Bauer v Waterside Plaza, LLC 2005 NY Slip Op 30586(U) June 21, 2005 Supreme Court, New York County Docket Number: /04 Judge: Joan A.

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1 Bauer v Watersde Plaza, LLC 2005 NY Slp Op 30586(U) June 21, 2005 Supreme Court, New York County Docket Number: /04 Judge: Joan A. Madden Cases posted wth a "30000" dentfer,.e., 2013 NY Slp Op 30001(U), are republshed from varous state and local government webstes. These nclude the New York State Unfed Court System's E-Courts Servce, and the Bronx County Clerk's offce. Ths opnon s uncorrected and not selected for offcal publcaton.

2 [* 1]. 1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YOR< : AS PART L x GARY BAUER, sung ndvdually and as an ndex No /04 offcer of Waters1de Tenants Assocaton, for and on behalf! of the resdents of 10 Watersde Plaza, WATERSDE TENANTS ASSOCATON, PHYLLS BALCHARSH and MCHAEL SCHLUETER, - aganst - Plantff, WATERSDE PLAZA, LLC Defendant ~ x JOAN A. MADDEN, t : Defendant Wtersde Plaza, LLC ("Watersde") moves for an order {1) dsmslng ths acton on the grounds that plantffs lack the authorty, and do not have standng, to conunence ths acton on behalf of the "Resdents of 10 Watersde Plaza," and {2) precludng p antffs from offerng any evdence of damages suffered by the 'ndvdual tenants based on ther alleged falure to provde dscl~sure. granted to the e~tent Background Plantffs oppose the moton, whch s set forth below. Ths acton arses out of Watersde's alleged falure to provde adequate heat to the tenants of 10 Watersde Plaza (herenafter "Bulldng 10") durng the wnter of , after the Watersde nttalled new heatng/ar condtonng unts. Buldng 10 s ptrt of four apartment towers and four townhouses, owned by Watersfe (herenafter "the Watersde complex"). the Mtchell-Lamr Law, the apartments and townhouses n the Under Watersde comple were rented to, and served as home for, 1,470

3 [* 2] moderate and mdd~e ncome famles. The new unts were nstalled pursuant to a settlement agreement dated Jµly 26, 2001 (herenafter "the Settlement 1 Agreement"), under whch certan tenants of Buldng 10 and other buldngs n the Watersde complex (herenafter "the Settlng! Tenants") wthdrew ther opposton to Watersde's pendng applcaton to pay off a Mtchell-Lama mortgage and to free Watersde Plaza ~rom the requrements of regulated rents and servces. n exdhange, Watersde agreed to a schedule of lmted rent ncreases, tlogether wth other benefts, ncludng the replacement of hjatng and ar condtonng "ncremental unts wth new unts.... " 1 Settlement Agreement, 91: 41. The new unts, however, were defectve, and as a result, t s alleged that Jhe apartments at Buldng 10 were not kept at habtable temperltures, and that the tenants were forced to pay addtonal electjcal charges. Plantff wf tersde Tenants Assocaton ("WTA") was desgnated as thr tenants assocaton representng the nterests of all the resdents of the Watersde complex under the rules promulgated by tbe New York Cty Department of Housng Preservaton and Development, whch mplements the Mtchell-Lama Law. WTA agree,, along wth the Settlng Tenants, to the terms 1 t s uncljar whether the so-called "ncremental" heatng and ar condto ng unts exsted throughout the Watersde complex or only 'n Buldng 10. 2

4 [* 3] of the Settlement; Agreement. Agreement provdek that: [Waters~de) Paragraph 27 of the Settlement shall contnue to recognze WTA as the offcal representatve of the Settln~ Tenants for the purpose of dealng wth [Watersde] on ssues of general applcaplty whch may arse under the Agreemept upon Dssoluton [.e. upon the payng off of the Mtchell-Lama mortgage]. The rghts and prvleges granted to the desgnated Tenants Assocaton under the [the M tchell-lama Law] shall no longer exst. Notwthstandng the foregong, [Watersde] and the1 Tenants shall be permtted to resolve any ssfes.07 d~putes between them wthout WTA's art1c1pat1on. n addton, under paragraph 31 of the Settlement Agreement, Watersde agreed that t would "dscuss and attempt, n good fath, to reach greement wth WTA upon matters of conunon concern such as... apartm,nt mantenance, equpment and servces. The acton s brought by Gary Bauer, ndvdually and as an offcer of the W A, for and on behalf of the resdents of Buldng 10, the WTA, and two other ndvdual tenants of 10 Watersde Plaza. Plantffs seek an 80% rent abatement for the relevant perod, rembursement of electrcal charges, together wth varous exp nses ncurred as a result of the lack of heat and attorneys' fees. Watersde af gues that the complant should be dsmssed as the Settlng Tenrnts at Watersde Plaza dd not authorze the conunencement of [hs acton on ther behalf. n support of ts poston, Waters de submts mnutes from WTA Board meetngs held 3

