Preview
INDEX NO. 151313/2014
(FILED: NEW YORK COUNTY CLERK 0571572014)
NYSCEF DOC. NO. 55 RECEIVED NYSCEF 05/15/2014
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
ween ene nee nnn e nner em nnn nen nee
HELEN SILLER,
Individually and derivatively as a shareholder
E-filed
of, and on behalf of, The Third Brevoort
Motion Sequence 003
Corporation,
Index No. 151313/2014
Plaintiff,
- against -
THE THIRD BREVOORT
CORPORATION, Diane C. Nardone, Cliff
Russo, Elizabeth Louie, Andrew Baum,
George Aloi, Christine Beck, Bonnie Hiller,
Mortimor C. Lazarus, Jane Warren, John C.
Woell, and Barbara Eisenberg,
Defendants.
teen een nnn nnn ramaemntmennamameseeemernit
mee
DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION TO
DISMISS THE FIRST AMENDED VERIFIED COMPLAINT
ABRAMS GARFINKEL MARGOLIS BERGSON, LLP
1430 Broadway, 17th Floor
New York, New York 10018
(212) 201-1170
Attorneys for Defendants
Table of Contents
PRELIMINARY STATEMENT
STATEMENT OF FACTS..
A. Background
B. The Original Complaint and Frivolous Motion for a Preliminary Injunction.
C. The First Amended Complaint
ARGUMENT.
I THE COMPLAINT MUST BE DISMISSED BECAUSE PLAINTIFF'S
PURPORTED DERIVATIVE CLAIMS ARE PROCEDURALLY DEFECTIVE
A Plaintiff's Improper Intermingling of Alleged Direct and Derivative Claims
Requires Dismissal of the Complaint In Its Entirety
Plaintiff Cannot Demonstrate That She Will Fairly And Adequately
Represent The Interests of the Corporation and Its Shareholders 11
Il PLAINTIFF'S FIRST THROUGH FIFTH CLAIMS FOR A DECLARATORY
JUDGMENT FAIL TO STATE A CAUSE OF ACTION.. 12
Il. PLAINTIFF'S BREACH OF CONTRACT CLAIM FAILS TO STATE
A CAUSE OF ACTION AND SHOULD BE DISMISSED.. 14
A The Individual Defendants Are Not Parties To Any Contract
With Plaintiff 15
The Governing Documents 15
1 The Offering Plan 15
2 The By-Laws 16
The 1985 House Rules 16
The 1990 Alteration Agreement 17
The Lease 17
The January 26, 2010 and March 1, 2012 Amended House Rules 18
The House Rules Concerning Washing Machines and Dryers Comply
with the Offering Plan, By-Laws, Lease, and Alteration Agreement and
Plaintiff Has Failed to Establish Any Breach Thereof by the Co-op . 19
Plaintiff's Claims are Barred By The Release 21
Plaintiff Failed to Give The Required 30-Day Notice Prior to Filing
This Action 21
IV PLAINTIFF'S SIXTH AND SEVENTH CLAIMS FOR A PERMANENT
INJUNCTION SHOULD BE DISMISSED BECAUSE PLAINTIFF HAS
NO VIABLE UNDERLYING CAUSE OF ACTION AGAINST DEFENDANTS 22
PLAINTIFF'S NINTH CLAIM FOR PRIMA FACIE TORT SHOULD BE
DISMISSED BECAUSE IT MERELY RECASTS HER OTHER CLAIMS
AND FAILS TO ALLEGE THE REQUISITE ELEMENTS OF THE TORT 23
VI PLAINTIFF'S TENTH CLAIM FOR ATTORNEYS' FEES AND EXPENSES
SHOULD BE DISMISSED 24
Vil. PLAINTIFF'S TWELFTH CLAIM FOR TORTIOUS INTERFERENCE
WITH PROSPECTIVE ECONOMIC ADVANTAGE SHOULD BE DISMISSED 25
Vil. PLAINTIFF'S THIRTEENTH CLAIM FOR DAMAGES UNDER
JUDICIARY LAW §487 FAILS TO STATE A CLAIM 25
IX. PLAINTIFF'S FIFTEENTH CLAIM FOR BREACH OF FIDUCIARY
DUTY FAILS TO STATE A CLAIM 27
Xx. THE COMPLAINT IS BARRED BY THE BUSINESS JUDGMENT RULE 27
XI. PLAINTIFF'S FOURTEENTH CLAIM FOR PROPERTY DAMAGE
SHOULD BE DISMISSED 29
CONCLUSION .... 29
i
Table of Authorities
Cases Page(s)
20 Pine Street Homeowners Assoc. v. 20 Pine Street LLC,
109 A.D.3d 733, 971 N.Y.S.2d 289 (1st Dept. 2013) 27
81 Bowery Realty Corp. v. Qui Hui Chen,
No. 106565/05, 2008 WL 2447335 (Sup. Ct., N.Y. County, June 18, 2008) 14
Abrams v. Donati,
66 N.Y.2d 951, 498 N.Y.S.2d 782 (1985) 9,11
Allen v. Murray House Owners Corp.,
174 A.D.2d 400, 571 N.Y.S.2d 698 (1* Dep’t 1991)... 28
Alliance Network, LLC v. Sidley Austin LLP,
No. 653731/2012, 2014 WL 1258222
(Sup. Ct., N.Y. County March 20, 2014)... 9, 22, 25
Anonymous y. Axelrod,
92 A.D.2d 789, 459 N.Y.S.2d 778 (1* Dep’t 1983) 12, 13
Baker y. Andover Assocs. Man. Corp.,
No. 6179/09, 2009 WL 7400085 (Sup. Ct. Westchester County Nov. 30, 2009)...11, 12
Balk v. 125 W. 92" St. Corp.,
24 A.D.3d 193, 806 N.Y.S.2d 31 (1st Dep’t 2005) 10, 11, 15
Barbour y. Knecht,
296 A.D.2d 218, 743 N.Y.S.2d 483 (1" Dep’t 2002)... 28
Barker y. Time Warner Cable, Inc.,
No. 016438/08, 2009 WL 1957740 (Sup. Ct., Nassau County July 1, 2009). 12, 13
Biondi v. Beekman Hill House Apartment Corp.,
257 A.D.2d 76, 692 N.Y.S.2d 304 (1st Dep’t 1999)
Bishop v. Maurer,
33 A.D.3d 497, 823 N.Y.S.2d 366 (1st Dep’t 2006)
Cannings v. East Midtown Plaza Housing Co., Inc.,
No. 401071/10, 2011 WL 5142033 (Sup. Ct., N.Y. County, Oct. 18, 2011) 28
Cannon Point North, Inc. y. Abeles,
160 Misc. 2d 30, 612 N.Y.S.2d 289 (App. Term., 1 Dep’t, 1993) 14, 29
iii
Curiano v. Suozzi,
63 N.Y.2d 113 (1984) 23
Deer Consumer Products Inc. y. Little,
No. 650823/2011, 2011 WL 4346674 (Sup. Ct. N.Y. County, Aug. 31, 2011)
East 41" Street Assocs. V. 18 East 42™ Street, L.P.,
248 A.D.2d 112, 669 N.Y.S.2d 546 (1* Dep’t 1998) 14
Gertler y. Goodgold,
107 A.D.2d 481, 487 N.Y.S.2d 565 (1* Dep’t 1985) 23, 24
Ginsberg v. Ginsberg,
84 A.D.2d 573, 443 N.Y.S.2d 439 (2d Dep’t 1981) 23
Guggenheimer v. Ginzburg,
43 N.Y.2d 268, 401 N.Y.S.2d 182 (1977)
Havell vy. Islam,
292 A.D.2d 210, 739 N.Y.S.2d 371 (1* Dep’t 2002) 23
James v. Alderton Dock Yards,
256 N.Y. 298 (1931) 12
JFK Family Ltd. Partnership v. Millbrae Natural Gas Dev. Fund 2005, L.P.,
No. 1059111/07, 2008 WL 4308289
(Sup. Ct., Westchester County Sept. 16, 2008) 11, 12
Jones v. Citigroup, Inc.,
No. 570210/10, 2010 WL 2944224 (Sup. Ct., App. Term July 27, 2010) 10, 11
La Potin y. Julius Lang Co.,
30 A.D.2d 527, 290 N.Y.S.2d 619 (1 Dep’t 1968) 9,15
Levandusky v. One Fifth Avenue Apt. Corp.,
75 N.Y.2d 530, 553 N.E.2d 1317, 554 N.Y.S.2d 807 (1990) 27, 28
Maksimiak v. Schwartzapfel Novick Truhowsky Marcus,
P.C., 82 A.D.3d 652, 919 N.Y.S.2d 330 (Ist Dep’t 2011) 26
O'Donnell, Fox & Gartner, P.C. v. R-2000 Corp.,
198 A.D.2d 154, 604 N.Y.S.2d 67 (1 Dept. 1993)
Peyton v. PWV Acquisition LLC,
No. 111379/11 2013 WL 2165330 (Sup. Ct. N.Y, County May 20, 2013).. 22
iv
Scott v. Bell Atl. Corp.,
282 A.D.2d 180, 726 N.Y.S.2d 60 (Ist Dep’t 2001)
Stefatos v. Frezza,
95 A.D.3d 787, 945 N.Y.S.2d 297 (1 Dep’t 2012). 27
Steinberg v. Steinberg,
434 N.Y.S.2d 877 (Sup. Ct., N.Y. County 1980) 1
Sullo v. Margab Realty, LLC,
No. 109246/07, 2008 WL 2699542 (Sup. Ct., N.Y. County June 11, 2008) 12, 13
Vargas v. Hennigan,
No. 2011-1391SC, 2012 WL 5290355 (Sup. Ct., App. Term. Oct. 18, 2012) 10, 11
Vigoda v. DCA Prod. Plus, Inc.,
293 A.D.2d 265, 741 N.Y.S.2d 20 (1* Dep’t 2002). 23, 25
Wall Street Systems, Inc. v. Lemence,
No. 04 Civ. 5299(JSR), 2005 WL 292744 (S.D.N.Y. Feb. 8, 2005) 11,12
Yudell v. Gilbert,
99 A.D.3d 108, 949 N.Y.S.2d 380 (1 Dep’t 2012) 9, 11
PRELIMINARY STATEMENT
Defendants The Third Brevoort Corporation (the “Co-op”), Diane C. Nardone
(“Nardone”), Cliff Russo, Elizabeth Louie, Andrew Baum, George Aloi, Christine Beck, Bonnie
Hiller, Mortimor C. Lazarus, Jane Warren, John C. Woell and Barbara Eisenberg (collectively,
the “Board Members” or “Individual Defendants”, and together with the Co-op, the
“Defendants”) respectfully submit this memorandum of law in support of their motion, pursuant
to C.P.L.R. § 3211(a)(1) and 3211(a)(7), to dismiss plaintiff Helen Siller’s (“Plaintiff”) First
Amended Verified Complaint (“Complaint”) in this action, dated March 28, 2014. (Margolis
Aff. Ex. A).!
