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Gamechanging Settlement Creates New Case Law while Winning Attorney Fees and Allowing Client to Make Building Repairs

By Massimo F. D'Angelo


Our client, a Board of Managers of an Upper West Side condominium, came to Adam Leitman Bailey, P.C. for help with the damages caused by building defects in their newly built condominium.

Adam Leitman Bailey, P.C. commenced a Supreme Court litigation against the Sponsor Developer entities and the individual principals of the entities to recover damages for the building defects, which resulted from the grossly negligent construction by the Sponsor Developer entities. The biggest issue was a leaky roof that caused water to infiltrate the building.

In discovery, Adam Leitman Bailey, P.C. found that the roofing subcontractor was not licensed or properly insured, which was a big key to getting a favorable settlement for the client. ALBPC also made new case law in this matter by successfully arguing that the individual principals of the sponsor bear personal liability by virtue of their certifying in the Offering Plan that the condominium was built in conformance with the plans. Prior to this case, the First Department (New York County), in these cases, had held that the principals do not bear personal liability simply by signing the Offering Plan, under the theory that the corporate entity acts as a shield to protect individual owners from personal liability. With this game changer, ALBPC was able to obtain a substantial settlement offer from the Defendants.

ALBPC then discovered e-mails between the client’s board president and the Sponsors’ contractors showing that we timely put the Sponsor on notice of the defects within the applicable statute of limitations period. Using this information, the firm was also successful in defending against the Sponsors’ motion to dismiss, having successfully argued that the Sponsor was on notice of the defective condition. Ultimately, we were able to bring in all of the culpable parties as Defendants to the case, which further increased the settlement pot.

During the court ordered settlement conference, ALBPC provided a comprehensive positional statement demonstrating to the court all of the expert reports that our office had commissioned, detailing the damages and the estimated costs of repair. The court agreed with all of our arguments and forced the defendants to raise their offer. In the end, we worked out a settlement that provided the client with funds to cover all of its attorney fees – which are generally not even covered in these cases – and more importantly, the necessary funds to allow the client to complete the repairs and give them the building they should have gotten when they purchased.

Massimo F. D’Angelo of the Adam Leitman Bailey, P.C.’s litigation group represented the Condo Board of Managers in this case.

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS