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STATEMENT OF JURISDICTION

     The District Court had jurisdiction under 15 U.S.C. § 3612 and 15 U.S.C. § 1367(a). This Court has jurisdiction under 28 U.S.C § 1291 in that this appeal is from final judgment granting summary judgement to plaintiff-appellee and additional counterclaim defendant-appellee. (A. 457) On November 2, 2001, defendant-appellant filed a timely Notice of Appeal. (A. 463)

ISSUES PRESENTED FOR REVIEW

     1.     When calculating the two year window for termination self-dealing contacts under Section 3607(b) of the Condominium and Cooperative Conversion and Abuse Relief Act (the "Abuse Relief Act"), which opens when the developer of the project owns twenty five percent or less of the cooperative units, should the Court consider combinations of units made subsequent to the initial formation of the defendant-appellant cooperative apartment corporation?

             The District Court answered in the affirmative.

     2.     As a matter of law, were cooperative apartment units ever combined?

             The District Court answered in the negative.

     3.     Were Sponsor-designated "Holders of Unsold Shares," who possessed all the rights and powers of the cooperative project sponsor itself, "developers" within the meaning of the Abuse Relief Act?

             The District Court answered in the negative.

     4.     Were all the other requirements of the Abuse Relief Act satisfied?

             The District Court never reached this issue.

STATEMENT OF THE CASE

     This appeal is from a decision and judgment of the United States District Court for the Southern District of New York (Gerard E. Lynch, J.) granting summary judgment in favor of the plaintiff-appellee, Bleecker Charles Company (the "Sponsor"), and additional counterclaim defendant appellee, Bleecker Parking Corp. (the "Garage Operator"). The appeal raises the question of whether a self-dealing lease (the "Lease") between the Sponsor and Defendant-Appellant, 350 Bleecker Street Apartment Corporation (the "Cooperative") for a parking garage (the "Garage") was properly terminated pursuant to the Abuse Relief Act.

     Under the Abuse Relief Act, such a termination is permitted only within a two year period. This two year window opens on the earlier of: (1) the date on which the "developer," as that term is defined in the Act, owned no more than twenty five percent of "the units in the conversion project," or (2) the date that the developer relinquishes "special developer control" over the cooperative association. 15 U.S.C. § 3607(b)(2). The District Court's decision in this case turned on a determination of the date on which the Sponsor ceased to own more than twenty five percent of the cooperative units.      The Sponsor brought this action for declaratory and injunctive relief, asking the District Court to hold the Cooperative's attempted termination of the Lease invalid. The Sponsor argued, among other things, that the attempt to terminate the lease on June 27, 2000, effective September 25, 2000 came too late because the Sponsors' share of the total units dropped below twenty five percent on October 16, 1997, more than two years prior to the attempted termination.

     The Cooperative counterclaimed, seeking, among other things, a declaration that its termination of the Lease was valid and timely, because the "developers" owned more than twenty five percent of the units until at least November 5, 1998. The Cooperative's count differed from that of the Sponsor for two reasons. First, the Sponsor argued that the total number of units in the cooperative project was irrevocably fixed by the number of units at the time of the original conversion of the premises to cooperative ownership. The Cooperative argued that the total number of units was subject to change if units had been combined subsequent to the conversion. The Cooperative also argued that the number of units owned by the "developer" must include units owned not only by the Sponsor, but by the other "Holders of Unsold Shares" who possessed all the rights and powers of the Sponsor.

     The Sponsor, joined by the Garage Operator, moved for summary judgment and the Cooperative cross-moved for the same relief. The District Court granted summary judgment to the Sponsor and the Garage Operator.     