On February 14, 2014, Plaintiff filed the original complaint (“Original Complaint”) in
this action against the Co-op, seeking various forms of declaratory and injunctive relief and
damages concerning the Co-op’s alleged breach of two proprietary leases (together, the “Lease”)
for combined apartments 12R and 12T (together, the “Unit”) in the building owned by the Co-op
located at 9-21 Fifth Avenue, New York, New York and known as The Brevoort (“Building”).
Plaintiff's husband-counsel, Stephen I. Siller, Esq. (“Mr. Siler’) also resides in the Unit with
Plaintiff. The gravamen of the Original Complaint was that the Co-op allegedly breached the
Lease and other documents by refusing to allow Plaintiff to replace her broken clothes washer
with a new washer and outdoor-venting gas dryer of her choice because, among other reasons,
outdoor-venting gas dryers do not comply with house rules promulgated by the Co-op’s board of
directors (the “Board”) in 2010, over four (4) years prior to Plaintiff's washer/dryer falling into
disrepair. Mrs. Siller, individually, was the sole named plaintiff and the Co-op was the sole
named defendant in the Original Complaint.
' Citations to “Margolis Aff.” refer to the Affirmation of Barry G. Margolis, dated May 15, 2014 submitted
herewith. Citations to “Comp!.” refer to Exhibit A to the Margolis Aff. The factual allegations in the Complaint are
accepted as true for the purpose of this motion to dismiss only, except where flatly contradicted by documentary
evidence.
In a misguided attempt by Plaintiff's overzealous and self-interested husband-counsel to
strong-arm the Board and “throw the first punch” in this washer/dryer dispute, Plaintiff filed a
frivolous motion by order to show cause seeking a temporary restraining order and preliminary
injunction affirmatively ordering the Co-op to allow Plaintiff to replace her broken machine with
a washer and outdoor-venting gas dryer of her choice, notwithstanding any noncompliance with
Co-op house rules or procedures. The Court properly denied Plaintiff's request for a temporary
restraining order and her request for a preliminary injunction, holding that Plaintiff failed to meet
her burden of establishing irreparable harm. (NYSCEF Doc. No. 31). There is a fully functional
laundry room (the “Building Laundry Room”) in the basement of the Building for the common
use of all residents.
Frustrated with their failure to obtain a preliminary injunction, and in a transparent
attempt to harass and intimidate Defendants, Plaintiff filed a First Amended Verified Complaint
(“Complaint”) purporting to bring claims both individually and derivatively as a shareholder on
behalf of the Co-op, against the Co-op eleven (11) individual, present and former Board
Members. The Complaint alleges fifteen (15) claims for relief, often intermingling alleged direct
and derivative claims rendering it impossible ascertain what capacity Plaintiff purports to assert
each claim in and which defendant(s) Plaintiff purports to assert each claim against. Plaintiff
asserts five (5) claims for a declaratory judgment (First through Fifth Claims); two claims for a
permanent injunction (Sixth and Seventh Claims); claims for specific performance (Eighth
Claim), prima facie tort (Ninth Claim), attorney’s fees (Tenth Claim), breach of contract
(Eleventh Claim), tortious interference with prospective economic advantage (Twelfth Claim);
and violation of Judiciary Law §487 (Thirteenth Claim); an unrelated property damage claim
(Fourteenth Claim); and breach of fiduciary duty (Fifteenth Claim). The Complaint seeks, inter
alia, $2 million in “damages” on the breach of contract and tort-based claims.
As a threshold matter, the Complaint is procedurally defective. Plaintiff's impermissible
intermingling of purported derivative and individual claims requires that the Complaint be
dismissed in its entirety. The Complaint should also be dismissed because Plaintiff is not a
proper representative for a derivative action, as she purports to assert direct claims against the
Co-op for millions of dollars and other relief while in the same breath purporting to act as a
fiduciary in the best interests of all of the Co-op’s shareholders by pursuing alleged derivative
claims.
Plaintiff's First through Fifth Claims for various declaratory judgments should be
dismissed because a party may not seek a declaratory judgment where it has other available
remedies or it merely seeks a declaration of the same rights and obligations asserted in other
causes of action. Moreover, to the extent Plaintiff purports to seek declaratory relief under
RPAPL § 1515, her claims should be dismissed because the Complaint does not allege the
requisite claim to property as it is undisputed that the Co-op is the fee simple owner of the
Building.
Plaintiff's Eleventh Claim for breach of contract should be dismissed as to the individual
defendants because it is undisputed that none of them, individually, had any contract with
Plaintiff whatsoever. Furthermore, there was no breach by Defendants. As clearly demonstrated
by the governing documents including the Co-op offering plan (“Plan”), by-laws (“By-Laws”),
various house rules, Plaintiff's Lease and Plaintiffs 1990 alteration agreement with the Co-op,
which are expressly referenced in the Complaint and can be considered on this motion to dismiss
despite Plaintiffs failure to attach them to the Complaint. Plaintiff had no contractual
grandfathering clause or property interest giving her the right to install any particular washing
machine and dryer of her choosing a quarter-century after her now-defunct machine was
allegedly first approved in 1990. To the contrary, the Plan and Bylaws state that any installation
of a new washing machine or dryer would require the written consent of the Board and that the
Board had the power to make or change house rules (which are incorporated into the Lease) at
any time. Moreover, Plaintiff failed to comply with the contractually mandated notice
requirements prior to filing this action which is, therefore a breach of the Lease.
Plaintiff's Sixth and Seventh Claims for injunctive relief should be dismissed because
injunctive relief is simply not available when the plaintiff does not have any remaining
substantive cause of action. Furthermore, Plaintiff cannot allege the requisite irreparable harm
and absence of a legal remedy necessary to state a cause of action for a permanent injunction.
Plaintiffs Ninth Claim for prima facie tort should be dismissed because Plaintiff
improperly attempts to use this claim as a catch-all alternative for her other unsustainable causes
of action. Plaintiff also fails to allege special damages because no “actual losses” are alleged
with specificity or otherwise that are causally attributable to any alleged tortious conduct by
defendants. Plaintiff inexplicably demands $2 million on this cause of action but the only
“special damage” she purports to allege is being denied use of a clothes washer and dryer in her
apartment and instead having to use “inconvenient” machines in the basement of the building.
(Compl. §127(e)). In addition, Plaintiff cannot allege that defendants were solely motivated by
disinterested malevolence. Plaintiff's Tenth Claim for attorneys’ fees and expenses should be
dismissed because the statutes relied upon by Plaintiff do not provide for an award of attorneys’
fees in the circumstances presented here.
Plaintiff's Twelfth Claim for tortious interference with prospective economic adcantage
should be dismissed because there is no “but for causation”, as Plaintiff cannot allege the name
of the party to any specific contract she would have obtained had the Co-op permitted her to
install appliances as she wishes. Plaintiff fails to allege she ever attempted to sell the Unit or that
it was on the market, much less allege the existence or identity of an actual prospective buyer
that would have bought her Unit but for the alleged “interference.” The Complaint fails to
allege “wrongful means.”
Plaintiff's Thirteenth Claim for violation of Judiciary Law § 487 should be dismissed
because even assuming arguendo that the Nardone Aff? contained false statements, Plaintiff
suffered no injury from any statement made in the Nardone Aff., as the Court denied Plaintiff's
frivolous motion for a preliminary injunction because she failed to demonstrate irreparable harm,
which was Plaintiffs burden. In any event, as is set forth herein, there are no actionable
statements in the Nardone Aff.
Plaintiff's Fifteenth Claim for breach of fiduciary should be dismissed because Plaintiff
cannot allege any wrongdoing by members of the Board separate and apart from their collective
actions taken on behalf of the Co-op. This claim should also be dismissed because it is largely
duplicative of Plaintiffs breach of contract claim. Moreover, all of the foregoing claims should
be dismissed because they are barred by the Business Judgment Rule, which does not permit the
Court to review the reasonableness of the Board’s conduct here. Plaintiff's conclusory
allegations of discriminatory conduct and bad faith do not overcome the presumption of
regularity created by the business judgment rule,
Finally, Plaintiff's Fourteenth Claim for property damage in the amount of $1,740.91, to
the extent it may survive this motion to dismiss, should be transferred to the Civil Court for
adjudication there.
? Citations to “Nardone Aff.” refer to the previously filed Affirmation of Diane C. Nardone In Opposition to Order
To Show Cause, dated February 17, 2014. (NYSCEF Doc. No. 9). The Nardone Aff. is resubmitted herewith as
Exhibit G to the Margolis Aff.
STATEMENT OF FACTS
A. Background
On or about December 15, 1989, Plaintiff and Mr. Siller, then co-lessees of Unit 12T,
contracted to lease Unit 12R with the intention of combining the two units. (Compl. 82). By
letter dated December 26, 1989, the Sillers’ counsel wrote to the Co-op to “request that the
Board’s approval of the Sillers’ purchase of Apartment 12R [also] include the approval, in
concept, of the joining by the Sillers of the two apartments.” (Compl. $83). On June 25, 1990,
the Sillers entered into an alteration agreement with the Co-op (“1990 Alteration Agreement”)
and on July 24, 1990 the proposed alterations were approved. (Compl. { 85). On or about
September 4, 1990, Plaintiff and her husband closed on Unit 12R and began renovations to
combine Unit 12R with 12T (Compl. 488). As part of the renovations, Plaintiff installed a
clothes washer, gas dryer and dryer vent. (Compl. 488). In January 1992, the building
superintendent allegedly inspected the dryer vent and sent a note to the Board that he had done
so. The Complaint refers to this as the “Dryer Vent Inspection Letter.” (Compl. {16(b)).
On or about April 18, 2001, Plaintiff and the Co-op entered into the Lease, which
supersedes any prior leases. (Compl. 47). When Plaintiff's washing machine broke in January
2014 and replacement parts were unavailable, she assumed that obtaining an insurance certificate
was “the only thing plaintiff needed to do.” (Compl. 4 5). The gas dryer still works normally.
(Compl. §3). However, according to the Complaint, Plaintiff also needs to replace the gas dryer
“because the gas dryer is stacked in the same physical unit as the washer.” (Compl. 43). In
emails exchanged between January 31 and February 4, 2014, Plaintiffs husband allegedly
advised the Co-op of this “situation.” (Compl. § 4). The Co-op, however, refused to allow
plaintiff to replace her existing washer and gas dryer with “like machines.” (Compl. 45).
Among its reasons were certain 2010 amendments to the Co-op’s house rules (which were
carried forward when these rules were later amended in 2012) limiting the installation or
replacement of washers and dryers in shareholder units to brands researched and selected by the
Board based on various product features, including the fact that the dryers were self-venting.
(See Nardone Aff. attached as Exhibit G to Margolis Aff?
Plaintiff speculates “upon information and belief, it would be defendants’ position that if
any appliance or device involved in any of the other Existing Conditions broke, plaintiff would
have to remove that appliance and device and close up its brick penetration.” (Compl. { 12).
