FILED: NEW YORK COUNTY CLERK 02/05/ :48 PM INDEX NO /2017 NYSCEF DOC. NO. 79 RECEIVED NYSCEF: 02/05/2018

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1 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x : IMPALA RETAIL OWNER, LLC, : Index No.: /2017 : Plaintiff : : ANSWER TO - against - : AMENDED : COMPLAINT THE IMPALA CONDOMINIUM and THE BOARD OF : MANAGERS OF THE IMPALA CONDOMINIUM, : : Defendants. : x "Impala" Defendants the Impala Condominium (the "Impala") and the Board of Managers "Board" (the "Board") of the Impala Condominium (the Impala and the Board are, collectively, "Defendants" "Defendants"), by their undersigned attorneys, Marcus Rosenberg & Diamond LLP ("MRD"), upon information and belief, as their answer to the December 22, 2017 amended complaint (the (" "Amended Complaint") of plaintiff Impala Retail Owner, LLC ("Retail Owner" Owner"): 1. Deny knowledge or information sufficient to form a belief as to the allegations in paragraphs 1 and 6 thereof. 2. Deny the allegations in paragraph 2 thereof, except admit that the Impala is a condominium created and existing under the laws of the State of New York for the property and building located at 404 East 76th Street, also known as 1456 Fifth Avenue, New York, New York Building" (the "Codominium Building"). 3. Deny the allegations in paragraph 3 thereof, except admit that the Board is elected by the Impala's owners to operate the Condominium Building and the Impala's affairs and business. 1 of 12

2 4. Deny the allegations in paragraph 4 thereof, except admit that venue is appropriate in New York County. 5. Deny the allegations in paragraph 5 thereof, except admit that: the Impala and the Condominium Building are subject to the Declaration of Impala Condominium (the "Declaration" "Declaration"), the offering plan accepted for filing by the New York Department of Law (the Plan" "Offering Plan"); and the Condminium Building originally contained approximately 180 residential units (the "Residential Units") and 4 non-residential units (the "Non-Residential Units"; Units" the Residential Units and Non-Residential Units are, collectively, the "Impala Units"). 6. Deny the allegations in paragraphs 8 through 18, 24, 27, 28, 31, 35, 42 through 44, 51, 52, 54 and 55 thereof, except refer to the documents therein described for their contents and terms and expressly deny that such documents are accurate, effective and enforceable and expressly allege that Retail Owner remains bound by the statements made in paragraph 12 and the "wherefore" clause of the original complaint, which were false and fraudulent misrepresntations, frivolously made to deceive and mislead the Court. 7. Deny the allegations in paragraphs 7, 19 through 23, 25, 29, 30, 32, 33, 37 through 40 and 46 through 49 thereof and expressly allege that the frivolous and baseless statements therein are false and fraudulent misrepresentations and were made with the intent of deceiving and misleading the Court. 8. Deny the allegations in paragraph 36 thereof, except reassert the statements previously made by Defendants. 9. Responding to the allegations in paragraph 26 thereof, repeat the responses herein to paragraphs 1 through 25 thereof, 2 2 of 12

3 10. Responding to the allegations in paragraph 34 thereof, repeat the responses herein to paragraphs 1 through 33 thereof. 11. Responding to the allegations in paragraph 41 thereof, repeat the responses herein to paragraphs 1 through 40 thereof. 12. Responding to the allegations in paragraph 45 thereof, repeat the responses herein to paragraphs 1 through 44 thereof. 13. Responding to the allegations in paragraph 50 thereof, repeat the responses herein to paragraphs 1 through 49 thereof. 14. Responding to the allegations in paragraph 53 thereof, repeat the responses herein to paragraphs 1 through 52 thereof. AS AND FOR DEFENDANTS' FIRST ADDITIONAL DEFENSE 15. Defendants repeat all prior statements. 16. Plaintiff's claims are barred by the doctrines of laches, waiver and estoppel. AS AND FOR DEFENDANTS' SECOND ADDITIONAL DEFENSE 17. Defendants repeat all prior statements. 18. Plaintiff's claims are barred by the Statute of Frauds. AS AND FOR DEFENDANTS' THIRD ADDITIONAL DEFENSE 19. Defendants repeat all prior statements. 20. Plaintiff s claims are barred by its failure to have satisfied conditions precedent to its asserted claims. AS AND FOR DEFENDANTS' FOURTH ADDITIONAL DEFENSE 21. Defendants repeat all prior statements. 22. Plaintiff s claims are barred by the doctrine of unclean hands. 3 3 of 12

