First Department, July 28, 2016

Jerdonek v 41 West 72 LLC, 2014 NY Slip Op 30957(U), modified.

Baxter, Smith & Shapiro, P.C., Hicksville (Joseph M. Guzzardo of counsel), for appellants.

The Perecman Firm, PLLC, New York City (David H. Perecman and Peter D. Rigelhaupt of counsel), for respondents.

Plaintiff was injured in a fall from a scaffold while he was working in a boiler room that is a common element of the condominium{**143 AD3d at 45} apartment building at 41 West 72nd Street in [*2]Manhattan, known as the Hermitage Condominium. All members of this panel agree that plaintiff is entitled to summary judgment as to liability under Labor Law § 240 (1) against the party that owned the property on which he was injured when the accident occurred in February 2009. Because a declaration converting the building to condominium status was recorded in 2001, more than seven years before the accident, it is plain, under our precedents, that, at the time of the accident, the "owner" of the condominium's common elements, for purposes of this tort action, was defendant the Board of Managers of the Hermitage Condominium (hereinafter the Hermitage board), not defendant 41 West 72 LLC, the entity that sponsored the conversion, regardless of 41 West 72 LLC's continued ownership of some of the building's individual units. It is the Hermitage board, not the former sponsor, that exercised exclusive control over the building's common elements and entered into the contract for the lobby renovation project in the course of which plaintiff was injured. The Hermitage board is a named defendant that has appeared in this action and is actively defending it; there is no reason to believe that the Hermitage board might lack the resources to satisfy plaintiff's ultimate judgment. Moreover, plaintiff himself, through his counsel at the argument of this appeal, has stated that he does not oppose dismissing 41 West 72 LLC from the action, so long as he is granted summary judgment against the Hermitage board. Accordingly, while we affirm other aspects of Supreme Court's order, we modify it to grant 41 West 72 LLC's motion for summary judgment dismissing plaintiff's Labor Law claims as against it and, upon a search of the record, to grant plaintiff summary judgment as to liability on his claim under Labor Law § 240 (1) as against the Hermitage board.

Initially, we address the merits of plaintiff's cause of action under Labor Law § 240 (1). Plaintiff's testimony that he fell and was injured when the scaffolding on which he was working moved establishes prima facie that the statute was violated and that the violation was a proximate cause of plaintiff's injuries (see Zengotita v JFK Intl. Air Term., LLC, 67 AD3d 426 [1st Dept 2009]). The conflicting testimony of Carlos Alvarado, an employee of defendant Bar Construction Corp., the general contractor that hired plaintiff's employer, does not preclude partial summary judgment in plaintiff's favor, since the statute was violated under either version of the accident (see Romanczuk v Metropolitan Ins. & Annuity Co., 72 AD3d {**143 AD3d at 46} 592 [1st Dept 2010]). Bar Construction's foreman's admission that the first level of the scaffolding did not have middle or top guardrails also establishes a violation of the statute (see Ritzer v 6 E. 43rd St. Corp., 57 AD3d 412 [1st Dept 2008]). The record does not support defendants' argument that plaintiff was the sole proximate cause of his accident or a recalcitrant worker since plaintiff's fall was caused in part by the fact that the scaffold was not properly secured and was not equipped with guardrails (see Boyd v Schiavone Constr. Co., Inc., 106 AD3d 546, 548 [1st Dept 2013]). There is no evidence that plaintiff disregarded an instruction to use any particular safety device (see generally Hill v Acies Group, LLC, 122 AD3d 428 [1st Dept 2014]).

Turning to the question of which entities (other than Bar Construction and the Hermitage board) are properly named as defendants upon plaintiff's Labor Law causes of action, we hold that Supreme Court erred in denying defendants' motion insofar as it sought summary judgment dismissing plaintiff's claims under Labor Law §§ 240 (1) and 241 (6) as against defendant 41 West 72 LLC and plaintiff's claims under Labor Law §§ 200, 240 (1) and 241 (6) as against defendant Property Markets Group, Inc. As to Property Markets, the record contains no evidence that this entity ever owned or controlled the premises where the accident occurred. The basis for dismissing the claim as against 41 West 72 LLC requires a more extended discussion.

