Court Opinion

ID: 9930714
Source: CourtListenerOpinion
Date Created: 2024-02-07 16:11:30.48744+00
Date Added: 2024-06-11T11:25:54.561146
License: Public Domain

Soloway v CIM Group
               2024 NY Slip Op 30377(U)
                     February 2, 2024
           Supreme Court, New York County
        Docket Number: Index No. 651820/2023
                  Judge: Andrew Borrok
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                         INDEX NO. 651820/2023
  NYSCEF DOC. NO. 46                                                                                               RECEIVED NYSCEF: 02/02/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. ANDREW BORROK                                                  PART                              53
                                                                                       Justice
            ----------------------------------------------------------------- ----------------X      INDEX NO.          651820/2023
             STEPHEN SOLOWAY,
                                                                                                                        05/16/2023,
                                                         Plaintiff,                                  MOTION DATE        06/15/2023

                                                 - V -
                                                                                                     MOTION SEQ. NO. _ _0_0_1_0_0_2__

             THE CIM GROUP, 246 SPRING STREET (NY) MANAGER,
             LLC                                                                                       DECISION + ORDER ON
                                                                                                             MOTION
                                                         Defendant.
            ------------------------------------------------------------------- --------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10,
            11, 12, 13,25,26,27,28,29,30,31,32,33,34,35,37,39,41,42,44
            were read on this motion to/for                                                            DISMISS

            The following e-filed documents, listed by NYSCEF document number (Motion 002) 14, 15, 16, 17, 18,
            19,20,21,22,23,24, 36,40,43
            were read on this motion to/for                                                       COMPEL ARBITRATION

            Upon the foregoing documents, the motions are decided as set forth below.

            The Plaintiff Stephen Soloway, MD, a New Jersey resident, is the owner of three hotel studio

            units at "The Dominick," a condominium building at 246 Spring Street in Manhattan (Premises)

            (verified complaint ,i 1 [NYSCEF Doc No. 1]). The Plaintiff alleges that, beginning in or about

            November 2017, Defendants The CIM Group (CIM) and 246 Spring Street (NY) Manager, LLC

            (246 Spring) "took over and assumed management, operation and control of the property, hotel,

            and its owner rental program ... under certain written agreements [Defendants entered] with the

            Trump Organization and/or 'Trump Soho"' (id. ,i 2).

             651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL                                                        Page 1 of 6
             Motion No. 001 002

                                                                            1 of 6
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                                                                                                     INDEX NO. 651820/2023
  NYSCEF DOC. NO. 46                                                                         RECEIVED NYSCEF: 02/02/2024

            The Plaintiff asserts three causes of action. The first is for the Defendants' alleged breach of

            their duties as agents and fiduciaries of the Plaintiff (id. ,i 24 et seq.). The second is for breach of

            implied contract, quasi contract, and the implied covenant of good faith and fair dealing (id. ,i 34

            et seq.). The third cause of action seeks an equitable accounting (id. ,i 40 et seq.).

            The Defendants first move (Mtn. Seq. No. 1) to dismiss the complaint pursuant to CPLR

            321 l(a)(8) and 3013 with respect to CIM for lack of jurisdiction because The CIM Group

            allegedly does not exist and so could not have been served. The Plaintiff opposes and submits a

            cross motion for an order permitting the caption to be amended under CPLR 3025. In support,

            the Plaintiff submits copies of a summons and complaint and other litigation documents in a

            2019 action filed in New York County Supreme Court captioned Lang v Trump International

            Hotels Management, LLC (Index No. 157943/2019) relating to the Premises in which CIM was

            named as defendant "CIM Group, LP," and notes that the Defendant answered in that name and

            did not plead that the name was incorrect (see NYSCEF Doc No 37 and exhibit 5 thereto

            [NYSCEF Doc No. 30]). Thus, any inadvertent technical error does not warrant dismissal and

            the Plaintiff's cross motion for amendment of the caption to cure this misnaming of the

            Defendant is granted under CPLR 3025( c).

            The Defendants also seek dismissal with respect to CIM under CPLR 3013, based on Plaintiff's

            alleged failure to identify the roles of 246 Spring and CIM and to differentiate their conduct. In

            his verified complaint, Plaintiff alleges that, despite his demands, he has not been made privy to

            whatever agreements govern operation of the Premises after the Trump International Hotels

            Management LLC (TIHM) was replaced as hotel manager in 2017. CPLR 3211 (d) provides that

             651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL                                    Page 2 of 6
             Motion No. 001 002

                                                            2 of 6
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                                                                                                   INDEX NO. 651820/2023
  NYSCEF DOC. NO. 46                                                                       RECEIVED NYSCEF: 02/02/2024

            a motion to dismiss can be denied where plaintiff submits affidavits showing that facts essential

            to justify opposition may exist but cannot then be stated. Plaintiff made such averments in his

            verified pleading (see NYSCEF Doc No. 1, ,iip-4, 9, 12, 41), and so this facet of Defendants'

            motion must also be denied. 1

            The Defendants also move (Mtn. Seq. No. 2) to compel arbitration or, in the alternative, to

            dismiss the verified complaint as to 246 Spring. First, the Defendants argue that Plaintiff is

            bound by the arbitration clause in its Rental Agreements with TIHM (NYSCEF Doc Nos. 20, 21,

            and 22) and so arbitration should be compelled, pursuant to CPLR 7503(a) and this action

            stayed, pursuant to CPLR 2201. However, "[u]nder New York law, the right to compel

            arbitration does not extend to a party that has not signed the agreement pursuant to which

            arbitration is sought unless the right of the nonsignatory is expressly provided for in the

            agreement" (Greater New York Mut. Ins. Co. v Rankin, 298 AD2d 263,263 [1st Dept 2002]).