4 AS AND FOR DEFENDANTS' FIRST COUNTERCLAIM 23. Plaintiff, Retail Owner is a subsidiary or affiliate of RFR, an international real estate developer and operator with more than $10 Billion in assets ; and an affiliate of Impala (" Sponsor" Associates L.P., ("Sponsor"), which: constructed the 31 story Condominium Building with ground Unit" floor retail space, including one such retail space (the "Retail Unit") that included a professional office unit, a laundry unit and a garage unit, all with street addresses at 1456 First Avenue and 404 East 76th Street, New York, New York; and was the named sponsor for the sale of the original 181 Residential Units of the Condominium Building, retaining or transferring to affiliates, the Non- Residential Units, including the Retail Unit. 24. Impala was established pursuant to Article 9-B of the Real Property Law and the Declaration, drafted by Greenstein Starr Gerstein & Rinaldi L.L.P., the predecessor to Starr Associates" Associates LLP ("Starr Associates"), executed by Sponsor, and recorded on October 3, The Board is an unincorporated association authorized and empowered by Article 9-B of the Real Property Law, the Declaration and the Condominium's By-Laws (the "By- Laws" Laws") to: govern the affairs of the Condominium; serve as agent of all Unit owners (the "Unit Owners" Owners"); "have all of the powers and duties necessary for, or incident to, the administration of the affairs of the Condominium"; "enforce by legal means the terms, covenants and conditions contained in the Condominium Documents and to bring or defend against any proceedings that may be instituted on behalf of, or against, the Unit Owners"; and "levy and authorize collection of fines against Unit Owners for violations of the Rules and Regulations and these By-Laws". 26. Prior to the recording of the Condominium Declaration or the sale of the Residential Units, Sponsor or related entities claim that a September 18, 2001 "Declaration of ' of 12

5 Easements, Obligations and Restrictions" Declaration" (the "Easement Declaration") was executed and recorded. 27. The Easement Declaration purports to provide certain easements, rights and Building" remedies to an adjacent century-old four story tenement building (the "Tenement Building") at 400 East 76th street and 1460 First Avenue, claimed to be owned by Retail Owner and a building at 411 East 75th Street, thereafter conveyed to an affiliate of Memorial Sloan Kettering Hospital (the "75th Street Building" Building"). 28. Without notice to the Condominium, Retail Owner claims to have executed a June 21, 2017 agreement of lease, as landlord, with MSH 1456 LLC, an affiliate of Manhattan Lease" Schoolhouse, as tenant (the "Schoolhouse Lease"). 29. The copy of the Schoolhouse Lease provided by Retail Owner states, inter alia: Paragraph 1(B)(ii) and Lease Information Summary Section V - an extension of the Minimum Rent Abatement Period equal to Retail Owner's delay in satisfying Commencement Date Conditions within 90 days of full execution of the Lease (but subject to Manhattan Schoolhouse timely providing plans and applications, including those to amend the Certificate of Occupancy ("CO") to permit the use as a "private children's school for daycare and preschool, with auxiliary office.... ". Paragraph 7(D)(ii) - Landlord shall not be responsible for any failure or interruption of any services that may be appurtenant to or supplied to the Premises by the Condominium Board and no failure to furnish or interruption of any such services shall give rise to any (i) abatement, diminution or reduction in Minimum Rent or Additional Rent payable pursuant to this Lease; (ii) constructive eviction, whether in whole or in part, or (iii) liability on the part of Landlord. Paragraph 21 â Tenant waives any right to rescind this Lease under Section 223-a of the New York Real Property 5 5 of 12