STATEMENT OF FACTS

A.     The Formation of the Cooperative

     The facts relating to the initial formation of the Cooperative are not in dispute. The Sponsor converted the land and building located at 350 Bleecker Street, New York, New York (the "Premises") to cooperative ownership pursuant to an offering plan dated December 31, 1984, filed with the New York State Department of Law. (the "Plan"). The Plan was declared effective on April 5, 1985. Title to the Premises was transferred to the Cooperative at a closing held on or about July 31, 1985 (the "Closing"). (A. 78-9)

B.     The Master Commercial Lease

     At the Closing, the Sponsor caused the Cooperative to enter into the Lease. The Lease covered the two ground floor commercial spaces and the Garage. The term of the Lease was 75 years. (A. 97)

C.     The Combination of Cooperative Apartment Units

     At the time of the Closing, in addition to the Garage and the commercial space, the Premises contained 138 residential apartments, 137 of which were "cooperative units" as that term is defined in 15 U.S.C. § 3603(12). The remaining apartment, as to which no shares or proprietary lease were issued, was reserved for use by the building superintendent and is not a "cooperative unit." (A. 79)

     Subsequently, several persons purchased multiple units and combined them into single apartments. In each case the combination was approved by the Cooperative's Board of Directors as expressly required by Article 5, Section 4 of the Cooperative's By-laws ("Regrouping of Space"). That Article of the By-laws, drafted by the Sponsor, provides in relevant part that the Cooperative's Board of Directors, upon request of one or more cooperative unit owners: "may in its discretion at any time, permit such owner or owners . . . (1) to subdivide any apartment into two or more apartments: (2) to combined [sic] all or any portions of any such apartments into one or any desired number of apartments; . . ." (A. 194-95)

     The combination of apartments was reflected in various cooperative documents. First, the combination of six of the units into three units (6V/6W; 4A/4B; 3G/3H) is reflected on the Cooperative's Certificate of Occupancy. (A. 164)

     The remaining combinations were effected pursuant to New York City Local Law 77, which eliminated the requirement for an amendment of the Certificate of Occupancy when apartments were combined. See Department of Buildings, Departmental Memorandum dated February 24, 1969. (A. 204-05) The Sponsor's managing partner, Kenneth B. Newman, in his capacity as managing agent for the Cooperative, signed each of these applications on behalf of the Cooperative. He thereby indicated the Cooperative's approval to the permit applications as required by Department of Buildings regulations. The approvals were also in furtherance of the Cooperative's right to consent to any combination of units under the Cooperative's By-laws, and for this reason are also cooperative documents. (A. 330)

     Once the apartments were combined, either in the Certificate of Occupancy or under Local Law 77 procedures, it is undisputed that they were no longer separate legal dwelling units. Therefore, the combined units could no longer be used separately.

     The combination of apartments is also confirmed by the Cooperative's minutes (A. 361-75), which are corporate documents required to be kept by Section 624(a) of the New York Business Corporation Law. Until November 1999, the Cooperative's minutes were kept, and often prepared, by Kenneth B. Newman. Kenneth B. Newman, the Sponsor's sole principal, was the Cooperative's president and a member of its board of directors until 2000, was the Cooperative's managing agent until 2001, was the Cooperative transfer agent until 2000 and acted as the Board's principal legal advisor. (A. 329-30) The Board determined that after November 1999 the minutes would be prepared and kept by the Cooperative's Secretary.

     Previously, the Board had asked Mr. Newman to deliver to the Cooperative's Secretary all minutes previously kept by him. (A. 332) When the minutes were delivered, they were reviewed by the Board and found to be incomplete, with many minutes missing entirely. (A. 332) Although Mr. Newman denies responsibility, he does not dispute that the minutes are not complete. (A. 391)

     Even in their incomplete state, however, these cooperative documents confirm the combination of units reflected in the Cooperative's Certificates of Occupancy and the records of the Department of Buildings, as is shown in detail below.