            The Agreements' signatories are Plaintiff, as Owner, and TIHM, as Hotel Manager. 246 Spring

            cannot compel arbitration as it is not a signatory to the Rental Management Agreements, and

            Defendants failed to identify any provision that would expressly extend such right to 246 Spring.

            In fact, the agreement provides that only the management agreement, not the rental agreement, is

            assignable.

            The Defendants next argue Plaintiffs second cause for breach of implied contract, quasi contract

            and implied covenant of good faith and fair dealing should be dismissed as duplicative of his

            1
              Defendants reiterate this argument in motion sequence 002, seeking dismissal of Plaintiffs
            claims against 246 Spring in motion sequence 002, which also fails.
                651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL                               Page 3 of 6
                Motion No. 001 002

                                                             3 of 6
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                                                                                                     INDEX NO. 651820/2023
  NYSCEF DOC. NO. 46                                                                         RECEIVED NYSCEF: 02/02/2024

            breach of fiduciary duty claim. In the opposition papers, the Plaintiff argues it should survive

            because he has properly alleged the lack of a written agreement between him and 246 Spring.

            Pleading in the alternative between breach of contract versus implied contract is permitted ( CIP

            GP 2018, LLC v Koplewicz, 194 AD3d 639, 640 [1st Dept 2021] "where there is a bona fide

            dispute as to the existence of a contract or the application of a contract in the dispute in issue, a

            plaintiff may proceed upon a theory of quasi contract as well as breach of contract, and will not

            be required to elect his or her remedies"). Allowing these claims to go forward is appropriate at

            this stage of the litigation. The Plaintiff has yet to have the opportunity to demonstrate, via

            evidence found in discovery, the nature of the parties' business relationship and the obligations

            (if any) to which such relationship gives rise. Accordingly, Defendant's motion to dismiss

            Plaintiffs second cause of action is denied.

            Defendants also argue that dismissal of Plaintiffs claims for breach of fiduciary duty and an

            accounting is warranted because Plaintiff failed to plead those claims in a manner that meets the

            heightened particularity standard set forth in CPLR 3016(b ). This is not so. Plaintiff takes pains

            to set forth specific examples of defendants' alleged failure to provide copies of current

            governing documents and records relating to the rental program, costs and expenses, revenue

            share and other issues affecting the owners of condominium units (verified complaint, ,i 3).

            Plaintiff also sets forth specific examples of Defendants allegedly failing to follow instructions

            regarding acceptable rental rates for his units and continuing to reduce his "revenue

            share/income" by repeatedly offering his units for free, or subject to "bulk rate" and special rate

            discounts (verified complaint, ,i 15).

             651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL                                    Page 4 of 6
             Motion No. 001 002

                                                           4 of 6
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                                                                                                  INDEX NO. 651820/2023
  NYSCEF DOC. NO. 46                                                                      RECEIVED NYSCEF: 02/02/2024

            Finally, Defendants argue that Plaintiff's claims for breach of fiduciary duty and an accounting

            fail by virtue of the three-year limitations period afforded to by CPLR 214(4). To extent

            Plaintiff can show that Defendants breached their continuing duties to protect his interest in his

            units and to generate fair rental returns, however, these failures may "constitute[] a continuing

            wrong that is not referable exclusively to the day the original wrong was committed'"

            (Kaymakcian v Board ofManagers of Charles House Condominium, 49 AD3d 407,407 [1st

            Dept 2008], quoting 1050 Tenants Corp. v Lapidus, 282 145, 146 [1st Dept 2001]). To the

            extent Plaintiff is seeking money damages, as opposed to equitable relief, "the claim is limited to

            any alleged damages that occurred within three years of the commencement of the instant action"

            (id. 49 AD3d 407-08 [citation omitted]).

            The Court has considered the parties' remaining arguments and finds them unavailing.

            For the foregoing reasons, it is hereby

            ORDERED that defendants' motion to dismiss the verified complaint as to defendant The CIM

            Group is denied; and it is further

            ORDERED that plaintiff's cross motion to amend the caption in this action is granted, pursuant

            to CPLR 3025( c), as follows:

            SUPREME COURT OF THE STATE OF NEW YORK
            COUNTY OF NEW YORK
            ---------------------------------------------------------x
            STEPHEN SOLOWAY,

                             Plaintiff,

             651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL                                 Page 5 of 6
             Motion No. 001 002

                                                                 5 of 6
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                                                                                                    INDEX NO. 651820/2023
  NYSCEF DOC. NO. 46                                                                          RECEIVED NYSCEF: 02/02/2024

                      -against-

            CIM GROUP, LLC and 246 SPRING
            STREET (NY) MANAGER, LLC,

                               Defendants.
            ---------------------------------------------------------x
            and it is further

            ORDERED that a copy of this order shall be served on the Clerk of the Court and the Clerk of

            the General Clerk's Office through the e-filing system so that the Court's records may be

            updated; and it is further

            ORDERED that Defendants' motion to compel arbitration and stay the litigation or, in the

            alternative, to dismiss the verified complaint as to 246 Spring Street (NY) Manager, LLC is

            denied.

                      2/2/2024
                        DATE                                                     ANDREW BORROK, J.S.C.

                                        ~
             CHECK ONE:                      CASE DISPOSED                NON-FINAL DISPOSITION

                                             GRANTED           □ DENIED   GRANTED IN PART          □ OTHER
             APPLICATION:                    SETTLE ORDER                 SUBMIT ORDER

             CHECK IF APPROPRIATE:           INCLUDES TRANSFER/REASSIGN   FIDUCIARY APPOINTMENT    □ REFERENCE

             651820/2023 SOLOWAY, STEPHEN vs. THE CIM GROUP ET AL                                   Page 6 of 6
             Motion No. 001 002

                                                                 6 of 6
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