6 Law or any successor statute of similar import then in force and further waives the right to recover any damages which may result from Landlord's failure to deliver possession of the Premises on the date set forth herein for the commencement of the Term. 30. Schedule B to the Schoolhouse Lease describes work to be performed by Retail Owner, including: installation of a "fully operational, code-compliant fire sprinkler system" and a "new fire alarm system"; and delivery of a copy of "any ACP-5 certificate obtained by" Retail Owner in connection with its work. 31. In mid-august 2017, Defendants first learned that Retail Owner had commenced demolition within the Retail Unit and the Tenement Building, including demolition of portions of the Condominium's common element exterior wall separating the Condominium's Building from the Tenement Building, without providing any prior notice to, or obtaining consent of, the Condominium Board which work caused damage to the Impala in an amount believed to exceed $5,000,000, the full amount of which will be established at trial. 32. As noted in an August 14, ed letter from Defendants' attorneys to Retail Owner's attorney, Defendants: asserted then that Retail Owner did not have the right to demolish any part of the Condominium's common element exterior wall; and requested that copies of all plans of the work and 81 documents, including any from the Impala or DOB, authorizing the work, be provided. 33. On August 15, 2017, Retail Owner's attorney provided copies of some plans "Applications" and some self-certified applications (the "Applications") including: Form PW3, which states as "Description of Work": "Demolish and construct interior partitions, ceilings and doors", with the Work not to include Fire Alarm or Sprinkler. Form PW1, describing the job as Alteration Type 2, with no Fire Alarm or Sprinkler work or any change in use or occupancy. 6 6 of 12

7 Form PW1B, Schedule B, "Plumbing Sprinkler, Standpipe", describing the work solely as "remove 1 sink, 1 water closet and 1 1st floor." lav on the New York City Department of Buildings ("DOB") Work Permit, numbers AL: and OT, both of which AUTHORIZED." state, in bold type, "CONCRETE WORK NOT 34. Each Application states: "The scope of work is exempt from the asbestos requirement... " 35. Each Application has a check in the box. "No" for: "[M]ajor change to exits"; "Change in occupancy/use"; and "Change is inconsistent with current certificate of occupancy" 36. Sponsor's DOB applications were executed by Daniel Jaramillo, expressly on behalf of Sponsor, as owner, on October 7, 2016, more than 7 months prior to the execution of the Schoolhouse Lease, and more than 10 months prior to the commencement of any work on the Retail Unit and adjoining Tenement Building. 37. Retail Owner's foregoing actions violated its obligations to the Impala, pursuant to the Impala's rules and governing documents. 38. Pursuant to Section 8(e) of the Easement Declaration2, Retail Owner is obligated to pay to Impala 115% of all out-of-pocket costs and expenses incurred in connection with Retail Owner's actions, including, without limitation, the costs of this litigation, which was wrongfully commenced by Retail Owner, including attorneys' fees, in an amount believed to exceed $200,000, the full amount of which will be established at trial. 2 Plaintiff does not agree, but expressly objects to and denies the Retail Owner's claim that the Easement Declaration is effective as against the Impala or its Residential Unit Owners or otherwise grants the rights claimed by Retail Owner. 7 7 of 12

8 AS AND FOR DEFENDANTS' SECOND COUNTERCLAIM 39. The Easement Declaration was not included in the Offering Plan and not otherwise provided to purchasers of the Residential Units. 40. The terms of the Easement Declaration are materially different from those described in the Offering Plan. 41. The Offering Plan's material misrepresentations of and failure to disclose the terms of the Easement Declaration violated the Martin Act (New York General Business Law 352-e) and the rules and regulations of the Office of the New York State Attorney General. 42. By reason of the above-stated material misrepresentations, omisions and violations of applicable law, rules and regulations, a judgment should issue declaring that the Easement Declaration is null and void and without any force or effect with respect to Defendants, including the Impala's Residential Unit Owners. AS AND FOR DEFENDANTS' THIRD COUNTERCLAIM 43. On September 27, 2017, Retail Owner electronically filed the Complaint and, on September 29, 2017, presented a proposed order to show cause (the "First OSC") to bring on a motion for a preliminary injunction, with a request for issuance of a temporary restraining order ("TRO"), restraining Defendants from "interfering with plaintiff's easement over and free access to the Common Facilities." 44. Upon presentation of the proposed First OSC, before Defendants had an opportunity to submit any papers in opposition, Justice Saliann Scarpulla issued the First OSC, containing a TRO stating: "ORDERED that, pending the hearing and plaintiff's motion for a preliminary injunction, the condominium, the Board and their officers, directors, nominees, agents, servants, employees, attorneys, successors, assigns, affiliates, or other entities under their 8 8 of 12