5 [* 4]..., -"~ on May 12, 2003 ahd June 9, The mnutes reflect that certan tenants o:f Buldng 10 met wth WTA' s lawyer, Davd Rosenberg, Esq., ~nd that a $5,000 retaner fee was advanced to Mr. Rosenberg to " start a lawsut, on the condton that Bldg 10 tenants vote for :a lawsut and pay for t." Watersde mantans that there s no,evdence that a vote of the tenants was ever taken. Watersde also submts affdavts from four tenants who resde at BuldJg 10, who aver that they never authorzed plantffs' atto~neys to commence a lawsut on ther behalf, and were never consu~ted regardng the acton. 2 Watersde further argues that WTA ~acks standng to assert a clam based on lack of adequate heat and the hgh electrcty blls. 1 t ff b ff d n oppost,n, p an s su mt Mr. Bauer's a avt n whch he states tthat "the acton was fully authorzed pror to. [ h. ts commencement r and that " w) en we were unable to fnd a document to evdnce ths, WTA voted at ts January 4, 2005 meetng to ratfy the acton and the representaton of the Settlng Tenant(] n 10 Watersde Plaza. Plantffs! rovde a copy of the January 4, 2005 resoluton, whch "confrms he pror authorzaton for the commencement of the acton as a rlantff representatve and as a representatve of the class nf rettlng Tenants, along wth ts offcer and the 2 Watersde J1so asserts that t offered a 15% rent abatement for a sx month erod and that most of the tenants of Buldng 10 were satsfe wth the offer. 4

6 [* 5] ndvdual tenant plantffs, and that at least 88 households of settlng tenants contrbuted to the ntal commencement of tre ltgaton." Plantffs costs for also submt a lst of Settlng Tenants ~ho Watersde Plaza. contrbuted to the WTA legal fund for 10 n further support of ther poston that they were authorzed to brrg ths acton, plantffs submt affdavts from 43 of the S,ttlng Tenants from 10 Watersde Plaza. The tenants each state, nter ala, that they sgned the Settlement Agreement authorzng 1 WTA to contnue to serve as ther representatve, t:!hat they suffered through the wnter of as a result of defectve heatng and ventlaton that left ther apartment j1tolerably cold, and that they oppose the moton to dsmss and wtt ther day n court. Dscusson "Unncorpo,ated assocatons are voluntary congregate enttes, whch tave the legal capacty to sue." See Locke Assocates nc. Foundaton for the Support of the Unted Natons, 173 Msa2d 502, 506 {Cv Ct NY Co. 1997), ctng, Communt Bd 7 of the Borou h v. Schaffer, 84 NY2d 148 (1994). Secton 12 of th General Assocatons Law, authorzes the presdent or tre,surer of an unncorporated assocaton to brng an acton or spe al proceedng on behalf of the assocaton "to recover property, or upon any cause of acton, for or upon whch all the assocat s may mantan such an acton or specal 5

7 [* 6] proceedng, by re~son of ther nterest or ownershp theren ' ether jontly or11n common." Thus, Bauer! as the former treasurer of the WTA, unncorporated assocaton, would appear to have the capacty to sue on behalf of ~he members of the WTA n order to vndcate the an rghts of the Settlng Tenants. 3 However, notwthstandng Bauer's apparent [lapacty to sue, the frst ssue rased on ths moton s whether Bauer and the WTA were authorzed by the Settlng Tenants o brng ths acton. Furthermore, f such authorty exsts, the ssue remans as to whether Bauer and/or the WTA have standng to sue on behalf of the resdents of Buldng 10. Wth respect to the frst ssue, the court fnds that the record rases fac ual questons regardng whether the WTA was properly authorzl d to brng ths acton. The Settlement Agreement contempjates that WTA would contnue to play a role n representng the lghts of the Settlng Tenants, ncludng n negotatng wth Watersde regardng apartment mantenance, 3 Although Baler s the former treasurer as opposed to the treasurer, to thej extent he performs the dutes as treasurer, he would have the rght to brng ths acton on behalf of the assocaton. See ocke Assocates nc. v Foundaton for the Support of the U 'ted Natons, 173 Msc2d at 506 Alternatvely, the members of t± WTA would have a common law rght to brng a representatve ac on n the name of the assocaton. See Douglas E. Mcowen Harn Fu eral Home v. Boccacco, 79 AD2d 1098 {4th Dept 1981). 6

8 [* 7] equpment and seryces. 4 Moreover, th~ affdavts from the four tenants who state that they dd not authorze ths acton are not dspostve of the ssue, partcflarly as plantffs submt evdence that these tenants varously 1. or that they prev~ously are not members of the WTA or Settlng Tenants, ndcated that they had authorzed the acton. Addton~lly, Bauer's affdavt and the January 4, 2005 resoluton are su~f cent to rase a factual queston as to whether a vote to authorze the commencement of ths acton was taken. Accordngly, t would be premature to dsmss ths acton on the ground h. t ar ts commencement was not properly authorzed. The next ssue, then, s whether Bauer and the WTA have standng to brng ths acton on behalf of the Settlng Tenants resdng at Buldd.ng 10. "Standng s a threshold determnaton, restng n part ol polcy consderatons, that a person should be allowed access tol the courts to adjudcate the merts of a partcular dspu~e that satsfes the other justcablty crtera." Soceby of Plastcs ndustry nc. v. County of Suffolk, 77 NY2d 761, 769 (1991). "The varous tests for standng are desgned to ensure that a party seekng relef has a suffcently coglzable stake n the outcome so as to 'cast[ the dspute n a form tradtonally capable of judcal 4 At the sa provdes that th prvleges accor Watersde, howev prevent WTA from e tme, however, the Settlement Agreement WTA wll not have the same rghts and ed to t under the Mtchell-Lama Law. r, does not suggest that ths language would brngng ths acton. 7