     The combination of unit 6V with unit 6W is referred to in the Agenda for the February 22, 1989 meeting of the Board of Directors. (A. 361) Although the combination does not appear on the minutes for that date, it is the testimony of director Mark Lilien that the combination was approved by the Board at or about that time. (A. 333)

     The Sponsor cannot reasonably dispute that the Cooperative approved the combination of units 6V and 6W because the Cooperative's Certificate of Occupancy was amended to show that combination. (A. 164) That document expressly states that it is an "amended certificate of occupancy to remove non load bearing partition between Apt. 6V and 6W on the sixth floor to combine them as indicated on plans filed herewith." By the end of 1989, units 6V and 6W had been combined and were actually being used as a single dwelling unit. (A. 333)

     The meeting minutes for February 12, 1991 show that the Board granted its permission to combine units 4A and 4B into a single unit. (A. 362) This combination is also reflected on the Cooperative's Certificate of Occupancy dated March 26, 1996, which indicates a reduction in the number of legal dwelling units from 21 to 20 on the Cooperative's fourth floor. (A. 164) This combination is also shown on the records of the Department of Buildings as of March 10, 1995. (A. 321-26) By the end of March, 1995 these units had been combined and were being actually used as a single dwelling unit. (A. 333)

     Permission to combine units 3G and 3H into a single unit was also granted by the Board, as indicated in the meeting minutes for October 10, 1995. (A. 363) This combination is also reflected on the Cooperative's Certificate of Occupancy dated April 7, 2000 which indicates a reduction of legal dwelling units from 21 to 20 on the Cooperative's third floor. (A. 164) Approval of this combination is also shown on the records of the Department of Buildings as of January 12, 1996. (A. 321-26) By the end of January, 1996, these units were also being used as a single dwelling unit. (A. 333-34)

     The Board approved the purchase of apartment 3D and the adjoining hallway as indicated in the minutes of July 11, 1995. (A. 366) The owner's purpose was to use the hallway space to combine unit 3D with unit 3E that he already owned.

(A. 334) The purchase price for the hallway was approved by the Board on May 14, 1996. (A. 369) Shares of stock were then allocated to the hallway space which was incorporated into the combined apartment. (A. 153 (n. 1), 370)

     By the end of June, 1996, that same owner had also acquired unit 3F, the remaining unit located at the end of the portion of the hallway being purchased by him. At this time, the Board was asked to approve the unit owner's plan to combine all three units. This request was approved by the Board, and the unit owner obtained initial approval from the Department of Buildings for this combination on June 27, 1996. (A. 321-26)

     At about the time of these approvals, the unit owner removed the kitchen from both units 3F and 3D (making these apartments illegal for separate occupancy under New York City law (A. 205)) and began actually using the combined apartments as a single dwelling unit. (A. 334)

     On May 14, 1996 the Board also approved a request to purchase the hallway adjacent to the units 6C, 6D and 6E which were by then owned by a single unit owner. (A. 369) The purpose of this acquisition was to allow the owner to combine these units into a single dwelling unit. Department of Buildings approval was granted for this combination on April 23, 1997. By the end of that month the three units were being used as a single dwelling unit. (A. 335)

     The surviving minutes (as shown above, many of the minutes prepared and kept by Kenneth B. Newman were missing) do not reflect the Board's approval of the combination of units 6K and 6L. Director Mark Lilien testified, however, that the Board approved this combination sometime in the first quarter of 1998. (A. 335) Mr. Lilien's testimony is confirmed by a reference to the combination contained on the Board minutes of September 8, 1998 as follows: "Harvie, apts. 6L/6K. . . . The apartments were recently combined after the purchase of unit 6K. . . ." (A. 374) Department of Buildings approval for this combination is indicated as of April 10, 1998 (A. 321-26), and by the end of that month the apartments were being used as a single dwelling unit. (A. 335)      Permission to combine units 5W and 5X into a single unit was granted by the Board as indicated in the meeting minutes for January 20, 2000. (A. 375) Approval for this combination is also shown on the records of the Department of Buildings as of March 21, 2000. (A. 321-26) By the end of March, 2000, these units were also being used as a single dwelling unit. (A. 335) This is the last combination prior to the vote to terminate the Garage portion of the Master Lease. (A. 335)