[1] As previously noted, plaintiff was injured in February 2009 in the boiler room of the residential apartment building located at 41 West 72nd Street in Manhattan. While defendant 41 West 72 LLC acquired the building in question by a deed recorded in January 2001, several months later, in August 2001, 41 West 72 LLC made the building subject to the Condominium [*3]Act (Real Property Law art 9-B) by executing and filing a declaration of condominium pursuant to Real Property Law § 339-f.^[FN1] The declaration defines the common elements of the condominium (Real Property Law § 339-e [3]) to include {**143 AD3d at 47}the building's boiler room. As a common element of the condominium, the boiler room was, at the time of plaintiff's accident, owned collectively by all of the owners of the building's 130 units.^[FN2] However, the conversion of [*4]the building to a condominium placed its common elements "solely under the control of the [condominium's] board of managers" pursuant to the Condominium Act, which "recogni[zes] that the board exercises exclusive control over the common elements" (Pekelnaya v Allyn, 25 AD3d 111, 120 [1st Dept 2005]; see also Real Property Law § 339-v [1] [a] [requiring that the bylaws of a condominium establish a board of managers]).^[FN3]

{**143 AD3d at 48}In keeping with the vesting of exclusive control of a condominium's common elements in the board of managers, it is well established that a claim arising from the condition or operation of the common elements does not lie against the owners of the individual units; the proper defendant on such a claim is the board of managers (see Pekelnaya, 25 AD3d at 113; see also O'Toole v Vollmer, 130 AD3d 597, 598 [2d Dept 2015]; Rothstein v 400 E. 54th St. Co., 51 AD3d 431, 431-432 [1st Dept 2008]). Further, this Court has held that a statute imposing obligations or liabilities upon the "owner" of real property does not give rise to a claim against the owners of individual condominium units where the claim arises from the common elements or concerns a duty not connected with any individual unit (see Pekelnaya, 25 AD3d at 118-119 [rejecting a claim against unit owners under Multiple Dwelling Law § 78, which makes "the owner" of a multiple dwelling responsible for keeping the building "in good repair"]; Araujo v Mercer Sq. Owners Corp., 95 AD3d 624 [1st Dept 2012] [rejecting a claim against the owner of an individual condominium unit for violating Administrative Code of City of NY § 7-210, which imposes obligations on "the owner of real property abutting any sidewalk"]; see also Fayolle v [*5]East W. Manhattan Portfolio L.P., 108 AD3d 476 [1st Dept 2013], appeal dismissed 22 NY3d 979 [2013], lv dismissed in part, denied in part 24 NY3d 1079 [2014] [following Araujo]).^[FN4]

In this action, plaintiff has named the condominium's board of managers, the aforementioned Hermitage board, as a defendant.{**143 AD3d at 49} It is the Hermitage board, not 41 West 72 LLC, that entered into the contract for the lobby renovation project in the course of which plaintiff was injured. The Hermitage board has appeared in this action and is actively defending itself in the matter, including by taking part in the instant appeal, and has admitted that it is properly sued as the owner of the building's common elements. Plaintiff makes no claim that the Hermitage board was not actually functioning at the time of the accident or that it lacks the resources to satisfy a judgment in his favor. In fact, as earlier noted, plaintiff, through his counsel at oral argument, has stated that he does not oppose dismissing 41 West 72 LLC from the action so long as he is granted summary judgment against the Hermitage board. Under these circumstances, we see no reason not to grant 41 West 72 LLC summary judgment dismissing the claims under Labor Law §§ 240 (1) and 241 (6) as against it. At the same time, because the record establishes that the Hermitage board is the proper party to be sued as owner of the building's common elements and, as previously discussed, plaintiff has otherwise established his right to judgment on the claim under section 240 (1) as a matter of law, we further modify the order appealed from, upon a search of the record, to grant plaintiff summary judgment as to liability on his claim under section 240 (1) as against the Hermitage board.

[2] While the record does not reflect the extent to which 41 West 72 LLC has retained ownership of units in the building since its conversion to a condominium, we do not believe that 41 West 72 LLC's continued ownership of certain units at the time of the accident would affect its entitlement to dismissal from this action. It is true that each unit owner—including the sponsor of the condominium conversion (here, 41 West 72 LLC) to the extent it retains ownership of unsold units—owns an undivided fractional interest in the real property comprising the condominium's common elements. As previously discussed, however, our precedents make clear that a unit owner's ownership interest in the condominium's common elements does not give rise to liability, whether for common-law negligence or under the Labor Law, because the condominium declaration transfers complete and exclusive control of the common elements to the board of managers. In essence, the unit owners, though they collectively own the common elements, are divested of the powers and responsibilities of ownership with respect to those elements. Those powers and responsibilities{**143 AD3d at 50} are vested in the board of managers, which becomes the proper defendant on any claim, whether common-law or statutory, that lies against the owner of the common elements.

