22, 1999, the residential managers approved a proposal under which each of the unit owners would be responsible for a fixed percentage of the budget for operating the condominium allocated in a manner based solely upon each owner’s common interest and not upon the actual expenses attributable to the unit. * Lesal then commenced this action seeking a declaratory judgment that defendants can not allocate residential common expenses to Lesal but, rather, are limited to allocating to Lesal only common charges for the portions of the condominium which it uses. Lesal also seeks a judgment declaring that defendants may not change the allocation ofcommon charges to the commercial and professional units without the vote , I ’ [* 2] ofthe commercial manager. In their answer, defendants asserted a counterclaim for $36 1,264.33,the m o u n t of outstanding common charges which Lesal has allegedly reksed to pay since 1999: They also seek a declaratoryjudgment that the condominium’s annual kxpense requirements shall be assessed as a single sum against all units and prorated against each unit according to their respective common interests. Lesal now moves for summaryjudgment on its request ratory judgment. Defendants have cross-moved for summary judgment on their two counterclaims. Discussion Lesal argues that by attempting to ch ethod of allocating common charges fiom one based on actual use to one based solely on the unit mmon interest in the condominium as a whole,‘the residential managers are improperly forcing the commercial and professional units to subsidize the residential operations. In support of its argument, Lesal p s out that the Declaration and Bylaws specificallyprovide for the allocation and apportionment of the nses of the condominium to the professional unit, the rent fiom the respective common interests commercial unit and of these units. r of seemingly contradictory provisions. of the condominium shall be “Common Paragraph nine of the Declaration wners according to the method set forth in the Expenses” which shall be “apport By-Laws.” Article VI, section 2 1 of the assessments shall be deemed to be common charges and that “the total 1be assessed as a single sum against all Units ective Common Interests appurtenant to such method of calculating the common charges. ation and ByLaws which provide that certain units, certain expenses exclusively to“ the d to all ofthe units. The Declaration defines s, Professional Common Charges and Residential Common Charges and provid arges will be assessed against the specific units to charges allocated and assessed by the Condominium Board from time to time against the Residential Unit Owners, pro-rata in accordance with their respective Common Interests (except as otherwise provided in the Declaration or the Bylaws), to meet the Residential portion of the Common Expenses. Analogous definitions are given for “Cokercial Common Charges” and “Professional Common Charges.” In addition, definition nine of the Declaration breaks down the common elements of the condominium into “General Common Elements,” “Limited Common Elements,” “Residential Limited Common E1ements”and “Commercial Limited Common Elements.” These definitions demonstrate that the Declaration’s intent is to segregate certain common charges and assess them only against the unit that incurred them. An even more detailed provision for the allocation of expenses can be found in article 1 1 section 6 1, of the ByLaws, which breaks down the expenses‘incukqi by the condominium for maintenance, repairs and/or improvementsand, consistent with Real Property Law §339-m, specifically allocates those expenses to unit owners based on their particular use or control of the subject areas. It does this by creating four categories of expenses: (1) expenses to be borne exclusively by an individual residential unit owner; (2) expenses to be borne exclusively by the commercial unit owner for the Commercial Limited Common Elements; (3) “Common Expenses” to be borne by all unit owners; and (4) “Residential Common Expenses” to be borne only by the owners of the residential units for the Residential Limited Common Elements. It is well settled that when resolving a confiict bekeen provisions of a contract, a court should adopt -2- . [* 3] an interpretation which attempts to give meaning to every provision of the agreement. See Hudron Iron Works, Inc. v. Beys Speciality Contracting, Inc., 262 AD2d 360, 362 (2”*Dept.1999); Trump V. Refco Properties, Inc., 194 AD2d 70,75(1st Dspt. 1993). To the extent that there are inconsistencies between a general provision and a specific provision of a contract, the specific provision controls. See Bank o f Tokyo-Mitsubishi,Ltd, Nau YorkBranchv.Kvaerner, 243 AD2d 1,8 (1“Dept. 1998).Here, the provisions ofthe Declaration and Bylaws which segregate expenses according to a unit’s category are far more detailed and comprehensivethan the provisions upon which defendants rely in arguing that all expenses are common charges to be divided according to the unit owners’ respective common interests. Defendants’ interpretation ignores or misconstrues key portions ofthe Declaration and ByLaws. It is also significant that for the twelve years prior to November, 1999, the resident managers approved common charge assessments which were consistent with Lesal’s interpretation of the Declaration and the Bylaws. In this respect, the parties’ course of performance under the contract is considered to be the “most persuasive evidence of [their] agreed intention.” Federal Insurance Company v. Americas Insurance Company, 258 AD2d 39, 44 (1“ Dept. 1999). Defendants’ assertion that the residential managers were misled or deceived by the commercial manager is conclusory and without any evidentiary support. Finally, the court agrees with Lesal that the Offering Plan is valuable in helping to interpret the Declaration and Bylaws even if the Plan itself is not a contract which binds subsequent purchasers of the residential units. The Offering Plan here clearly provided that the commercial unit would be required to pay only for the services it directly received and the n of the common elements that it utilized. Since they were all part of the same transaction, it i priate to read the OfferingPlan, the Declaration and the Bylaws together and to then conclude that the commercial and professional units are only obligated to pay common charges and expenses fairly attribut to those units. See,NmcyNeale Enterprises, InC., v. Eventful Enterprises, Inc., 260 AD2d 453 (2* Lesal is therefore entitled to summaryjudgment on its first cause of action for a judgment declaring that defendants can not allocate residential common expenses to Lesal and are limited to allocating to Lesal common charges which reflect its use of the common elements of the condominium. As to Lesal’s second cause of actio eclaring that the defendants improperly changed the allocation of common charges to the d professional units without the approval ,of the commercial manager at the November 22 eting, the parties have not adequately addressed the issue and, in any event, the court nee matter since it has already ruled that the change was otherwise improper. As to the defendants’ first counterclaim for the common charges which Lesal has allegedly rehsed to pay since 1999, the court is unable at this time to determine the amount that is actually due in light of the declaratory relief granted herein. The defendants’ cross-motion for summary judgment on the first counterclaim must therefore be denied. The parties shall appear before the court in Room 412,60 Centre Street, New York, New York on February 18,2003 at 11:30 a.m. for a statbs conference. ENTER ORDER Dated: 1/13/03 Check one: [] FINAL DISPOSITION MARYLIN G. DIAMOND, AS. C. [XI NON-FINAL DISPOSITION -3-
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