     As explained above, the combination of units 6C, 6D and 6E into a single unit, and the combination of units 3D, 3E and 3F into a single unit was accomplished by the purchase and incorporation of the hallway abutting those apartments. When the hallways were purchased, the Cooperative issued additional stock to the respective unit owners. These shares were yet another cooperative document evidencing the fact that units had been combined.      Amendments to the Cooperative Offering Plan, prepared by the Sponsor pursuant to its disclosure obligations under General Business Law Article 23-A, the New York Blue Sky law, also show that cooperative units were combined: "Originally the building contained 137 apartments but certain apartments have since been combined." (A. 218)

     In addition to being combined legally, it is undisputed that the units were combined physically. The dates on which these physical combinations were completed were stipulated to by the parties. (A. 81, 159).

     In sum, contrary to the holding of the District Court, unit combinations are shown in numerous cooperative documents. As a result of these unit combinations, the Sponsor's holdings were not reduced to 25 per centum or less of the units in the Cooperative until November 5, 1998, when, upon sale of unit 1E, the Sponsor owned 32 of the then existing 130 cooperative units.

D.     The Holders of Unsold Shares

     Holders of "Unsold Shares" is a term of art used to designate persons, including the Sponsor, who are holding their units for investment and resale, rather than occupancy. Customarily, and as in this case, the Sponsor and the other Holders of Unsold Shares all possess the rights and powers of a developer under the Plan. (A. 236-39) In fact, the rights and powers of the Sponsor, and the other Holders of Unsold Shares are identical.

E.     The Sponsor's Designation of Holders of Unsold Shares

     Applicable New York State law and regulation require that all Holders of Unsold Shares, other than the Sponsor itself, be designated as such by the Sponsor. As stipulated by the parties, the owners of two units were so designated here. On or about December 1, 1988 the owners of unit 2L, Shirley and Anthony Lomanto were "designated a purchaser and holder of unsold shares" by Kenneth B. Newman, acting on behalf of the Sponsor. On or about July 31, 1985, the owner of unit 6A, Kathleen Giannetti, now known as Kathleen Iwanczuk, was similarly designated by Kenneth B. Newman, acting on behalf of the Sponsor. (A. 81-2, 165-66) Neither Ms. Lomanto nor Ms. Iwanczuk ever lived in the building.      In or about January 2000, the law firm of Schechter & Brucker, P.C. who was then assuming the duties of corporate transfer agent, inquired of the Sponsor concerning the current status of the owners of apartments 2L and 6A. The inquiry was made because the corporate records obtained by the Schechter firm indicated that these owners had not been paying sublet fees required to be paid by all owners other than Holders of Unsold Shares. (A. 174) In response, by letter dated January 21, 2000, Kenneth B. Newman confirmed that the owners of both units had been designated as Holders of Unsold Shares, who were exempt from such fees:

(A. 286-87)

     Neither the Lomantos nor Ms. Giannetti were strangers to the Sponsor. Shirley Lomanto was employed by Kenneth B. Newman, P.C. as Mr Newman's personal secretary for at least 15 years. (A. 82) Mr. Newman is the Sponsor's only principal. As described in the Plan, Mr. Newman is the "sole Managing Partner of Bleecker Charles Company. . . . He is an attorney admitted to the Bar of the State of New York, and represents the Sponsor as counsel [with respect to the Plan] and other matters. . . . The Selling Agent, Kenneth B. Newman Realty Corp., a domestic corporation, is controlled by Kenneth B. Newman." Kenneth B. Newman Realty Corp., also acted as the Cooperative's managing agent. (A. 243) Mr. Newman was also past a member of the Cooperative's Board of Directors and was its President. All of Mr. Newman's entities operated from a single office - the same office in which Ms. Lomanto is employed. (A. 174)      Ms. Lomanto worked closely with and assisted Mr. Newman with his administration of the Cooperative and the Plan from its inception. (A. 82) Simply put, as an employee she was under Mr. Newman's direct supervision and control. Moreover, as a loyal employee, whose financial well being was in Mr. Newman's hands, she and her husband could be expected to support the Sponsor's interest in the Lease which the Cooperative was seeking to terminate. This is more than simple theory. Ms. Lomanto and her husband, in fact, did not vote in favor of termination.

