By: Gartner + Bloom, P.C.
Date: December 11, 2017
Under the leadership of Alex Fisher, g + b was proud this year to participate in the New York Cares Winter Wishes program. The program collects children’s letters to Santa and sends them to volunteers who play Santa and buy, wrap and deliver the gifts before Christmas. Our attorneys and staff provided gifts for twenty-five boys and girls in the New York City area ranging in age from 5 to 11.
For background on the project, visit https://www.newyorkcares.org/winter-wishes/about.
| Alex Fisher, Alexander D. Fisher, condominiums, construction defect, construction law, damages, Gartner + Bloom, Hudson Pointe Condominium Association, New Jersey
In a recent New Jersey decision, this Firm succeeded in obtaining partial summary judgment in a construction defect case, dismissing multiple causes of action and claims against our client. With this decision, the Court dismissed over 98% of the Plaintiff’s claimed damages of $6.1 million asserted against our client. The case is Views at Hudson Pointe Condominium Association v. K. Hovnanian at Hudson Pointe, LLC, et al., venued in Superior Court, Hudson County.
In the Views at Hudson Pointe case, Plaintiff condominium association claims significant construction defects in a large residential condominium complex located on the shores of the Hudson River in North Bergen, New Jersey. Our client, a concrete subcontractor, is alleged to have been responsible for concrete cracking and piping deficiencies in the two on-site garages. As part of a plan to repair the alleged cracking, Plaintiff’s expert opined that an expensive traffic coating would be needed in each garage, at an approximate cost of $5.8 million dollars.
Through discovery, the following was determined: (1) the garage plans provided to our client did not include a traffic coating; (2) our client was not contracted to put down such a coating; (3) our client was not retained to design the garages, only to construct them; (4) no one ever requested our client to install a traffic coating; (5) Plaintiff’s expert stated that the inclusion of a traffic coating would have been a “better design” for the garages; and (6) multiple parties acknowledged that our client had no role in the installation of piping, and that the claimed deficiencies were the responsibility of the piping contractor.
Accordingly, we moved for summary judgment at the close of discovery, on the grounds that the installation of a traffic coating was an obligation not found in the contract and for which Plaintiff could not recover. In granting this portion of the motion, the Court found it clear that the traffic coating had not been part of the original plans for the garages. Furthermore, the Court found that our client had no role in the design of the garages, and therefore, could not be held responsible for the proposed cost of installing such a coating. Therefore, the Court limited the Plaintiff’s recoverable damages against our client to the cost of repairing the cracks in the garages with concrete filler, which Plaintiff’s own expert estimated at approximately $100,000.00 dollars.
The Court also dismissed the claims relating to piping in the garages, stating that the evidence clearly showed that our client played no role in this work.
This decision highlights that a Plaintiff in a construction defect matter may only recover damages that provide them with the benefit of the bargain
– in this case, two garages without a traffic coating. A Plaintiff in this type of action is not entitled to receive a better building than was envisioned by the plans.
It is common for condominium association experts in construction defect cases to inflate the cost to repair the alleged defects by inserting items that substantially improve upon the design of a particular building. With this decision, the Court affirmed that a plaintiff will not be permitted to inflate its damages estimates in order to improve a building with upgraded designs and/or materials.
Recently, the Firm succeeded in obtaining summary judgment on behalf of our client - a well-known catering establishment in Great Neck, New York - in a case involving a dispute over the ownership rights of shares in a family-owned business.
In this matter, Plaintiff, one of the sons of the deceased founder of the business, sought to block his stepmother from taking shares of the company that had been bequeathed to her by the decedent’s “pour over” will and subsequent trust. Plaintiff argued that per the terms of a shareholders agreement for the business, which pre-dated the will by almost 20 years, his stepmother was not entitled to hold the shares because the agreement had purportedly limited the right to hold shares to “family members”. Plaintiff argued that as a spouse of the decedent, his step-mother did not qualify as a “blood” relative, and therefore was not a family member. He also noted that a separate clause in the agreement required any spouse who was no longer married to a member of the decedent’s family to return her shares in the company, and argued that since the decedent had passed away, his stepmother could no longer be married to him. He accordingly commenced a declaratory judgment action seeking a declaration that his stepmother was not entitled to hold these shares, and forcing her to sell the shares to the remaining shareholders, including Plaintiff.
In our motion for summary judgment, we argued that there was no language in the shareholders agreement that limited the right to hold shares to “blood” relatives – rather, the agreement limited the right to hold shares to family members. Accordingly, as the spouse of the decedent at the time of his death, the stepmother was clearly a family member under any reasonable definition of the term. We noted that the requirement in the agreement requiring divestiture of shares in the company once a spouse was no longer married to a member of the decedent’s family was clearly limited to spouses of the decedent’s relatives – there was no clause requiring the spouse of the decedent himself to return any shares she held. We also noted that Plaintiff had repeatedly acquiesced to his stepmother receiving the shares, both in a very detailed waiver agreement signed in Florida at the time of the distribution of shares from the trust, and in multiple clear ratifications of his stepmother’s status as a shareholder thereafter. Furthermore, we argued that per the terms of the waiver, any contest to the terms of the trust were to be made in Florida under Florida law, and that pursuant to the statute of limitations governing such claims in Florida, Plaintiff was barred by the statute of limitations from challenging the terms of the trust.
In his decision, Nassau County Justice Thomas Feinman agreed with our position that Plaintiff’s stepmother unquestionably qualified as a member of the family based upon even a narrow reading of the term “family”. The Court also found that the terms of the agreement did not contemplate the return of shares held by the decedent’s spouse upon his death, but only those shares held by a spouse of the decedent’s relatives. Moreover, Justice Feinman noted that Plaintiff had unequivocally waived his right to challenge the grant of shares to his stepmother when he executed the waiver agreement at the time the shares were transferred. The Court therefore granted our clients summary judgment as to all claims asserted against them.
This decision highlights the value of a well-worded waiver agreement relating to the distribution of property from an estate or a trust, particularly when there may be the potential for inter-family squabbles down the line. Such an agreement allows the parties finality, and ensures that an aggrieved relative will not seek to undo various grants of property years later. The decision also illustrates the value of a carefully drafted agreement regarding transfer of shares in a business, and how a seemingly mundane choice of words when drafting agreements can have massive unforeseen consequences a generation later.
The decision, Sessa v Sessa, can be found on this Firm’s website under Publications.
| Alex Fisher, Alissa Mendys, Anne Armstrong, Arthur Xanthos, attorneys, Christine Messina, Gartner + Bloom, Jeff Miragliotta, Ken Bloom, Marc Shortino, Stuart Gartner, Susan Mahon
G + B is pleased to announce the relocation of our New York offices. To accommodate our continued growth, you will now find us in significantly larger premises at 801 Second Avenue occupying the entire 11th floor. Our new state of art facilities are designed to serve our clients more effectively, and comfortably and efficiently accommodate our current professional and support staff as well as our anticipated expansion over the next several months and years.
Drop by to say hello and tour the new place!
Drop by to say hello and tour the new place!