9 control or acting in concert with them, are restrained from interfering with plaintiff's easement over and free access to the Common Facilities and it is ORDERED that, sufficient cause therefore having been alleged, personal service of a copy of this Order, and the papers upon which it is based along with service of the summons and complaint, upon the managing agent, AKAM Associates, Inc., 260 Madison Avenue, is further 12th Floor, New York, New York 10016, by e-filing and it ORDERED that, answering papers, if any, shall be served upon the attorneys for plaintiff, by October 13, 2007 by e-filing plus movant to file a $200,000 bond in five business days and condo inspect." board may The OSC also expressly required Retail Owner to post an undertaking in the amount of $200,000 within five business days. 45. Apparently, the $200,000 undertaking was filed on October 5, On October 6, 2017, the Department of Environmental Protection, based on inspections of the Retail Unit, and a sampling and testing of material, confirmed the presence of friable asbestos-containing material in the Tenement Building and issued a stop work order. 47. Contrary to Retail Owner's claims, the Easement Declaration did not, and does not, provide to Retail Owner an "easement over and free access to the Common Facilities", as repeatedly represented by Andrea Roschelle, Retail Owner's attorney, and Retail Owner to the Court in seeking both the issuance of the TRO and the First OSC and October 1, 2017 second order to the show cause (the "Second OSC"), which brought on a motion for an order holding the Impala, MRD and David Rosenberg in contempt of court. 48. On January 30, 2018, Retail Owner electronically filed and on January 31, 2018, presented to the Court yet another proposed order to show cause (the "Third OSC") to bring on a motion for a preliminary injunction, with a request for issuance of TRO restraining 9 9 of 12

10 "Defendants from interfering with plaintiffs ability to tie-in the fire alarm system located in the Premises to the fire alarm panel located in the lobby of the Condominium Building; and (ii) directed defendants to provide plaintiff and its contractors (including the Condominium's Fire Alarm Vendor) with free access to the basement and to the lobby of the Condominium Building to connect wires to the Condominium's fire alarm panel." 49. Over the Impala's attorneys' strenuous objections at oral argument, and before the Impala was permitted to submit any written opposition to the Third OSC and the TRO requested therein, the Court granted the TRO sought in the Third OSC. 50. By its express terms, the sole beneficiary of the Easement Declaration is the 75* 75 Street Property Owner. 51. For the reasons set forth in the opposition to the First OSC and Second OSC submitted by the Impala and MRD, and at oral argument on the Third OSC, Retail Owner is not entitled to the relief sought in the First, Second or the Third OSC. 52. Retail Owner's commencement of this action and the filing of the First Second and Third OSC constitute baseless and frivolous abuses of judicial process, which are sanctionable by this Court. 53. Retail Owner and its attorneys, Starr Associates, in a gross and wanton abuse of: this Court's authority; and the rights of the Impala, its residents and its attorneys, frivolously has sought and obtained two TROs through vexacious, unwarranted and frivolous motion practice. 54. Rule 130 (22 NYGRR ) authorizes the Court to "award to any party or attorney in any civil action or proceeding before the court...costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorneys' fees, resulting of 12

11 from frivolous conduct...and impose such financial sanctions against either an attorney or a party to the litigation or against both. 55. Plaintiff's violation of the the Easement Declaration entitles the Impala and the Board to recover 115% of all damages and expenses incurred in defending this action and against the First, Second and Third OSC, including, without limitation, attorneys' fees. WHEREFORE, defendants Impala Condominium and the Board of Managers of the Impala Condominium demand judgment: a) against Retail Owner, dismissing the Complaint in its entirety; b) against Retail Owner for all damages incurred by the destruction of the Impala in an amount to be determined at trial but believed to exceed $5,000,000; c) against Retail Owner, Starr Associates LLP and Andrea Roschelle, Esq. directing an immediate hearing to fix the amount of sanctions and compensation due to Defendants for violations of 22 NYGRR ; d) against Retail Owner granting Defendants 115% of all damages and expenses incurred as a result of the transactions and occurences set forth herein and of this action, the First OSC, Second OSC and Third OSC and all future proceedings; e) declaring that the Easement Declaration is null and void and without any force or effect with respect to Defendants and the Impala's Residential Unit Owners; and f) granting to Defendants such other and further relief as may be appropriate for the.actions to date and any further actions by Retail Owner or its representatives, attorneys or agents with repsect to the transactions and occurences described herein of 12

12 Dated: New York, New York February 5, 2018 MARCUS ROSENBERG & DIAMOND LLP '- -R~---'c' David Rosenberg Michael T. Contos 488 Madison Avenue New York, New York of 12