DECISION & ORDERAFTER NON-JURY TRIAL Plaintiff/cooperative shareholder Bridget de Socio commenced this action in Supreme Court1 against Defendant/cooperative 136 East 56th Street Owners, Inc. (the “Corporation”) and its Board of Directors (the “Board”) for mold and water damage to Plaintiff’s apartment, Unit PHD of 136 East 56th Street, New York, New York (the “Apartment”). Specifically, Plaintiff asserted eight causes of action: (1) injunctive and declaratory relief directing Defendants to make the Apartment habitable; (2) breach of warranty of habitability; (3) breach of quiet enjoyment; (4) actual and/or constructive eviction; (5) diminution of value of Plaintiff’s shares in the cooperative; (6) disparate treatment of Plaintiff in relation to other cooperative shareholders; (7) negligence; and (8) attorneys’ fees and costs. In sum and substance, Plaintiff sought a full abatement from August 2007, when she stopped paying maintenance fees, to the present, as well as additional damages. The Cooperative counterclaimed for: (1) a permanent injunction enjoining Plaintiff from denying access to the Apartment; (2) unpaid maintenance, assessment, and utilities; and (3) attorneys’ fees.2On September 17, 2013, the Honorable Lynn R. Kotler issued a decision and order dismissing all of Plaintiff’s claims except the second, third, and fifth causes of action against the Cooperative for breach of warranty of habitability, breach of quiet enjoyment, and diminution of value, the seventh cause of action for negligence against the Board, and the eighth cause of action for fees and costs against both Defendants. Judge Kotler also dismissed Defendants’ first claim for injunctive relief, finding that Civil Court lacked the appropriate jurisdiction.This Court conducted a trial between April 18 and May 18, 2018,3 during which the following witnesses testified: Plaintiff for her own case, and for Defendants Board President Gregory Angrist, Managing Agent Douglas Elliman’s representative/agent James Flaherty, resident manager/superintendent Martin Dowd, and former defense counsel Ingrid Manevitz. During trial, on May 8, 2018, this Court dismissed Plaintiff’s claims for negligence and attorneys’ fees against the Board, thereby dismissing all remaining claims against the Board. Accordingly, the only causes of action which remained after trial, and which are addressed here, were Plaintiff’s claims against the Cooperative for breach of warranty of habitability, breach of quiet enjoyment, diminution of value, and attorneys’ fees, and the Corporation’s claims for unpaid maintenance and attorneys’ fees.Having had the opportunity to observe the witnesses and consider the credible testimony and evidence at trial, as well as the parties’ written post-trial summations, the Court: (1) dismisses Plaintiff’s third and fifth causes of action against the Cooperative for breach of quiet enjoyment and diminution of value; (2) finds in favor of Plaintiff in part on Plaintiff’s second cause of action for breach of warranty of habitability and the Corporation in part on its second counterclaim for maintenance fees, which together comprise the bulk of the claims and testimony at trial; and (3) dismisses Plaintiff’s eighth cause of action and the Corporation’s third counterclaim for attorneys’ fees.FINDINGS OF FACT AFTER TRIAL4Plaintiff owns 1,550 shares of stock in the Corporation, which owns the subject building located at 136 East 56th Street (the “Building”; Defs Exhs 15-18; 5/18 1656-1665). Pursuant to a proprietary lease executed in 1999 and amended in April 2010 (Defs Exhs 4, 12 [the "Lease" and "Amended Lease,"], 5/18 1664:5-18),5 Plaintiff leased the Apartment, a one-bedroom unit with a terrace.The Lease and Amended Lease required the Corporation to maintain the Building and associated “equipment and apparatus,” other than what was Plaintiff’s responsibility within the interior of the Apartment: as relevant here, “interior walls, floors and ceilings,… plumbing, gas and heating fixtures and equipment… [including] exposed gas, steam and water pipes attached to fixtures, appliances and equipment and the fixtures, appliances and equipment