Board of Managers of 100 Congress Condominium v. SDS Congress, LLC
Supreme Court, Appellate Division, First Department, July 5, 2017
This is a construction defects case that was brought by the unit owners against the sponsor of the building, as well as several design professionals.
Among other things, the plaintiff-board sought to recover damages for breach of contract and professional malpractice against the engineer-defendant, Kline Engineering, P.C. Kline moved to dismiss the complaint, and that motion was denied by the Supreme Court. Thereafter Kline Appealed.
The Appellate Division held that plaintiff’s claim for breach of contract against Kline should be sustained. The Court reasoned that plaintiff could be a successor-in-interest or a third-party beneficiary to an oral agreement between Kline and the sponsor. The Court found that even though the agreement was oral, the plaintiff could sustain a breach of contract claim against Kline, despite that the identity of the plaintiff was not contemplated at the time the oral agreement was made.
Ultimately, the Court held that the condominium unit owners may be considered successors-in-interest to a sponsor’s construction contracts with design professionals (even when those contracts are oral).
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