B. The Original Complaint and Frivolous Motion For A Preliminary Injunction
On February 13, 2014, Plaintiff filed the Original Complaint against The Co-op seeking
various forms of declaratory and injunctive relief and damages concerning the Co-op’s alleged
breaches of the Lease. Plaintiff also filed an Order to Show Cause seeking a temporary
restraining order and preliminary injunction enjoining the Co-op from “interfering with or
refusing to allow Plaintiff to replace her washer/dryer.” On February 18, 2014, the Co-op filed
the Nardone Affirmation in opposition to Plaintiff's Order to Show Cause. The Court denied
Plaintiff's request for a TRO and scheduled a hearing on her request for a preliminary injunction
for March 17, 2014. (NYCEF Doc. No. 10).
After briefing and oral argument on Plaintiff's Order to Show Cause, the Court denied
Plaintiff's motion for a preliminary injunction by Order dated March 17, 2014, holding that
Plaintiff failed to meet her burden of establishing irreparable harm. (NYSCEF Doc. No. 3 nA
3 As Plaintiff repeatedly references them in the Complaint, the Nardone Aff., and the documents that are exhibits
thereto, may be considered in connection with Defendants’ motion to dismiss. (see Compl. {f/6, 11, 14, 15(a) —
15(d), 23-25).
Had Plaintiff moved forward with the steps necessary to obtain and install a Board-approved washer and dryer —
rather than joining Mr. Siller in wasting judicial resources and attempting to intimidate the Board with a frivolous
application for “emergency” relief, Plaintiff likely could have been using a brand new washing machine and dryer
(albeit a self-venting one) in her Unit months ago.
C. The First Amended Complaint
On March 28, 2014, Plaintiff filed a Complaint “individually and derivatively as a
shareholder of, and on behalf of, The [Co-op],” asserting fifteen (15) legally deficient and largely
duplicative causes of action. (Margolis Aff. Ex. A). In a transparent attempt to harass and
intimidate the Board after Plaintiff's unsuccessful attempt to garner a preliminary injunction,
Plaintiff named, along with the Co-op, eleven (11) individuals, present and former Board
Members, as defendants, notwithstanding the absence of any contractual relationship between
Plaintiff and these individuals concerning her unit, her appliances, or otherwise. The Complaint
alleges that the Co-op’s 2010 and 2012 House Rules cannot “vary amend, modify or abrogate the
Lease.” (Compl. ff] 14, 21). The Complaint alleges that defendants violated alleged duties to all
shareholders by, inter alia, adopting and enforcing House Rules against Plaintiff, prohibiting
Plaintiff from installing the washer and gas dryer she wishes to install, and ignoring the “unique
physical conditions” of Plaintiff's Unit, breaching Plaintiff's Lease, and making
misrepresentations to the Court in this action filed by Plaintiff over her washer/dryer. (Compl.
{26€)-(g)).
ARGUMENT
“The applicable standard for determining a CPLR 3211(a)(7) motion is whether, within
the four corners of the complaint, any cognizable cause of action has been stated.” Scott v. Bell
Atlantic Corp., 282 A.D.2d 180, 183, 726 N.Y.S.2d 60, 63 (1" Dep’t 2001), citing
Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 185 (1977). “It is well
settled that bare legal conclusions and factual claims, which are either inherently incredible or
flatly contradicted by documentary evidence...are not presumed to be true on a motion to
dismiss for legal insufficiency.” O'Donnell, Fox & Gartner, P.C. v. R-2000 Corp., 198 A.D.2d
154, 154, 604 N.Y.S.2d 67, 68 (1% Dept. 1993).
Under CPLR 3211(a)(1), “A party may move for judgment dismissing one or more
causes of action asserted against him on the ground that: (1) a defense is founded upon
documentary evidence...” N.Y.C.P.L.R. 3211(a)(1)(McKinney 2009). “The court . . . is not
required to accept factual allegations, or accord favorable inferences, where the factual assertions
are plainly contradicted by documentary evidence.” Bishop v. Maurer, 33 A.D.3d 497, 498, 823
N.Y.S.2d 366, 367 (1st Dep’t 2006). “[Allegations consisting of bare legal conclusions, as well
as factual claims either inherently incredible or flatly contradicted by documentary evidence, are
not presumed to be true and accorded every favorable inference.” Biondi v. Beekman Hill House
Apartment Corp., 257 A.D.2d 76, 81, 692 N.Y.S.2d 304, 308 (1st Dep’t 1999) (internal citations
omitted).
“{I]t is undisputed that the Court, on a CPLR 3211(a)(1) or (7) dismissal motion, may
consider documents referred to in a Complaint. . . even if the pleading fails to attach them.
Deer Consumer Products Inc. y. Little, No. 650823/2011, 2011 WL 4346674 at *4 (Sup. Ct.
N.Y. County, Aug. 31, 2011); see Alliance Network, LLC v. Sidley Austin LLP, No.
653731/2012, 2014 WL 1258222 at n.1 (Sup. Ct., N.Y. County March 20, 2014). “Where a
variance exists between the written contract and the conclusion drawn by the pleader, the writing
must prevail over the allegations of the complaint.” La Potin v. Julius Lang Co., 30 A.D.2d 527,
528, 290 N.Y.S.2d 619, 620 (1 Dep’t 1968).
I THE COMPLAINT MUST BE DISMISSED BECAUSE PLAINTIFF’S
PURPORTED DERIVATIVE CLAIMS ARE PROCEDURALLY DEFECTIVE
A. Plaintiff’s Improper Intermingling of Alleged Direct and
Derivative Claims Requires Dismissal of the Complaint In Its Entirety
“A complaint the allegations of which confuse a shareholder’s derivative and individual
rights will .. . be dismissed.” Abrams v. Donati, 66 N.Y.2d 951, 953, 498 N.Y.S.2d 782, 783
(1985); Yudell v. Gilbert, 99 A.D.3d 108, 115, 949 N.Y.S.2d 380, 384 (1* Dep’t 2012)(same).
Thus, “[t]he intermingling of derivative and individual claims requires dismissal of the entire
complaint.” Jones v. Citigroup, Inc., No. 570210/10, 2010 WL 2944224 at *1 (Sup. Ct, App.
Term July 27, 2010); Vargas v. Hennigan, No. 2011-1391SC, 2012 WL 5290355 at *1 (Sup. Ct.,
App. Term. Oct. 18, 2012); see Balk v. 125 W. 92" St. Corp., 24 A.D.3d 193, 194, 806 N.Y.S.2d
31, 32 (Ist Dep’t 2005).
Here, the Complaint is an amalgam of Plaintiff's alleged personal claims impermissibly
intermingled with alleged derivative claims. Paragraph 32 of the Complaint alleges “/mjost of
plaintiffs claims against the individual defendants are derivative through the corporate
defendant,” while paragraph 144 alleges that “/aJll or most of plaintiff's claims against each of
the individual defendants are derivative through the corporate defendant.” (Compl. {J 32,
144)(emphasis added). Adding to the confusion, the first fourteen claims alleged in the
Complaint are not expressly designated as either direct or derivative, though many of them refer
to “defendants” in the plural, despite the fact that they involve Plaintiff's alleged personal
contract rights under her Lease with the Co-op, which none of the Board Members are a party to
(e.g. Fifth Claim $115, Sixth Claim 4118, Seventh Claim Heading p.37, Ninth Claim 4127,
Eleventh Claim §134; Twelfth Claim § 137, Thirteenth Claim 140). Other claims do not
mention the corporate defendant or the Individual Defendants at all (e.g. Second Claim, {] 106,
Tenth Claim, §§ 130-131), and it is therefore unknown what capacity Plaintiff purports to assert
them in or which defendant(s) Plaintiff purports to assert them against. Plaintiff concedes that
the Lease “only allows the individual defendants acting as a board, and not individually, to adopt
House Rules.” (Compl. { 26(a)). It is therefore impossible to decipher whether Plaintiff is
purporting to assert her alleged claims directly or derivatively. Plaintiff’s Fifteenth Claim — the
only cause of action Plaintiff expressly denominates as a “Derivative Claim” for breach of
fiduciary duty — alleges that the individual defendants, inter alia, “exceed[ed] their authority
10
under the Lease,” breached their alleged “duty of good faith and fair dealing,” and took actions
“targeted at plaintiff’ and “discriminatory against plaintiff.” (Compl. 152). Plaintiff is merely
recasting her contract-based claims as an alleged breach of fiduciary duty and masquerading
them as a “derivative” claim. Accordingly, the confusion and intermingling of Plaintiffs alleged
direct and derivative claims in the Complaint requires that it be dismissed. See Abrams, 66
N.Y.2d at 953, 498 N.Y.S.2d at 783; Yudell, 99 A.D.3d at 115, 949 N.Y.S.2d at 384; Jones, 2010
WL 2944224 at *1; Vargas, 2012 WL 5290355 at *1; Balk, 24 A.D.3d at 194, 806 N.Y.S.2d at
32.
B. Plaintiff Cannot Demonstrate That She Will Fairly And Adequately Represent
The Interests of the Corporation and Its Shareholders
“{S]tock ownership, although an absolute precondition to the maintenance of [a
derivative] action, does not automatically entitle a shareholder to sue derivatively. Because she
seeks to use a remedy designed to vindicate rights of the corporation and the other shareholders,
she makes herself a fiduciary.” Steinberg v. Steinberg, 434 N.Y.S.2d 877, 878 (Sup. Ct., N.Y.
County 1980). “The plaintiff must therefore demonstrate that she will fairly and adequately
represent the interests of the shareholders and the corporation, and that she is free of adverse
personal interest or animus.” Jd. Thus, “the courts have held that a plaintiff is an inappropriate
representative for a derivative action if that plaintiff is asserting direct claims along with
derivative claims.” Baker v. Andover Assocs. Man. Corp., No. 6179/09, 2009 WL 7400085 at
*16 (Sup. Ct. Westchester County Nov. 30, 2009). See JFK Family Ltd. Partnership v. Millbrae
Natural Gas Dev. Fund 2005, L.P., No. 10591/07, 2008 WL 4308289 at * 15 (Sup. Ct.
Westchester County Sept. 16, 2008); Wall Street Systems, Inc. v. Lemence, No. 04 Civ.
5299(JSR), 2005 WL 292744 at *3 (S.D.N.Y. Feb. 8, 2005)(“an individual shareholder has a
conflict of interest, and therefore cannot adequately represent other shareholders, when he
simultaneously brings a direct and derivative action.”).