to which they are attached, and any special pipes or equipment which the Lessee may install within the wall or ceiling, or under the floor, but [not including] gas, steam, water or other pipes or conduits within the walls, ceilings or floors or air conditioning or heating equipment which is part of the standard building equipment” (Lease/Amended Lease 18[a]). In short, as Dowd explained: “The building is responsible for anything inside the walls. Basically the shareholder, if you can see it, you own it” (5/17 1608:1-8).Plaintiff was responsible for monthly maintenance charges and a pro rata share of any assessments or special maintenance charges levied by the Corporation, “without any deduction on account of any set-off or claim which the Lessee may have against the Lessor” (Lease/Amended Lease
1[a], 12). The Lease authorized a penalty for late payments: interest… at the maximum legal rate….” The Amended Lease authorized the Corporation to impose a late charge if Plaintiff fails to pay her maintenance when due, and to charge interest at a rate of 1.5 percent per month or the maximum rate allowed by law, whichever is lower (Lease/Amended Lease 12).Water began infiltrating the Apartment in late 2005 and continued until approximately 2016, from various sources (Ct Exh 4A 6, 4/20 31:2-18, 5/7 954:19, et seq.).6 Plaintiff complained promptly about the leaks, though the parties disagreed as to which party bore responsibility for repairs.Plaintiff vacated the Apartment in 2006, spending 2006 through 2007 mostly in Shanghai, China partly for work as a brand director and partly “because — what was happening in my apartment, I thought maybe this is a good opportunity to get out of the way of the problem, report it and let them take care of it” (Ct Exh 4A 21[b][1], 4/20 32:21-23, 38:1-3).7 Upon Plaintiff’s return from China in 2008, she resided either with her mother in Watertown, Connecticut or apartment PHC, next to the subject Apartment (5/7 906:5-8, 907:9-16, 950:2-4, 951:12-22)8. In 2014, Plaintiff lived in Stratford, Connecticut (5/7 991:18-20). In 2015, Plaintiff lived at a different Stratford address (5/7 974:2-14, 991:14-17). Even during her time not residing full-time in the Apartment, and particularly during her time in PHC, Plaintiff monitored the Apartment’s condition, appliances, and fixtures (5/7 950:2-4, 951:12-22, 990:18-991:14, 992:25-993:19).Though Plaintiff did not personally witness every instance of infiltration, she deduced their origins, in part, from the observable aftermath: for example, rust in the ceiling fixtures, water-damaged books and lights, stains, swollen walls and floors, and mold (4/20 36:20-37:6, 74:9-15, 5/7 958:20-962:18, 969:17-24). From these observations, she determined — credibly — that the water originated from several locations outside of the Apartment: the ceiling, the terrace, and the HVAC system (4/20 36:14-37:6, 74:6-76:8, Pl Exhs 5, 5A).9 The water damaged the Apartment’s wood floors, appliances, furniture, and many of Plaintiff’s personal items (4/20 40, et seq.; see e.g. Pl Exh 30).Work on repairing the HVAC unit, performed by the dismissed Third-Party Defendants, began in the fall of 2007 and spanned to 2009 (4/20 80:14, 81:1-12, 87:13-15, 31:3-132:20). Though the leaks lessened in frequency, the HVAC repairs did not resolve them all. For example, an HVAC leak occurred in 2016 (5/7 969:25-970:8, 5/16 1434:16-1437:4). However, the Corporation remedied those leaks, cleaned the water, and replaced the floor within approximately one week of Plaintiff’s complaint (5/7 972:6-973:3, 973:22-974:1; 5/16 1434:16-1437:4).Plaintiff began, in late 2007, to see mold, “thick” and “fur”-like, present in various areas of the apartment (4/20 37:1-6, 74:12-15). In October 2008, Plaintiff commissioned environmental testing by Olmstead Environmental Services, Inc. (“Olmstead”) and Microecologies, Inc. (“Microecologies”), which reported toxic mold growth (4/20 142:10-13, 154:12-18, Pl Exhs 8-9, Defs Exh 5 6).The Corporation hired American Fire Restoration, Inc. (“American Fire”), who successfully remediated the mold condition (5/16 1396:23-1401:2 [Angrist]; Defs Exh 5