     Ms. Iwanczuk, nee Giannetti, also had close ties to the Sponsor. From November 1, 1969 to November 1, 1999, Ms. Iwanczuk was a full time employee of the law firm of Blumenthal & Lynne. As found by the District Court, Blumenthal & Lynne is the landlord for Mr. Newman's entities. Far more than that, however, overlooked by the District Court, Blumenthal & Lynne was the Sponsor's counsel in connection with the Plan. (A. 243)

     Although Ms. Iwanczuk was not under the direct control of the Sponsor, as an employee of the Sponsor's attorney, who shares office space with Mr. Newman, she too could be expected to support the Sponsor's position here. Like Ms. Lomanto, Ms. Iwanczuk did not vote in favor of the Lease termination.

F.     The Unsold Shareholder's Powers as a Developer

     The Sponsor and the persons designated by the Sponsor as Holders of Unsold Shares were granted significant rights because their status contemplated that they would be holding their units for investment and sale, not for occupancy. For that reason, as again overlooked by the District Court, they were granted the power to maintain sales offices in the building. (A. 237) They were also granted the power to make alterations and improvements to their apartments without the consent of the Cooperative. (A. 237)

     Along with the Sponsor, the Holders of Unsold Shares were also given significant powers over the governance of the Cooperative. These rights survived, and were independent of, any control of the Cooperative's Board of Directors. These powers include:

     These powers are precisely those recognized by the Second Circuit as indicia of "special developer control" within the meaning of the Abuse Relief Act. See Point V(B), below.

     In addition, unlike other unit owners, the Holders of Unsold Shares are permitted to sublet or assign their units without the permission of the Cooperative's Board of Directors, and are exempt from the payment of sublet or assignment fees. Proprietary Lease at 38(b) (A. 280)

     Thus, the two designated Holders of Unsold Shares were both vested by the Sponsor with extraordinary powers and relieved of significant financial obligations. Moreover, as successors to the Sponsor, the financial obligations of the Holders of Unsold Shares are guaranteed by the Sponsor. Plan p.43. (A. 236)

     Simply put, the Sponsor and the Holders of Unsold Share enjoy identical rights and powers and have a continuing financial relationship. As correctly stated by Mr. Newman, in his letter reaffirming the status of the Holders of Unsold Shares, they were "successors to the Sponsor's unsold shareholder status." This being so, the District Court's conclusion that they were "ordinary owners of apartments" is incorrect. G.     The Vote to Terminate the Garage Portion of the Master Lease.

     On June 1, 2000, the Board of Directors of the Cooperative sent a Notice to all shareholders of a meeting of unit owners to be held on June 27, 2000 to vote on the proposed termination of the Garage portion of the Master Lease. (A. 171)

     Neither the Abuse Relief Act, nor the New York State Business Corporation Law required that notice be given to the Sponsor, who was not permitted to vote at the meeting. (See Point V(C) below) Nevertheless, despite the Sponsor's statement to the contrary, a copy of the notice was sent to the Sponsor and to the other Holders of Unsold Shares. A contemporaneous record of the mailing of the Notice was made by Board member Mark Lilien. (A. 295)

     At the meeting held on June 27, 2000, the Garage Lease was terminated by a unanimous vote of all owners present at the meeting in person or by proxy. (A.83-4) Contrary to the holding of the District Court (A.448, n.9), the owner of each of the combined units was given only one vote confirming that they no longer possessed separate apartments. (A.311) The termination became effective 90 days later on September 29, 2000. 15 U.S.C. § 3607(d).

THE DECISION OF THE DISTRICT COURT

     The District Court (Gerard E. Lynch, J.) granted the Plaintiff's motion for summary judgment, and denied Defendants' cross-motion. The District Court assumed that, for purposes of its decision, the Lease meets the requirements of 15 U.S.C. § 3607(a) and is therefore subject to termination pursuant to the Act. (A. 442) The Court stated that under § 3607(a) the issue to be determined was the proper calculation of the 25 percent ownership of units by the developer which opens the two year "window" during which termination may occur. (A. 442) The Court held that the purported termination was invalid because the termination was made after the two year window closed.