9 [* 8] resoluton.'" Co unty Bd 7 v. Schaffer, 84 NY2d at , quotng, Socety Jf Plastcs v. County of Suffolk, 77 NY2d at (nternal ctatons omtted). n applyng tthese prncples to determne f an unncorporated assocaton has standng to brng an acton, the courts examne Whej ther the njury alleged belongs to the assocaton tself or to all of ts members such that "the assocaton tsel has a genune stake n the outcome of the acton. Locke Assbcates nc. v Foundaton for the Support of the Unted Natons, lf 3 Msc2d at 505; see also, Connolly v. O'Malley, 18 AD2d 620 (l5t Dept 1962). The ratonaj:r/\.ll~hs rule, was artculated by Justce Bloom ~ 1 ~hapro v. Sobel, 85 AD2d 552 (1st Dept 1981), appeal dsmssed, 56 NY2d 648 (1982). Justce Bloom wrote that "an unncorporatetl assocaton has no lfe separate and apart from ts members" (ctaton omtted). d. at 553. Nonetheless, General Assocatrns Law secton 12, "provdes a shorthand technque... [thajt] permts [the] ntaton [of an acton] wthout namng each of the ndvdual members as partes plantff... rb. However, [the members'] nterest n the subject matter o, the sut must be an nterest suffcently corrunon so that an acton brought by... the assocaton... each could be proper!~ named as a plantff." d. Thus, when he unncorporated assocaton tself suffers no njury or the cl ms are not corrunon to all the members of the 8

10 [* 9] assocaton, t has been found that the assocaton lacks standng to sue. Bartley v Walentas, 78 AD2d 310 (1st Dept 1980), nvolved a clam for the breach of the warranty of habtablty brought by a tenants assocaton aganst the landlord and managng agent, allegng the denal and deprvaton of buldng serv~es and necessary repars to the premses, ncludng water llaks, mproper lghtng, defectve terraces,. d 1. h F. na equate e evatrr servce. T e Appe ate Dvson, rst Department dsmst?ed the clams brought by the tenants and assocaton, nott.g that the assocaton tself dd not suffer any damage. n addton, based on the facts of the case, t would appear that certan of the complaned-about defects were not common to all the tenants, and thus an acton could not be brought on behalf of all the members. Shapro v. Sobel, (dssent), 85 AD2tl at 553. n contrast, n Martha Washngton Tenants Assocaton v. Roberts, 292 AD2 225 (1st Dept 002), the Frst Department found that a tenants assocaton had standng to challenge agency 1 determnaton grarttng a certfcate of no harassment to hotel owner where members of assocaton were tenants n the hotel owner's buldng, and therefore had a common nterest n the proceedng. Here, the wa tself suffered no njury as a result of the defectve heatn and ar condtonng. Thus, t s ncumbent on the WTA and Baue to show that all the members of the assocaton 9

11 [* 10] were harmed. n ths case, such a showng cannot be made. Notably, the WTA s the representatve of all the tenants n the Watersde complexland not only those resdng n Buldng 10 who allegedly suffere9 damages as the result of the defectve heatng/ar condyonng unts. Thus, the njures alleged n the complant are not common to all the members of the WTA and the members do not have a common nterest n the relef sought. Accordngly, snce Bauer, as an offcer of the WTA and the! WTA lack standng! to brng ths acton on behalf of the Resdents of Buldng 10 th~ clams asserted by these plantffs must be dsmssed. Such asmssal s wthout prejudce to the tenants, who were alleged!, damaged as a result of the lack of heat durng the wnter of , from assertng ndvdual clams n ths acton. Concluson n vew of e above, t s ORDERED thaj the moton to dsmss s granted to the extent of dsmssng an, severng the clams asserted by Gary Bauer, as an offcer of Watersde Tenants Assocaton for and on behalf of the resdents of 10 Watersde Plaza, and by the Watersde Tenants Assocaton; and t s further ORDERED tha the remander of the acton shall contnue; and t s further ORDERED thaj moton to preclude s dened as moot wth respect to Gary Bauer, as an offcer of Watersde Tenants 10

12 [* 11] Assocaton for a d on behalf of the resdents of 10 Watersde Plaza, and the Watersde Tenants Assocaton; and t s further ORDERED that the moton to preclude wth respect to the ndvdual tenants who reman as plantffs n ths acton shall be determned at a status conference prevously scheduled to be held on June 23, 2005 at noon n Part 11, room 351, 60 Centre Street, New York,,NY. DATED: June~( 2005 :-.. 11

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