11
Here, Plaintiff is impermissibly pursuing alleged direct and derivative claims in the
Complaint. Plaintiff is suing the Co-op for millions of dollars and other relief while at the same
time purporting to act on behalf of the Co-op by seeking reimbursement for the amounts Plaintiff
is fiercely seeking from the Co-op. Moreover, Plaintiff admits that she “does not know” if some
of the other shareholders she purports to derivatively represent were actually board members of
the Co-op at the time the allegedly improper House Rules were approved, and therefore persons
potentially adverse to Plaintiff. (Compl. { 38). Plaintiff, therefore, is hopelessly conflicted and
an inadequate shareholder representative for a derivative action as she is also, individually,
alleging direct claims. Accordingly, the Complaint should be dismissed. See Baker, 2009 WL
7400085 at *16; JFK Family, 2008 WL 4308289 at * 15; Wall Street Systems, 2005 WL 292744
at *3.
IL. PLAINTIFF’S FIRST THROUGH FIFTH CLAIMS FOR A DECLARATORY
JUDGMENT FAIL TO STATE A CAUSE OF ACTION
“Where there is no necessity for resorting to the declaratory judgment it should not be
employed.” Anonymous y. Axelrod, 92 A.D.2d 789, 459 N.Y.S.2d 778, 779 (1* Dep’t 1983)
quoting James v. Alderton Dock Yards, 256 N.Y. 298, 305 (1931). Thus, where an adequate
remedy exists or is alleged in a complaint under a breach of contract or other theory, a cause of
action for a declaratory judgment is improper and should be dismissed. Sullo v. Margab Realty,
LLC, No. 109246/07, 2008 WL 2699542 at * 4 (Sup. Ct, N.Y. County June 11, 2008)
(dismissing cause of action for declaratory judgment “because it parallels the other claims and
merely seeks a declaration of the same rights and obligations.”); Barker v. Time Warner Cable,
Inc., No. 016438/08, 2009 WL 1957740 at *9 (Sup. Ct., Nassau County July 1, 2009)(‘‘a party
may not seek a declaratory judgment when the party has other available remedies, such as an
action for breach of contract.”).
12
Here, Plaintiff's First through Fifth Claims are for judgments declaring various
contractual rights of the parties “under RPAPL 1515 or otherwise.” Specifically, Plaintiff seeks
a declaration (i) “as to whether merely replacing the Existing Washer and Gas Dryer would
constitute a violation of the 2010/2012 House Rules or the Lease” (First Claim, Compl. {{]102-
103); (ii) that all of the “Existing Conditions” (as defined in the Complaint) “may be maintained,
repaired and replaced with like appliances or devices by plaintiff and any successor in interest to
plaintiff for the duration of the Lease (Second Claim, Compl. {]105); (iii) that certain House
Rules “are null and void” because they are “inconsistent and conflict with [the] Lease”(Third
Claim, Compl. 109); (iv) that the Co-op “be barred from any and all claims to an estate or
interest in the property described in th{e] Complaint in which Plaintiff has an interest” (Fourth
Claim, Compl. § 112); and (v) that defendants “at their sole cost and expense, jointly and
severally, must pay all costs for plaintiff? to do various work allegedly required to install
appliances compliant with Co-op requirements. (Compl. ¥ 115). As Plaintiff's claims for
declaratory relief merely recast her breach of contract and tort claims in the form of a request for
a declaratory judgment, they are improper and should be dismissed. See Anonymous, 92 A.D.2d
at 789, 459 N.Y.S.2d at 779; Sullo v. Margab Realty, LLC, 2008 WL 2699542 at * 4; Barker,
2009 WL 1957740 at *9.
Moreover, to the extent Plaintiff purports to seek declaratory relief under RPAPL §1515,
her claims should be dismissed because the Complaint does not allege the requisite claim to
property. It is undisputed that the Co-op “own[s] the Building in fee simple” and Plaintiff is a
tenant-shareholder. (Compl. 51). “Essential to the maintenance of an action to determine a
claim to real property is that the complaint state a claim by the defendant, of ‘an estate or interest
in the real property, adverse to that of the plaintiff (RPAPL 1515[1][b] emphasis added).”
“Where, as here, the parties recognize that the basis of the tenant’s claim is an interest pursuant
13
to a lease, no claim adverse to the landlord’s interest in the property is asserted, and the
complaint fails to state a cause of action.” East 41% Street Assocs. v. 18 East 42" Street, L.P.,
248 A.D.2d 112, 114, 669 N.Y.S.2d 546, 548 (1 Dep’t 1998); see 81 Bowery Realty Corp. v.
Qui Hui Chen, No. 106565/05, 2008 WL 2447335 at *4 (Sup. Ct, N.Y. County, June 18,
2008)(‘the basis of the tenant[s’] claim is an interest pursuant to a lease, no claim adverse to the
landlord’s interest in the property is asserted, and the complaint fails to state a cause of action.”)
(internal quotation marks omitted).
Plaintiff has no unfettered “property” right to install any replacement machines of her
choice in perpetuity, in any manner she sees fit and in contravention of all of the governing
corporate documents she agreed to. As the court held in Cannon Point North, Inc. v. Abeles, 160
Misc. 2d 30, 32, 612 N.Y.S.2d 289, 290 (App. Term., 1* Dep’t, 1993):
The fact that respondents were permitted to maintain their appliances with the
apparent knowledge of various building employees did not preclude petitioner’s
board of directors from establishing and enforcing a specific house rule addressed
to this subject. Pursuant to the proprietary leases, the board at any time could
‘alter amend and repeal’ the house rules, and it cannot be reasonably argued that
respondents had somehow acquired vested rights in the continued maintenance of
these machines. Having chosen the cooperative form of ownership, [respondents
are] bound to abide by the rules and regulations governing its operation.
Accordingly, the First through Fifth Claims in the Complaint for declaratory relief should be
dismissed.
il. PLAINTIFF’S BREACH OF CONTRACT CLAIM FAILS TO STATE A CAUSE
OF ACTION AND SHOULD BE DISMISSED
Plaintiff's Eleventh Claim is for breach of contract. Plaintiff alleges that “[b]y denying
plaintiff the right to purchase and install a replacement washer/dryer described in this Complaint,
defendants breached or caused the breach of the Contracts and Existing Approvals, and also
breached the individual defendants’ covenants of good faith and fair dealing implied in every
14
Contract.” (Compl $134). For the reasons stated herein, the Complaint fails to state a cause of
action for breach of contract and, therefore, Plaintiff's Eleventh Claim should be dismissed.
A. The Individual Defendants Are Not Parties To Any Contract With Plaintiff
Plaintiffs breach of contract claim should be dismissed as to the individual defendants
because it is undisputed that none of them, individually, had any contract with Plaintiff
whatsoever. See Balk, 24 A.D.3d at 194, 806 N.Y.S.2d at 32 (“Since the individual defendants
are not signatories to the proprietary lease . . no breach of contract can be asserted against
them.”). “Where a variance exists between the written contract and the conclusion drawn by the
pleader, the writing must prevail over the allegations of the complaint.” La Potin v. Julius Lang
Co., 30 A.D.2d at 528, 290 N.Y.S.2d at 620. The Complaint fails to allege any contract between
Plaintiff and any of the Individual Defendants.
B. The Governing Documents
1. The Offering Plan
Plaintiff's breach of contract claim should also be dismissed as to all defendants because
the governing documents flatly contradict the allegations and conclusively establish that there
was no breach of contract as a matter of law. The Plan provides that “gas for cooking” — not for
drying clothes — “will be furnished by the [Co-op], and the cost thereof is included in the
maintenance charges for each apartment.” (Margolis Aff. Ex. B at 3)(emphasis added). The
Plan further provides that “[s]pecial electrical appliances, such as electric ranges, clothes
washing machines and clothes dryers may not be installed after the Operative Date of the Plan
without the prior written consent of the board of directors.” (Margolis Aff. Ex. B at 11). Thus,
it has always been clear from day 1 that “consent of the board” is required to install any machine,
whether it is a first-time installation or a replacement machine.
1S
2. The By-Law:
Article II, Section 6 of the By-Laws of the Co-op, entitled “House Rules,” provides:
“The board of directors shall have power to make and change the house rules applicable to the
apartment building of the corporation whenever the board deems it advisable so to do. All house
rules shall be binding upon all tenants and occupants of the apartment building.” (Margolis Aff.
Ex. C at 10).
3. The 1985 House Rules
Section 3.3 of the Amended House Rules as of June 17, 1985 (the “1985 Amended House
Rules”), provides:
No ventilator, air-conditioning device, dishwasher, clotheswasher, clothes dryer
or other apparatus shall be installed by the Lessee without prior written approval
of the Lessor as to the type, location and manner of installation of such device.
Each Lessee shall keep any such device in good appearance and mechanical repair
... If any Lessee shall fail to keep such a device in good order and repair and,
in the case of a ventilator or air-conditioning device, properly painted, the Lessor
in its discretion may remove the same. The cost of such removal shall be paid
for by the Lessee, and the device shall not be replaced until put in proper
condition and then only with the further written approval of the Lessor, which
need not be given.
(Margolis Aff. Ex. D, §3.3)(emphasis added).
Section 3.10.10 of the 1985 Amended House Rules contains a non-waiver provision
regarding the approval of alterations:
Any approval by the Lessor of any alteration shall not be considered a waiver of
any of the terms of the Lease including the House Rules or Amended House
Rules.
(Margolis Aff. Ex. D, §3.10.10)(emphasis added). Section 4.5 of the 1985 Amended House
Rules provides that “[aJny consent or approval given under these House Rules by the Lessor
shall not create any legal rights in the Lessee and shall be revocable by the Lessor at any
time. (Margolis Aff. Ex. D, §4.5) (emphasis added). Section 4.6 provides: “[t]hese house rules
are subject to change, modification or revocation at any time.”
16
Pursuant to Section 3.10.11 of the 1985 Amended House Rules, lessees release the
Corporation from any and all liability resulting from or in any way connected with an alteration
and waive “all” claims against the Cooperative based on interruption or suspension of the
alteration “irrespective of the reason for such interruption or suspension.” ((Margolis Aff. Ex. D,
§3.10.10)(emphasis added). Plaintiff concedes the 1985 Amended House Rules were in effect in
1990. (Compl. § 33).
4, The 1990 Alteration Agreement
On or about June 25, 1990, the Sillers entered into an alteration agreement with the Co-
op (the “1990 Alteration Agreement”)(Margolis Aff. Ex. E). The 1990 Alteration Agreement,
like the 1985 Amended House Rules, contains a no-waiver clause and waives and releases claims
against the Co-op concerning the alterations or “any interruption or suspension of the alterations
regardless of the reason”:
10. Any approval by The Third Brevoort Corporation of any work to be done by
the Cooperator will not be considered a waiver of any of the terms of the
Proprietary Lease including the House Rules.
11. The Cooperator does hereby release The Third Brevoort Corporation and its
Managing Agent from any and all liability for loss or damage to any of the
Cooperator's property which may result or be in any way connected to the
Cooperator's work, and the Cooperator hereby waives any claim the Cooperator
may now or hereafter have against The Third Brevoort Corporation or its
Managing Agent based upon any interruption or suspension of the alterations
regardless of the reason for such interruption or suspension...
(Margolis Aff. Ex. E, §§ 10-11).