Indeed, if the sponsor of condominium conversion could be sued on a post-conversion [*6]cause of action arising from the common elements based on the sponsor's continued ownership of unsold units, it would follow that each individual unit owner could be sued on exactly the same ground. This is because, as provided in Real Property Law § 339-e (5) (quoted in pertinent part at n 2 above), each unit owner is the fee owner of a fractional undivided interest in the common elements as part of that owner's common interest appurtenant to the individual unit. As explained in the leading treatise on New York condominium law:

"A condominium property regime involves the division of a real property parcel into 'units' and 'common elements.' The units are then individually sold to separate owners, and such owners also obtain an undivided interest in the common elements of the parcel. Thus, the condominium regime consists of (a) individual fee ownership of 'units,' and (b) common ownership of 'common elements' by unit owners . . . . A condominium regime involves a mingling of two distinct forms of real property interest: individual ownership and undivided joint ownership. The distinction with traditional joint ownership structures is that the entire parcel is not owned in common. Rather, only the 'common elements' are owned in common with other unit owners" (Vincent Di Lorenzo, New York Condominium and Cooperative Law § 1:1 at 2-3 [2d ed 1995]; see also id. at 4 ["The unit owners obtain an undivided interest, or 'common interest', in the common elements"]).

Nor would a result different than the one we reach here be proper in the event that the sponsor, at the time the claim arose, continued to own a sufficient number of units to enable it to control the condominium's board of managers. If the sponsor could be sued based on its ability to select a majority of the members of the board of managers, it would follow that, even where that is not the case, a plaintiff could sue all of the individual unit owners on the ground that the owners collectively control the board of managers. We held directly to the{**143 AD3d at 51} contrary in Pekelnaya, in which we rejected an attempt to impose liability on "the individual owners of the 11 units comprising the . . . [c]ondominium" (25 AD3d at 113). Given that there is no contention that the condominium in this case did not have a functioning and adequately capitalized board of managers at the time of plaintiff's accident, we see no warrant for departing from our holding in Pekelnaya to allow plaintiff to sue any owner of an individual unit, or units, on a claim arising from an area that was under the exclusive control of the board of managers.^[FN5]

Our dissenting colleague devotes much of her writing to demonstrating a point with which we do not disagree, namely, that each owner of an individual condominium unit is an "owner" of the condominium's common elements. Based on this undisputed premise, the dissent argues that 41 West 72 LLC, the sponsor of this building's condominium conversion, should be [*7]subject to personal liability under Labor Law § 240 (1) for an accident that occurred within the building's common elements because 41 West 72 LLC does not deny that, at the time of the accident, it continued to own a number of units in the building.^[FN6] The problem with this reasoning is that, as the dissent admits, it leads to the conclusion that, where an accident occurs within the common elements of a condominium, each and every owner of a unit in the building may be personally sued on a statutory cause of action that lies against "the owner" of real property.^[FN7] We think that such a result would be sharply at odds with the expectations of buyers of condominium units, who are led to believe that risks and liabilities arising from the{**143 AD3d at 52} common elements will be handled on their behalf by the board of managers, a body that, as noted by the dissent, is funded entirely by common charges and assessments paid by the unit owners.

Our dissenting colleague's valid point that, even if only the board of managers is sued on a claim, the unit owners will still "bear financial responsibility" for that claim, demonstrates the lack of basis for her concern that our holding "will disincentivize the board of managers from obtaining sufficient liability insurance to protect the unit owners' interests." Surely, unit owners in a condominium can be expected to demand that the board of managers act prudently to protect the board's owner-funded bank accounts from judgment creditors, regardless of whether the owners' respective units, personal bank accounts, insurance policies and other assets can be reached.^[FN8] Finally, as to the dissent's objection that we are "carv[ing] out a common-law exception that does not exist in the statutory scheme," as previously discussed, existing case law already establishes that an individual unit owner is not a proper defendant on a claim arising from the common elements of a condominium. The dissent offers no compelling reason for departing from these precedents, the holdings of which we believe to be consistent with the understanding and expectations of those who buy condominium units in New York. We therefore adhere to these precedents and hold that 41 West 72 LLC's ownership of certain [*8]individual condominium units in the building at the time of the subject accident in the common elements does not render 41 West 72 LLC a proper defendant in this action.

