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The Board of Managers of 266 West 115th Street Condo. v. 266 West 115th Street, LLC

December 26, 2014

Board of Managers sued defendant sponsor and the CPC defendants alleging they were sponsor’s alter egos. Defendants moved to dismiss the complaint arguing plaintiffs failed to give them timely written notice of the defects, as required by the offering plan. The complaint pleaded 10 causes of action, including breach of contract, based on sponsor’s allegedly defective construction of the building. The board did not dispute it did not give defendants written notice, but claimed same was waived by sponsor by its repeated repairs of defects at the premises over the years. The court found the board raised a triable issue of fact if, and to what extent, sponsor waived the written notice requirements, denying dismissal of the breach of contract claim. Also, it stated while it appeared plaintiff merely pleaded an organization structure and conclusorily asserted sponsor was a “mere instrumentality and alter ego” of the CPC defendants, the record also contained evidence the offering plan was certified by sponsor and its principals who may be held separately liable where they executed certification to the offering plan and knowingly and/or intentionally advanced the alleged misrepresentations of the offering plan. The court ruled, at this juncture, the alter ego claim was maintainable.

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