5. The Lease
The Lease expressly supersedes all prior leases to the Units and renders them null and
void. (Margolis Aff. Ex. F, § Tenth). Paragraph Twelfth of the Lease prohibits Plaintiff from
filing any action or proceeding against the Co-op unless the alleged “default, breach or failure
continues for thirty days after the giving of written notice thereof by Lessee to Lessor.”
17
(Margolis Aff. Ex. F, § Twelfth). Such notice “shall be given . . . by registered or certified mail
addressed to the Lessor . . . with a copy to the then managing agent of the building.” (Margolis
Aff. Ex. F, § Twenty Sixth). Plaintiff never provided the Co-op or its managing ag
Preview
INDEX NO. 151313/2014 (FILED: NEW YORK COUNTY CLERK 0571572014) NYSCEF DOC. NO. 55 RECEIVED NYSCEF 05/15/2014 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ween ene nee nnn e nner em nnn nen nee HELEN SILLER, Individually and derivatively as a shareholder E-filed of, and on behalf of, The Third Brevoort Motion Sequence 003 Corporation, Index No. 151313/2014 Plaintiff, - against - THE THIRD BREVOORT CORPORATION, Diane C. Nardone, Cliff Russo, Elizabeth Louie, Andrew Baum, George Aloi, Christine Beck, Bonnie Hiller, Mortimor C. Lazarus, Jane Warren, John C. Woell, and Barbara Eisenberg, Defendants. teen een nnn nnn ramaemntmennamameseeemernit mee DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF THEIR MOTION TO DISMISS THE FIRST AMENDED VERIFIED COMPLAINT ABRAMS GARFINKEL MARGOLIS BERGSON, LLP 1430 Broadway, 17th Floor New York, New York 10018 (212) 201-1170 Attorneys for Defendants Table of Contents PRELIMINARY STATEMENT STATEMENT OF FACTS.. A. Background B. The Original Complaint and Frivolous Motion for a Preliminary Injunction. C. The First Amended Complaint ARGUMENT. I THE COMPLAINT MUST BE DISMISSED BECAUSE PLAINTIFF'S PURPORTED DERIVATIVE CLAIMS ARE PROCEDURALLY DEFECTIVE A Plaintiff's Improper Intermingling of Alleged Direct and Derivative Claims Requires Dismissal of the Complaint In Its Entirety Plaintiff Cannot Demonstrate That She Will Fairly And Adequately Represent The Interests of the Corporation and Its Shareholders 11 Il PLAINTIFF'S FIRST THROUGH FIFTH CLAIMS FOR A DECLARATORY JUDGMENT FAIL TO STATE A CAUSE OF ACTION.. 12 Il. PLAINTIFF'S BREACH OF CONTRACT CLAIM FAILS TO STATE A CAUSE OF ACTION AND SHOULD BE DISMISSED.. 14 A The Individual Defendants Are Not Parties To Any Contract With Plaintiff 15 The Governing Documents 15 1 The Offering Plan 15 2 The By-Laws 16 The 1985 House Rules 16 The 1990 Alteration Agreement 17 The Lease 17 The January 26, 2010 and March 1, 2012 Amended House Rules 18 The House Rules Concerning Washing Machines and Dryers Comply with the Offering Plan, By-Laws, Lease, and Alteration Agreement and Plaintiff Has Failed to Establish Any Breach Thereof by the Co-op . 19 Plaintiff's Claims are Barred By The Release 21 Plaintiff Failed to Give The Required 30-Day Notice Prior to Filing This Action 21 IV PLAINTIFF'S SIXTH AND SEVENTH CLAIMS FOR A PERMANENT INJUNCTION SHOULD BE DISMISSED BECAUSE PLAINTIFF HAS NO VIABLE UNDERLYING CAUSE OF ACTION AGAINST DEFENDANTS 22 PLAINTIFF'S NINTH CLAIM FOR PRIMA FACIE TORT SHOULD BE DISMISSED BECAUSE IT MERELY RECASTS HER OTHER CLAIMS AND FAILS TO ALLEGE THE REQUISITE ELEMENTS OF THE TORT 23 VI PLAINTIFF'S TENTH CLAIM FOR ATTORNEYS' FEES AND EXPENSES SHOULD BE DISMISSED 24 Vil. PLAINTIFF'S TWELFTH CLAIM FOR TORTIOUS INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE SHOULD BE DISMISSED 25 Vil. PLAINTIFF'S THIRTEENTH CLAIM FOR DAMAGES UNDER JUDICIARY LAW §487 FAILS TO STATE A CLAIM 25 IX. PLAINTIFF'S FIFTEENTH CLAIM FOR BREACH OF FIDUCIARY DUTY FAILS TO STATE A CLAIM 27 Xx. THE COMPLAINT IS BARRED BY THE BUSINESS JUDGMENT RULE 27 XI. PLAINTIFF'S FOURTEENTH CLAIM FOR PROPERTY DAMAGE SHOULD BE DISMISSED 29 CONCLUSION .... 29 i Table of Authorities Cases Page(s) 20 Pine Street Homeowners Assoc. v. 20 Pine Street LLC, 109 A.D.3d 733, 971 N.Y.S.2d 289 (1st Dept. 2013) 27 81 Bowery Realty Corp. v. Qui Hui Chen, No. 106565/05, 2008 WL 2447335 (Sup. Ct., N.Y. County, June 18, 2008) 14 Abrams v. Donati, 66 N.Y.2d 951, 498 N.Y.S.2d 782 (1985) 9,11 Allen v. Murray House Owners Corp., 174 A.D.2d 400, 571 N.Y.S.2d 698 (1* Dep’t 1991)... 28 Alliance Network, LLC v. Sidley Austin LLP, No. 653731/2012, 2014 WL 1258222 (Sup. Ct., N.Y. County March 20, 2014)... 9, 22, 25 Anonymous y. Axelrod, 92 A.D.2d 789, 459 N.Y.S.2d 778 (1* Dep’t 1983) 12, 13 Baker y. Andover Assocs. Man. Corp., No. 6179/09, 2009 WL 7400085 (Sup. Ct. Westchester County Nov. 30, 2009)...11, 12 Balk v. 125 W. 92" St. Corp., 24 A.D.3d 193, 806 N.Y.S.2d 31 (1st Dep’t 2005) 10, 11, 15 Barbour y. Knecht, 296 A.D.2d 218, 743 N.Y.S.2d 483 (1" Dep’t 2002)... 28 Barker y. Time Warner Cable, Inc., No. 016438/08, 2009 WL 1957740 (Sup. Ct., Nassau County July 1, 2009). 12, 13 Biondi v. Beekman Hill House Apartment Corp., 257 A.D.2d 76, 692 N.Y.S.2d 304 (1st Dep’t 1999) Bishop v. Maurer, 33 A.D.3d 497, 823 N.Y.S.2d 366 (1st Dep’t 2006) Cannings v. East Midtown Plaza Housing Co., Inc., No. 401071/10, 2011 WL 5142033 (Sup. Ct., N.Y. County, Oct. 18, 2011) 28 Cannon Point North, Inc. y. Abeles, 160 Misc. 2d 30, 612 N.Y.S.2d 289 (App. Term., 1 Dep’t, 1993) 14, 29 iii Curiano v. Suozzi, 63 N.Y.2d 113 (1984) 23 Deer Consumer Products Inc. y. Little, No. 650823/2011, 2011 WL 4346674 (Sup. Ct. N.Y. County, Aug. 31, 2011) East 41" Street Assocs. V. 18 East 42™ Street, L.P., 248 A.D.2d 112, 669 N.Y.S.2d 546 (1* Dep’t 1998) 14 Gertler y. Goodgold, 107 A.D.2d 481, 487 N.Y.S.2d 565 (1* Dep’t 1985) 23, 24 Ginsberg v. Ginsberg, 84 A.D.2d 573, 443 N.Y.S.2d 439 (2d Dep’t 1981) 23 Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 401 N.Y.S.2d 182 (1977) Havell vy. Islam, 292 A.D.2d 210, 739 N.Y.S.2d 371 (1* Dep’t 2002) 23 James v. Alderton Dock Yards, 256 N.Y. 298 (1931) 12 JFK Family Ltd. Partnership v. Millbrae Natural Gas Dev. Fund 2005, L.P., No. 1059111/07, 2008 WL 4308289 (Sup. Ct., Westchester County Sept. 16, 2008) 11, 12 Jones v. Citigroup, Inc., No. 570210/10, 2010 WL 2944224 (Sup. Ct., App. Term July 27, 2010) 10, 11 La Potin y. Julius Lang Co., 30 A.D.2d 527, 290 N.Y.S.2d 619 (1 Dep’t 1968) 9,15 Levandusky v. One Fifth Avenue Apt. Corp., 75 N.Y.2d 530, 553 N.E.2d 1317, 554 N.Y.S.2d 807 (1990) 27, 28 Maksimiak v. Schwartzapfel Novick Truhowsky Marcus, P.C., 82 A.D.3d 652, 919 N.Y.S.2d 330 (Ist Dep’t 2011) 26 O'Donnell, Fox & Gartner, P.C. v. R-2000 Corp., 198 A.D.2d 154, 604 N.Y.S.2d 67 (1 Dept. 1993) Peyton v. PWV Acquisition LLC, No. 111379/11 2013 WL 2165330 (Sup. Ct. N.Y, County May 20, 2013).. 22 iv Scott v. Bell Atl. Corp., 282 A.D.2d 180, 726 N.Y.S.2d 60 (Ist Dep’t 2001) Stefatos v. Frezza, 95 A.D.3d 787, 945 N.Y.S.2d 297 (1 Dep’t 2012). 27 Steinberg v. Steinberg, 434 N.Y.S.2d 877 (Sup. Ct., N.Y. County 1980) 1 Sullo v. Margab Realty, LLC, No. 109246/07, 2008 WL 2699542 (Sup. Ct., N.Y. County June 11, 2008) 12, 13 Vargas v. Hennigan, No. 2011-1391SC, 2012 WL 5290355 (Sup. Ct., App. Term. Oct. 18, 2012) 10, 11 Vigoda v. DCA Prod. Plus, Inc., 293 A.D.2d 265, 741 N.Y.S.2d 20 (1* Dep’t 2002). 23, 25 Wall Street Systems, Inc. v. Lemence, No. 04 Civ. 5299(JSR), 2005 WL 292744 (S.D.N.Y. Feb. 8, 2005) 11,12 Yudell v. Gilbert, 99 A.D.3d 108, 949 N.Y.S.2d 380 (1 Dep’t 2012) 9, 11 PRELIMINARY STATEMENT Defendants The Third Brevoort Corporation (the “Co-op”), Diane C. Nardone (“Nardone”), Cliff Russo, Elizabeth Louie, Andrew Baum, George Aloi, Christine Beck, Bonnie Hiller, Mortimor C. Lazarus, Jane Warren, John C. Woell and Barbara Eisenberg (collectively, the “Board Members” or “Individual Defendants”, and together with the Co-op, the “Defendants”) respectfully submit this memorandum of law in support of their motion, pursuant to C.P.L.R. § 3211(a)(1) and 3211(a)(7), to dismiss plaintiff Helen Siller’s (“Plaintiff”) First Amended Verified Complaint (“Complaint”) in this action, dated March 28, 2014. (Margolis Aff. Ex. A).! On February 14, 2014, Plaintiff filed the original complaint (“Original Complaint”) in this action against the Co-op, seeking various forms of declaratory and injunctive relief and damages concerning the Co-op’s alleged breach of two proprietary leases (together, the “Lease”) for combined apartments 12R and 12T (together, the “Unit”) in the building owned by the Co-op located at 9-21 Fifth Avenue, New York, New York and known as The Brevoort (“Building”). Plaintiff's husband-counsel, Stephen I. Siller, Esq. (“Mr. Siler’) also resides in the Unit with Plaintiff. The gravamen of the Original Complaint was that the Co-op allegedly breached the Lease and other documents by refusing to allow Plaintiff to replace her broken clothes washer with a new washer and outdoor-venting gas dryer of her choice because, among other reasons, outdoor-venting gas dryers do not comply with house rules promulgated by the Co-op’s board of directors (the “Board”) in 2010, over four (4) years prior to Plaintiff's washer/dryer falling into disrepair. Mrs. Siller, individually, was the sole named plaintiff and the Co-op was the sole named defendant in the Original Complaint. ' Citations to “Margolis Aff.” refer to the Affirmation of Barry G. Margolis, dated May 15, 2014 submitted herewith. Citations to “Comp!.” refer to Exhibit A to the Margolis Aff. The factual allegations in the Complaint are accepted as true for the purpose of this motion to dismiss only, except where flatly contradicted by documentary evidence. In a misguided attempt by Plaintiff's overzealous and self-interested husband-counsel to strong-arm the Board and “throw the first punch” in this washer/dryer dispute, Plaintiff filed a frivolous motion by order to show cause seeking a temporary restraining order and preliminary injunction affirmatively ordering the Co-op to allow Plaintiff to replace her broken machine with a washer and outdoor-venting gas dryer of her choice, notwithstanding any noncompliance with Co-op house rules or procedures. The Court properly denied Plaintiff's request for a temporary restraining order and her request for a preliminary injunction, holding that Plaintiff failed to meet her burden of establishing irreparable harm. (NYSCEF Doc. No. 31). There is a fully functional laundry room (the “Building Laundry Room”) in the basement of the Building for the common use of all residents. Frustrated with their failure to obtain a preliminary injunction, and in a transparent attempt to harass and intimidate Defendants, Plaintiff filed a First Amended Verified Complaint (“Complaint”) purporting to bring claims both individually and derivatively as a shareholder on behalf of the Co-op, against the Co-op eleven (11) individual, present and former Board