Finally, we have considered defendants' remaining contentions and find them unavailing.

Accordingly, the order of the Supreme Court, New York County (Paul Wooten, J.), entered April 16, 2014, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for summary judgment on the issue of liability under{**143 AD3d at 53} Labor Law § 240 (1) as against defendant Bar Construction Corp., and denied defendants' motion for summary judgment dismissing the Labor Law §§ 240 (1) and 241 (6) claims as against defendant 41 West 72 LLC and the Labor Law §§ 200, 240 (1) and 241 (6) claims as against Property Markets, should be modified, on the law, to grant defendants' motion for summary judgment as to the aforesaid claims against defendants 41 West 72 LLC and Property Markets, and, upon a search of the record, to grant plaintiff summary judgment as to liability on his Labor Law § 240 (1) claim as against defendant the Hermitage board, and otherwise affirmed, without costs.

Dissenting opinion by Gische, J.

Gische, J. (dissenting in part). I write in partial dissent because I disagree with the majority's grant of summary judgment to 41 West 72 LLC, dismissing the claims against it.

Plaintiff's claims are grounded in the Labor Law, for an accident occurring in the boiler room of a building owned as a condominium. It is undisputed that the boiler room is a common element of the condominium. Labor Law § 240 (1) sets out a nondelegable duty on contractors, owners of real property and their agents to furnish ladders and other safety devices to employees so they may safely perform their work. Labor Law § 241 (6) also imposes a nondelegable duty requiring that all contractors and owners and their agents comply with certain safety requirements in connection with construction, excavation and demolition work. 41 West 72 LLC, the sponsor of the condominium, is one of several named defendants in this action. It is alleged to be the owner of the real property in which plaintiff's underlying accident occurred.

41 West 72 LLC does not deny that the deed to the real property, a residential building located at 41 West 72nd Street, is titled in its name. Certainly, it is a bedrock principle of law that ownership of real property is proven by title conveyed pursuant to a valid deed (see e.g. 4 Warren's Weed, New York Real Property ch 37 [Deeds] [5th ed 2004]; Jackson v Schoonmaker, 2 Johns 230 [1807]; see also Wood v Chapin, 13 NY 509 [1856]). Under the Labor Law, title ordinarily suffices as a basis for statutory liability (see Guryev v Tomchinsky, 20 NY3d 194 [2012]).

41 West 72 LLC nonetheless claims, however, that it is not an "owner" on the sole argument that the deed was "superceded" by the filing of a Declaration Establishing a Plan for Condominium Ownership dated August 9, 2001 (Declaration). This argument is legally incorrect because, although a declaration{**143 AD3d at 54} of condominium must be filed in accordance with the Condominium Act (Real Property Law art 9-B), such filing does not constitute a conveyance of real property and does not in any way "supercede" a deed. A declaration does not convey ownership of the common elements to a condominium board of managers; it only subjects the property to the jurisdiction of the Condominium Act (Real Property Law § 339-d et seq.). Consistent with the Condominium Act, the Declaration in this case expressly provides that title to the property remains with 41 West 72 LLC both before and after the filing of the Declaration. Declaration article 3 states that 41 West 72 LLC is the owner in fee of the real property. Significantly, article 6.3 expressly provides that upon the filing of the Declaration, 41 West 72 LLC shall continue to be the fee [*9]owner of the property. It states that as of the filing of the Declaration "fee simple absolute title shall automatically vest in Declarant [41 West 72 LLC] in all Units, individually and collectively." Consequently, 41 West 72 LLC, as movant, simply failed to satisfy its prima facie burden of establishing that it is not an owner and its motion for summary judgment was correctly denied (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986]).^[FN1]

A fundamental principle of condominium ownership is that the units and an undivided interest in the common elements are real property, that is individually owned (Real Property Law § 339-g ["Each unit, together with its common interest, shall for all purposes constitute real property"]). At its inception, the sponsor holds title to the entire fee, which is then deeded out in parcels, directly from the sponsor to the individual unit owners. The deeds issued are not only for the individual units purchased, but also represent the common ownership interest appurtenant to each unit (Real Property Law §§ 339-g, 339-i, 339-o). Consequently, each unit owner holds a real property interest in its unit along with an undivided interest in the common elements of the condominium{**143 AD3d at 55} (Caprer v Nussbaum, 36 AD3d 176, 183 [2d Dept 2006]; see also Frisch v Bellmarc Mgt., 190 AD2d 383, 387 [1st Dept 1993]). Unless and until a sponsor sells 100% of the units, it continues to hold the unsold units and the appurtenant interest in the common elements as well.

