2018 NY Slip Op 51958

Citation: 2018 NY Slip Op 51958
Jurisdiction: New York (state)
Source verification: cross_accepted_sealed
Original Source: https://www.nycourts.gov/reporter/3dseries/2018/2018_51958.htm ↗

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illegal occupancies, and to eject the cellar unit shareholders "if necessary" (Amended 2017
complaint, ¶¶ 138, 139), allegations which seemingly leave open the cellars'
legalization as a possible resolution. See also id., ¶ 89 (emphasis added) (Board
breaches its obligations if it does nothing to "correct[]" or stop the illegal cellar
uses).

Defendants seek dismissal of plaintiffs' derivative causes of action on various substantive
grounds. Defendants' counsel also surmises that Dogwood LLC or someone on its behalf placed a
311 call and reported that the cellar units' occupancy had been changed to bedrooms, rendering
the use illegal, thereby triggering inspection of the cellar units and the issuance of the DOB
violation, and exposing Stable to the possibility of future fines and expenses. See
Peterson affidavit in support of defendants' motion to dismiss the amended 2017 complaint,
at 4, n 1. Defendants assert that plaintiffs' goal was to use the DOB violation and these derivative
causes of action as a bargaining tool in its attempt to obtain the required consent to its renovation
plans. Accordingly, defendants maintain that it would be improper to allow Dogwood LLC to
bring any derivative claim on Stable's behalf and that such causes of action must be
dismissed.

The branch of defendants' motion which seeks an order dismissing Dogwood LLC's
derivative causes of action solely on the ground that the relationship between the parties are such
that Dogwood LLC cannot act as a proper representative of Stable on these claims is denied at
this juncture. Assuming, for argument's sake, that a Dogwood LLC representative reported the
illegal cellar occupancies to DOB, Dogwood LLC had the right to do so. Dogwood LLC has an