Members. The Complaint alleges fifteen (15) claims for relief, often intermingling alleged direct and derivative claims rendering it impossible ascertain what capacity Plaintiff purports to assert each claim in and which defendant(s) Plaintiff purports to assert each claim against. Plaintiff asserts five (5) claims for a declaratory judgment (First through Fifth Claims); two claims for a permanent injunction (Sixth and Seventh Claims); claims for specific performance (Eighth Claim), prima facie tort (Ninth Claim), attorney’s fees (Tenth Claim), breach of contract (Eleventh Claim), tortious interference with prospective economic advantage (Twelfth Claim); and violation of Judiciary Law §487 (Thirteenth Claim); an unrelated property damage claim (Fourteenth Claim); and breach of fiduciary duty (Fifteenth Claim). The Complaint seeks, inter alia, $2 million in “damages” on the breach of contract and tort-based claims. As a threshold matter, the Complaint is procedurally defective. Plaintiff's impermissible intermingling of purported derivative and individual claims requires that the Complaint be dismissed in its entirety. The Complaint should also be dismissed because Plaintiff is not a proper representative for a derivative action, as she purports to assert direct claims against the Co-op for millions of dollars and other relief while in the same breath purporting to act as a fiduciary in the best interests of all of the Co-op’s shareholders by pursuing alleged derivative claims. Plaintiff's First through Fifth Claims for various declaratory judgments should be dismissed because a party may not seek a declaratory judgment where it has other available remedies or it merely seeks a declaration of the same rights and obligations asserted in other causes of action. Moreover, to the extent Plaintiff purports to seek declaratory relief under RPAPL § 1515, her claims should be dismissed because the Complaint does not allege the requisite claim to property as it is undisputed that the Co-op is the fee simple owner of the Building. Plaintiff's Eleventh Claim for breach of contract should be dismissed as to the individual defendants because it is undisputed that none of them, individually, had any contract with Plaintiff whatsoever. Furthermore, there was no breach by Defendants. As clearly demonstrated by the governing documents including the Co-op offering plan (“Plan”), by-laws (“By-Laws”), various house rules, Plaintiff's Lease and Plaintiffs 1990 alteration agreement with the Co-op, which are expressly referenced in the Complaint and can be considered on this motion to dismiss despite Plaintiffs failure to attach them to the Complaint. Plaintiff had no contractual grandfathering clause or property interest giving her the right to install any particular washing machine and dryer of her choosing a quarter-century after her now-defunct machine was allegedly first approved in 1990. To the contrary, the Plan and Bylaws state that any installation of a new washing machine or dryer would require the written consent of the Board and that the Board had the power to make or change house rules (which are incorporated into the Lease) at any time. Moreover, Plaintiff failed to comply with the contractually mandated notice requirements prior to filing this action which is, therefore a breach of the Lease. Plaintiff's Sixth and Seventh Claims for injunctive relief should be dismissed because injunctive relief is simply not available when the plaintiff does not have any remaining substantive cause of action. Furthermore, Plaintiff cannot allege the requisite irreparable harm and absence of a legal remedy necessary to state a cause of action for a permanent injunction. Plaintiffs Ninth Claim for prima facie tort should be dismissed because Plaintiff improperly attempts to use this claim as a catch-all alternative for her other unsustainable causes of action. Plaintiff also fails to allege special damages because no “actual losses” are alleged with specificity or otherwise that are causally attributable to any alleged tortious conduct by defendants. Plaintiff inexplicably demands $2 million on this cause of action but the only “special damage” she purports to allege is being denied use of a clothes washer and dryer in her apartment and instead having to use “inconvenient” machines in the basement of the building. (Compl. §127(e)). In addition, Plaintiff cannot allege that defendants were solely motivated by disinterested malevolence. Plaintiff's Tenth Claim for attorneys’ fees and expenses should be dismissed because the statutes relied upon by Plaintiff do not provide for an award of attorneys’ fees in the circumstances presented here. Plaintiff's Twelfth Claim for tortious interference with prospective economic adcantage should be dismissed because there is no “but for causation”, as Plaintiff cannot allege the name of the party to any specific contract she would have obtained had the Co-op permitted her to install appliances as she wishes. Plaintiff fails to allege she ever attempted to sell the Unit or that it was on the market, much less allege the existence or identity of an actual prospective buyer that would have bought her Unit but for the alleged “interference.” The Complaint fails to allege “wrongful means.” Plaintiff's Thirteenth Claim for violation of Judiciary Law § 487 should be dismissed because even assuming arguendo that the Nardone Aff? contained false statements, Plaintiff suffered no injury from any statement made in the Nardone Aff., as the Court denied Plaintiff's frivolous motion for a preliminary injunction because she failed to demonstrate irreparable harm, which was Plaintiffs burden. In any event, as is set forth herein, there are no actionable statements in the Nardone Aff. Plaintiff's Fifteenth Claim for breach of fiduciary should be dismissed because Plaintiff cannot allege any wrongdoing by members of the Board separate and apart from their collective actions taken on behalf of the Co-op. This claim should also be dismissed because it is largely duplicative of Plaintiffs breach of contract claim. Moreover, all of the foregoing claims should be dismissed because they are barred by the Business Judgment Rule, which does not permit the Court to review the reasonableness of the Board’s conduct here. Plaintiff's conclusory allegations of discriminatory conduct and bad faith do not overcome the presumption of regularity created by the business judgment rule, Finally, Plaintiff's Fourteenth Claim for property damage in the amount of $1,740.91, to the extent it may survive this motion to dismiss, should be transferred to the Civil Court for adjudication there. ? Citations to “Nardone Aff.” refer to the previously filed Affirmation of Diane C. Nardone In Opposition to Order To Show Cause, dated February 17, 2014. (NYSCEF Doc. No. 9). The Nardone Aff. is resubmitted herewith as Exhibit G to the Margolis Aff. STATEMENT OF FACTS A. Background On or about December 15, 1989, Plaintiff and Mr. Siller, then co-lessees of Unit 12T, contracted to lease Unit 12R with the intention of combining the two units. (Compl. 82). By letter dated December 26, 1989, the Sillers’ counsel wrote to the Co-op to “request that the Board’s approval of the Sillers’ purchase of Apartment 12R [also] include the approval, in concept, of the joining by the Sillers of the two apartments.” (Compl. $83). On June 25, 1990, the Sillers entered into an alteration agreement with the Co-op (“1990 Alteration Agreement”) and on July 24, 1990 the proposed alterations were approved. (Compl. { 85). On or about September 4, 1990, Plaintiff and her husband closed on Unit 12R and began renovations to combine Unit 12R with 12T (Compl. 488). As part of the renovations, Plaintiff installed a clothes washer, gas dryer and dryer vent. (Compl. 488). In January 1992, the building superintendent allegedly inspected the dryer vent and sent a note to the Board that he had done so. The Complaint refers to this as the “Dryer Vent Inspection Letter.” (Compl. {16(b)). On or about April 18, 2001, Plaintiff and the Co-op entered into the Lease, which supersedes any prior leases. (Compl. 47). When Plaintiff's washing machine broke in January 2014 and replacement parts were unavailable, she assumed that obtaining an insurance certificate was “the only thing plaintiff needed to do.” (Compl. 4 5). The gas dryer still works normally. (Compl. §3). However, according to the Complaint, Plaintiff also needs to replace the gas dryer “because the gas dryer is stacked in the same physical unit as the washer.” (Compl. 43). In emails exchanged between January 31 and February 4, 2014, Plaintiffs husband allegedly advised the Co-op of this “situation.” (Compl. § 4). The Co-op, however, refused to allow plaintiff to replace her existing washer and gas dryer with “like machines.” (Compl. 45). Among its reasons were certain 2010 amendments to the Co-op’s house rules (which were carried forward when these rules were later amended in 2012) limiting the installation or replacement of washers and dryers in shareholder units to brands researched and selected by the Board based on various product features, including the fact that the dryers were self-venting. (See Nardone Aff. attached as Exhibit G to Margolis Aff? Plaintiff speculates “upon information and belief, it would be defendants’ position that if any appliance or device involved in any of the other Existing Conditions broke, plaintiff would have to remove that appliance and device and close up its brick penetration.” (Compl. { 12). B. The Original Complaint and Frivolous Motion For A Preliminary Injunction On February 13, 2014, Plaintiff filed the Original Complaint against The Co-op seeking various forms of declaratory and injunctive relief and damages concerning the Co-op’s alleged breaches of the Lease. Plaintiff also filed an Order to Show Cause seeking a temporary restraining order and preliminary injunction enjoining the Co-op from “interfering with or refusing to allow Plaintiff to replace her washer/dryer.” On February 18, 2014, the Co-op filed the Nardone Affirmation in opposition to Plaintiff's Order to Show Cause. The Court denied Plaintiff's request for a TRO and scheduled a hearing on her request for a preliminary injunction for March 17, 2014. (NYCEF Doc. No. 10). After briefing and oral argument on Plaintiff's Order to Show Cause, the Court denied Plaintiff's motion for a preliminary injunction by Order dated March 17, 2014, holding that Plaintiff failed to meet her burden of establishing irreparable harm. (NYSCEF Doc. No. 3 nA 3 As Plaintiff repeatedly references them in the Complaint, the Nardone Aff., and the documents that are