The unit owners in a condominium, including a sponsor who continues to hold title to any unsold units, have a mutual interest in the common profits and expenses of the condominium, which are distributed among and charged to each owner, according to their relative common interests (Real Property Law § 339-m; Caprer v Nussbaum). In order to ensure the orderly administration of the collective ownership of the common elements, the Condominium Act has governance requirements that must legally be adhered to by every condominium. By law, every condominium must have a board of managers (Real Property Law § 339-v). A board of managers, however, does not take title to individual units.^[FN2] No separate deed for just the common elements is issued and the condominium board of managers is never a titled owner of those common elements. In fact, the Condominium Act expressly prohibits separating common elements from the unit to which it appertains (Real Property Law § 339-i [2]).

The board of managers does have responsibility to manage the common elements. But that responsibility is not the same as titled ownership. The relationship of the board of managers to [*10]the condominium is that it serves as a fiduciary, answerable to the unit owners (Board of Mgrs. of Fairways at N. Hills Condominium v Fairway at N. Hills, 193 AD2d 322 [2d Dept 1993]). Given this relationship, established by the Condominium Act itself, some of the concerns raised by the majority (albeit not argued by the parties) are easily addressed.

The condominium board of managers, which exercised control over the common elements where the accident occurred, is a party that can be separately sued under the Labor Law. The Labor Law clearly provides that agents of the owner, as well as the owners themselves, are proper defendants (Walls v Turner Constr. Co., 4 NY3d 861, 864 [2005]). There is nothing in the Labor Law or in case law that restricts a plaintiff to suing only one defendant. Although a plaintiff may sue the agent of the{**143 AD3d at 56} owner, this does not prohibit a lawsuit against the owner as well (see e.g. Miranda v NYC Partnership Hous. Dev. Fund Co., Inc., 122 AD3d 445, 446 [1st Dept 2014] [plaintiff granted summary judgment against owners and other defendants because they did not provide him with adequate safety device]; Markey v C.F.M.M. Owners Corp., 51 AD3d 734, 737 [2d Dept 2008] [both owner and general contractor were liable for any Labor Law violation because contractor fulfilled the role of "owner" by contracting to have work performed]; Draiss v Salk Constr. Corp., 201 AD2d 698, 699 [2d Dept 1994] [general contractor and titled owner both held liable for the plaintiff's injuries because neither defendant provided safety equipment]).

To the extent that the majority expresses concern over the potential for individual unit owner liability, two important points need to be made. The easiest point is that in this case the concern is nonexistent because the individual unit owners were not sued. To the extent the majority is generally concerned that in future cases the unit owners may have to bear financial responsibility for accidents occurring in the common elements, I only point out that unit owners will bear financial responsibility whether sued directly or through their fiduciary, the board of managers. A condominium board of managers has no independent economic viability. It does not own the real property or the common elements it manages. It does not exist as a separate economic entity that operates to financially profit itself. Financially, it is solely reliant on common charges and assessments paid by the individual unit owners in order to meet any of its financial obligations. The majority seeks to carve out a common-law exception that does not exist in the statutory scheme.^[FN3]

Finally, I disagree with the majority's reliance on Pekelnaya v Allyn (25 AD3d 111 [1st Dept 2005]) for the broad proposition{**143 AD3d at 57} that only the board of managers may be sued for injuries occurring on the common elements of a condominium. Pekelnaya involved an issue of ordinary negligence. As this Court specifically held in that case, "In the absence of any statutory basis for recovery, control rather than the unit owners' common interest is the operative criterion upon which liability is predicated" (id. at 113). At bar, however, the Labor Law provides a statutory basis for strict liability against the owner and possibly others.^[FN4] There is no basis to disregard our jurisprudence on who is an owner in this case just because the party sued is the sponsor.

Andrias, Saxe and Kapnick, JJ., concur with Friedman, J.P.; Gische, J., dissents in a separate opinion.

Order, Supreme Court, New York County, entered April 16, 2014, modified, on the law, to grant defendants' motion for summary judgment as to the aforesaid claims against defendants 41 West 72 LLC and Property Markets, and, upon a search of the record, to grant plaintiff summary judgment as to liability on his Labor Law § 240 (1) claim as against defendant the Hermitage board, and otherwise affirmed, without costs.