exhibits thereto, may be considered in connection with Defendants’ motion to dismiss. (see Compl. {f/6, 11, 14, 15(a) — 15(d), 23-25). Had Plaintiff moved forward with the steps necessary to obtain and install a Board-approved washer and dryer — rather than joining Mr. Siller in wasting judicial resources and attempting to intimidate the Board with a frivolous application for “emergency” relief, Plaintiff likely could have been using a brand new washing machine and dryer (albeit a self-venting one) in her Unit months ago. C. The First Amended Complaint On March 28, 2014, Plaintiff filed a Complaint “individually and derivatively as a shareholder of, and on behalf of, The [Co-op],” asserting fifteen (15) legally deficient and largely duplicative causes of action. (Margolis Aff. Ex. A). In a transparent attempt to harass and intimidate the Board after Plaintiff's unsuccessful attempt to garner a preliminary injunction, Plaintiff named, along with the Co-op, eleven (11) individuals, present and former Board Members, as defendants, notwithstanding the absence of any contractual relationship between Plaintiff and these individuals concerning her unit, her appliances, or otherwise. The Complaint alleges that the Co-op’s 2010 and 2012 House Rules cannot “vary amend, modify or abrogate the Lease.” (Compl. ff] 14, 21). The Complaint alleges that defendants violated alleged duties to all shareholders by, inter alia, adopting and enforcing House Rules against Plaintiff, prohibiting Plaintiff from installing the washer and gas dryer she wishes to install, and ignoring the “unique physical conditions” of Plaintiff's Unit, breaching Plaintiff's Lease, and making misrepresentations to the Court in this action filed by Plaintiff over her washer/dryer. (Compl. {26€)-(g)). ARGUMENT “The applicable standard for determining a CPLR 3211(a)(7) motion is whether, within the four corners of the complaint, any cognizable cause of action has been stated.” Scott v. Bell Atlantic Corp., 282 A.D.2d 180, 183, 726 N.Y.S.2d 60, 63 (1" Dep’t 2001), citing Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 185 (1977). “It is well settled that bare legal conclusions and factual claims, which are either inherently incredible or flatly contradicted by documentary evidence...are not presumed to be true on a motion to dismiss for legal insufficiency.” O'Donnell, Fox & Gartner, P.C. v. R-2000 Corp., 198 A.D.2d 154, 154, 604 N.Y.S.2d 67, 68 (1% Dept. 1993). Under CPLR 3211(a)(1), “A party may move for judgment dismissing one or more causes of action asserted against him on the ground that: (1) a defense is founded upon documentary evidence...” N.Y.C.P.L.R. 3211(a)(1)(McKinney 2009). “The court . . . is not required to accept factual allegations, or accord favorable inferences, where the factual assertions are plainly contradicted by documentary evidence.” Bishop v. Maurer, 33 A.D.3d 497, 498, 823 N.Y.S.2d 366, 367 (1st Dep’t 2006). “[Allegations consisting of bare legal conclusions, as well as factual claims either inherently incredible or flatly contradicted by documentary evidence, are not presumed to be true and accorded every favorable inference.” Biondi v. Beekman Hill House Apartment Corp., 257 A.D.2d 76, 81, 692 N.Y.S.2d 304, 308 (1st Dep’t 1999) (internal citations omitted). “{I]t is undisputed that the Court, on a CPLR 3211(a)(1) or (7) dismissal motion, may consider documents referred to in a Complaint. . . even if the pleading fails to attach them. Deer Consumer Products Inc. y. Little, No. 650823/2011, 2011 WL 4346674 at *4 (Sup. Ct. N.Y. County, Aug. 31, 2011); see Alliance Network, LLC v. Sidley Austin LLP, No. 653731/2012, 2014 WL 1258222 at n.1 (Sup. Ct., N.Y. County March 20, 2014). “Where a variance exists between the written contract and the conclusion drawn by the pleader, the writing must prevail over the allegations of the complaint.” La Potin v. Julius Lang Co., 30 A.D.2d 527, 528, 290 N.Y.S.2d 619, 620 (1 Dep’t 1968). I THE COMPLAINT MUST BE DISMISSED BECAUSE PLAINTIFF’S PURPORTED DERIVATIVE CLAIMS ARE PROCEDURALLY DEFECTIVE A. Plaintiff’s Improper Intermingling of Alleged Direct and Derivative Claims Requires Dismissal of the Complaint In Its Entirety “A complaint the allegations of which confuse a shareholder’s derivative and individual rights will .. . be dismissed.” Abrams v. Donati, 66 N.Y.2d 951, 953, 498 N.Y.S.2d 782, 783 (1985); Yudell v. Gilbert, 99 A.D.3d 108, 115, 949 N.Y.S.2d 380, 384 (1* Dep’t 2012)(same). Thus, “[t]he intermingling of derivative and individual claims requires dismissal of the entire complaint.” Jones v. Citigroup, Inc., No. 570210/10, 2010 WL 2944224 at *1 (Sup. Ct, App. Term July 27, 2010); Vargas v. Hennigan, No. 2011-1391SC, 2012 WL 5290355 at *1 (Sup. Ct., App. Term. Oct. 18, 2012); see Balk v. 125 W. 92" St. Corp., 24 A.D.3d 193, 194, 806 N.Y.S.2d 31, 32 (Ist Dep’t 2005). Here, the Complaint is an amalgam of Plaintiff's alleged personal claims impermissibly intermingled with alleged derivative claims. Paragraph 32 of the Complaint alleges “/mjost of plaintiffs claims against the individual defendants are derivative through the corporate defendant,” while paragraph 144 alleges that “/aJll or most of plaintiff's claims against each of the individual defendants are derivative through the corporate defendant.” (Compl. {J 32, 144)(emphasis added). Adding to the confusion, the first fourteen claims alleged in the Complaint are not expressly designated as either direct or derivative, though many of them refer to “defendants” in the plural, despite the fact that they involve Plaintiff's alleged personal contract rights under her Lease with the Co-op, which none of the Board Members are a party to (e.g. Fifth Claim $115, Sixth Claim 4118, Seventh Claim Heading p.37, Ninth Claim 4127, Eleventh Claim §134; Twelfth Claim § 137, Thirteenth Claim 140). Other claims do not mention the corporate defendant or the Individual Defendants at all (e.g. Second Claim, {] 106, Tenth Claim, §§ 130-131), and it is therefore unknown what capacity Plaintiff purports to assert them in or which defendant(s) Plaintiff purports to assert them against. Plaintiff concedes that the Lease “only allows the individual defendants acting as a board, and not individually, to adopt House Rules.” (Compl. { 26(a)). It is therefore impossible to decipher whether Plaintiff is purporting to assert her alleged claims directly or derivatively. Plaintiff’s Fifteenth Claim — the only cause of action Plaintiff expressly denominates as a “Derivative Claim” for breach of fiduciary duty — alleges that the individual defendants, inter alia, “exceed[ed] their authority 10 under the Lease,” breached their alleged “duty of good faith and fair dealing,” and took actions “targeted at plaintiff’ and “discriminatory against plaintiff.” (Compl. 152). Plaintiff is merely recasting her contract-based claims as an alleged breach of fiduciary duty and masquerading them as a “derivative” claim. Accordingly, the confusion and intermingling of Plaintiffs alleged direct and derivative claims in the Complaint requires that it be dismissed. See Abrams, 66 N.Y.2d at 953, 498 N.Y.S.2d at 783; Yudell, 99 A.D.3d at 115, 949 N.Y.S.2d at 384; Jones, 2010 WL 2944224 at *1; Vargas, 2012 WL 5290355 at *1; Balk, 24 A.D.3d at 194, 806 N.Y.S.2d at 32. B. Plaintiff Cannot Demonstrate That She Will Fairly And Adequately Represent The Interests of the Corporation and Its Shareholders “{S]tock ownership, although an absolute precondition to the maintenance of [a derivative] action, does not automatically entitle a shareholder to sue derivatively. Because she seeks to use a remedy designed to vindicate rights of the corporation and the other shareholders, she makes herself a fiduciary.” Steinberg v. Steinberg, 434 N.Y.S.2d 877, 878 (Sup. Ct., N.Y. County 1980). “The plaintiff must therefore demonstrate that she will fairly and adequately represent the interests of the shareholders and the corporation, and that she is free of adverse personal interest or animus.” Jd. Thus, “the courts have held that a plaintiff is an inappropriate representative for a derivative action if that plaintiff is asserting direct claims along with derivative claims.” Baker v. Andover Assocs. Man. Corp., No. 6179/09, 2009 WL 7400085 at *16 (Sup. Ct. Westchester County Nov. 30, 2009). See JFK Family Ltd. Partnership v. Millbrae Natural Gas Dev. Fund 2005, L.P., No. 10591/07, 2008 WL 4308289 at * 15 (Sup. Ct. Westchester County Sept. 16, 2008); Wall Street Systems, Inc. v. Lemence, No. 04 Civ. 5299(JSR), 2005 WL 292744 at *3 (S.D.N.Y. Feb. 8, 2005)(“an individual shareholder has a conflict of interest, and therefore cannot adequately represent other shareholders, when he simultaneously brings a direct and derivative action.”). 11 Here, Plaintiff is impermissibly pursuing alleged direct and derivative claims in the Complaint. Plaintiff is suing the Co-op for millions of dollars and other relief while at the same time purporting to act on behalf of the Co-op by seeking reimbursement for the amounts Plaintiff is fiercely seeking from the Co-op. Moreover, Plaintiff admits that she “does not know” if some of the other shareholders she purports to derivatively represent were actually board members of the Co-op at the time the allegedly improper House Rules were approved, and therefore persons potentially adverse to Plaintiff. (Compl. { 38). Plaintiff, therefore, is hopelessly conflicted and an inadequate shareholder representative for a derivative action as she is also, individually, alleging direct claims. Accordingly, the Complaint should be dismissed. See Baker, 2009 WL 7400085 at *16; JFK Family, 2008 WL 4308289 at * 15; Wall Street Systems, 2005 WL 292744 at *3. IL. PLAINTIFF’S FIRST THROUGH FIFTH CLAIMS FOR A DECLARATORY JUDGMENT FAIL TO STATE A CAUSE OF ACTION “Where there is no necessity for resorting to the declaratory judgment it should not be employed.” Anonymous y. Axelrod, 92 A.D.2d 789, 459 N.Y.S.2d 778, 779 (1* Dep’t 1983) quoting James v. Alderton Dock Yards, 256 N.Y. 298, 305 (1931). Thus, where an adequate remedy exists or is alleged in a complaint under a breach of contract or other theory, a cause of action for a declaratory judgment is improper and should be dismissed. Sullo v. Margab Realty, LLC, No. 109246/07, 2008 WL 2699542 at * 4 (Sup. Ct, N.Y. County June 11, 2008) (dismissing cause of action for declaratory judgment “because it parallels the other claims and merely seeks a declaration of the same rights and obligations.”); Barker v. Time Warner Cable, Inc., No. 016438/08, 2009 WL 1957740 at *9 (Sup. Ct., Nassau County July 1, 2009)(‘‘a party may not seek a declaratory judgment when the party has other available remedies, such as an action for breach of contract.”). 12 Here, Plaintiff's First through Fifth Claims are for judgments declaring various contractual rights of the parties “under RPAPL 1515 or otherwise.” Specifically, Plaintiff seeks a declaration (i) “as to whether merely replacing the Existing Washer and Gas Dryer would constitute a violation of the 2010/2012 House Rules or the Lease” (First Claim, Compl. {{]102- 103); (ii) that all of the “Existing Conditions” (as defined in the Complaint) “may be maintained, repaired and replaced with like appliances or devices by plaintiff and any successor in interest to plaintiff for the duration of the Lease (Second Claim, Compl. {]105); (iii) that certain House Rules “are null and void” because they are “inconsistent and conflict with [the] Lease”(Third Claim, Compl. 109); (iv) that the Co-op “be barred from any and all claims to an estate or interest in the property described in th{e] Complaint in which Plaintiff has an interest” (Fourth Claim, Compl. § 112); and (v) that defendants “at their sole cost and expense, jointly and severally, must pay all costs for plaintiff? to do various work allegedly required to install appliances compliant with Co-op requirements. (Compl. ¥ 115). As Plaintiff's claims for declaratory relief merely recast her breach of contract and tort claims in the form of a request for a declaratory judgment, they are improper and should be dismissed. See Anonymous, 92 A.D.2d at 789, 459 N.Y.S.2d at 779; Sullo v. Margab Realty, LLC, 2008 WL 2699542 at * 4; Barker, 2009 WL 1957740 at *9. Moreover, to the extent Plaintiff purports to seek declaratory relief under RPAPL §1515, her claims should be dismissed because the Complaint does not allege the requisite claim to property. It is undisputed that the Co-op “own[s] the Building in fee simple” and Plaintiff is a tenant-shareholder. (Compl. 51). “Essential to the maintenance of an action to determine a claim to real property is that the complaint state a claim by the defendant, of ‘an estate or interest in the real property, adverse to that of the plaintiff (RPAPL 1515[1][b] emphasis added).” “Where, as here, the parties recognize that the basis of the tenant’s claim is an interest pursuant 13 to a lease, no claim adverse to the landlord’s interest in the property is asserted, and the complaint fails to state a cause of action.” East 41% Street Assocs. v. 18 East 42" Street, L.P., 248 A.D.2d 112, 114, 669 N.Y.S.2d 546, 548 (1 Dep’t 1998); see 81 Bowery Realty Corp. v. Qui Hui Chen, No. 106565/05, 2008 WL 2447335 at *4 (Sup. Ct, N.Y. County, June 18, 2008)(‘the basis of the tenant[s’] claim is an interest pursuant to a lease, no claim adverse to the landlord’s interest in the property is asserted, and the complaint fails to state a cause of action.”) (internal quotation marks omitted). Plaintiff has no unfettered “property” right to install any replacement machines of her choice in perpetuity, in any manner she sees fit and in contravention of all of the governing corporate documents she agreed to. As the court held in Cannon Point North, Inc. v. Abeles, 160 Misc. 2d 30, 32, 612 N.Y.S.2d 289, 290 (App. Term., 1* Dep’t, 1993): The fact that respondents were permitted to maintain their appliances with the apparent knowledge of various building employees did not preclude petitioner’s board of directors from establishing and enforcing a specific house rule addressed to this subject. Pursuant to the proprietary leases, the board at any time could ‘alter amend and repeal’ the house rules, and it cannot be reasonably argued that respondents had somehow acquired vested rights in the continued maintenance of these machines. Having chosen the cooperative form of ownership, [respondents are] bound to abide by the rules and regulations governing its operation. Accordingly, the First through Fifth Claims in the Complaint for declaratory relief should be dismissed. il. PLAINTIFF’S BREACH OF CONTRACT CLAIM FAILS TO STATE A CAUSE OF ACTION AND SHOULD BE DISMISSED Plaintiff's Eleventh Claim is for breach of contract. Plaintiff alleges that “[b]y denying plaintiff the right to purchase and install a replacement washer/dryer described in this Complaint, defendants breached or caused the breach of the Contracts and Existing Approvals, and also breached the individual defendants’ covenants of good faith and fair dealing implied in every 14 Contract.” (Compl $134). For the reasons stated herein, the Complaint fails to state a cause of action for breach of contract and, therefore, Plaintiff's Eleventh Claim should be dismissed. A. The Individual Defendants Are Not Parties To Any Contract With Plaintiff Plaintiffs breach of contract claim should be dismissed as to the individual defendants because it is undisputed that none of them, individually, had any contract with Plaintiff whatsoever. See Balk, 24 A.D.3d at 194, 806 N.Y.S.2d at 32 (“Since the individual defendants are not signatories to the proprietary lease . . no breach of contract can be asserted against them.”). “Where a variance exists between the written contract and the conclusion drawn by the pleader, the writing must prevail over the allegations of the complaint.” La Potin v. Julius Lang Co., 30 A.D.2d at 528, 290 N.Y.S.2d at 620. The Complaint fails to allege any contract between Plaintiff and any of the Individual Defendants. B. The Governing Documents 1. The Offering Plan Plaintiff's breach of contract claim should also be dismissed as to all defendants because the governing documents flatly contradict the allegations and conclusively establish that there was no breach of contract as a matter of law. The Plan provides that “gas for cooking” — not for drying clothes — “will be furnished by the [Co-op], and the cost thereof is included in the maintenance charges for each apartment.” (Margolis Aff. Ex. B at 3)(emphasis added). The Plan further provides that “[s]pecial electrical appliances, such as electric ranges, clothes washing machines and clothes dryers may not be installed after the Operative Date of the Plan without the prior written consent of the board of directors.” (Margolis Aff. Ex. B at 11). Thus, it has always been clear from day 1 that “consent of the board” is required to install any machine, whether it is a first-time installation or a replacement machine. 1S 2. The By-Law: Article II, Section 6 of the By-Laws of the Co-op, entitled “House Rules,” provides: “The board of directors shall have power to make and change the house rules applicable to the apartment building of the corporation whenever the board deems it advisable so to do. All house rules shall be binding upon all tenants and occupants of the apartment building.” (Margolis Aff. Ex. C at 10). 3. The 1985 House Rules Section 3.3 of the Amended House Rules as of June 17, 1985 (the “1985 Amended House Rules”), provides: No ventilator, air-conditioning device, dishwasher, clotheswasher, clothes dryer or other apparatus shall be installed by the Lessee without prior written approval of the Lessor as to the type, location and manner of installation of such device. Each Lessee shall keep any such device in good appearance and mechanical repair ... If any Lessee shall fail to keep such a device in good order and repair and, in the case of a ventilator or air-conditioning device, properly painted, the Lessor in its discretion may remove the same. The cost of such removal shall be paid for by the Lessee, and the device shall not be replaced until put in proper condition and then only with the further written approval of the Lessor, which need not be given. (Margolis Aff. Ex. D, §3.3)(emphasis added). Section 3.10.10 of the 1985 Amended House Rules contains a non-waiver provision regarding the approval of alterations: Any approval by the Lessor of any alteration shall not be considered a waiver of any of the terms of the Lease including the House Rules or Amended House Rules. (Margolis Aff. Ex. D, §3.10.10)(emphasis added). Section 4.5 of the 1985 Amended House Rules provides that “[aJny consent or approval given under these House Rules by the Lessor shall not create any legal rights in the Lessee and shall be revocable by the Lessor at any time. (Margolis Aff. Ex. D, §4.5) (emphasis added). Section 4.6 provides: “[t]hese house rules are subject to change, modification or revocation at any time.” 16 Pursuant to Section 3.10.11 of the 1985 Amended House Rules, lessees release the Corporation from any and all liability resulting from or in any way connected with an alteration and waive “all” claims against the Cooperative based on interruption or suspension of the alteration “irrespective of the reason for such interruption or suspension.” ((Margolis Aff. Ex. D, §3.10.10)(emphasis added). Plaintiff concedes the 1985 Amended House Rules were in effect in 1990. (Compl. § 33). 4, The 1990 Alteration Agreement On or about June 25, 1990, the Sillers entered into an alteration agreement with the Co- op (the “1990 Alteration Agreement”)(Margolis Aff. Ex. E). The 1990 Alteration Agreement, like the 1985 Amended House Rules, contains a no-waiver clause and waives and releases claims against the Co-op concerning the alterations or “any interruption or suspension of the alterations regardless of the reason”: 10. Any approval by The Third Brevoort Corporation of any work to be done by the Cooperator will not be considered a waiver of any of the terms of the Proprietary Lease including the House Rules. 11. The Cooperator does hereby release The Third Brevoort Corporation and its Managing Agent from any and all liability for loss or damage to any of the Cooperator's property which may result or be in any way connected to the Cooperator's work, and the Cooperator hereby waives any claim the Cooperator may now or hereafter have against The Third Brevoort Corporation or its Managing Agent based upon any interruption or suspension of the alterations regardless of the reason for such interruption or suspension... (Margolis Aff. Ex. E, §§ 10-11). 5. The Lease The Lease expressly supersedes all prior leases to the Units and renders them null and void. (Margolis Aff. Ex. F, § Tenth). Paragraph Twelfth of the Lease prohibits Plaintiff from filing any action or proceeding against the Co-op unless the alleged “default, breach or failure continues for thirty days after the giving of written notice thereof by Lessee to Lessor.” 17 (Margolis Aff. Ex. F, § Twelfth). Such notice “shall be given . . . by registered or certified mail addressed to the Lessor . . . with a copy to the then managing agent of the building.” (Margolis Aff. Ex. F, § Twenty Sixth). Plaintiff never provided the Co-op or its managing ag