     The Court accepted that the percentage of units owned by the developer could take into account unit combinations that had been made by the unit owners:

(A. 446, n.8)

     Moreover, the Court acknowledged that physical combinations of apartments had in fact occurred. The Court found that certain apartments "had been reconfigured so that what were formerly two or even three dwelling units now constitute (both de facto and for purposes of local zoning and building codes) a single apartment . . . ." (A. 443) The Court also stated that, in other cases, a "portion of a formerly common hallway was enclosed to become a part of a single large apartment . . . ." (A. 443) With regard to those apartments, the Court noted that the additional shares were issued to the owner of the newly combined unit. (A. 443)

     The Court found, however, that despite these legal and physical combinations, the number of cooperative units had not changed. The Court held that the number of units must be determined solely by reference to the "cooperative documents" as that term is used in the Abuse Relief Act §§ 3603(12) and 3603(13). The Court concluded that the only documents to be looked at were the unit owner's shares and proprietary leases, which did not reflect the combination of apartments. (A. 445-446) The Court summarized its thinking on p. 9 of its decision:

(A. 446)

     The second issue addressed by the District Court was the proper method for computation of the number of units owned by the "developer" as that term is defined in Section 3602(14) of the Abuse Relief Act. The number of developer owned units comprise the numerator of the fraction, which determines whether and when the developer owns 25 percent or less of the units in the Cooperative Project so as to trigger the commencement of the two year window period for termination. Specifically, the Court determined that two apartments owned by individuals having a relationship with the Sponsor who had been designated as Holders of "Unsold Shares," as that term is defined in the Offering Plan, could not be counted as units "owned by the developer" within the meaning of Section 3607(b).

     First the Court found that there could only be one "developer." The Court reasoned that, since the Act spoke of the "developer" in the singular, it precluded the possibility that there would be more than one developer. The Court also found that, in "ordinary English" only the Sponsor, who owned the building before conversion, submitted the offering plan to covert the building to cooperative ownership, and managed the process of selling cooperative units, acted as the developer of the subject project. (A. 449)

     The Court next rejected the Cooperative's argument that the Holders of Unsold Shares were "developers" within meaning Section 3603(14) of the Abuse Relief Act. Relying on this Court's recent holding in Darnet Realty Assoc. v. 136 East 56th Street Owners, Inc. 214 F.3d 79 (2d Cir. 2000), the Court found that the Holders of Unsold Shares were not "successors" to the original developer under Section 3607(B), because there was no evidence that they were controlled by the original developer, or were the original developer's alter ego, nor could they be expected for any other reason to share the original developer's interest in the self-dealing lease.

     Finally, the Court found that, whether or not they were successors to the original developer, the Holders of Unsold Shares did not qualify as developers themselves because they did not possess the requisite powers of special developer control of the Cooperative, as required by the Act. Specifically the Court found that the Holders of Unsold Shares did not share the "features associated with a 'developer' or Sponsor . . . , such as adding or withdrawing real estate from the cooperative, maintaining a sales office, and exercising easements to make improvements in the cooperative." (A. 450-53)

SUMMARY OF THE ARGUMENT

     It is respectfully submitted that the decision of the District Court was in error, both with respect to its conclusion that cooperative units had not been combined and in its conclusion that the Sponsor-designated Holders of Unsold Shares were not "developers." With respect to the combination of units, we respectfully submit that the Court was wrong to rely on clearly erroneous cooperative shares and proprietary leases, which bore no relation to corporate realities and which were contradicted by other cooperative documents.

     With respect to the Abuse Relief Act's definition of "developer," the Court's reliance on the use of that term in the singular is misplaced. Well established rules of statutory construction provide that words in the singular include the plural unless the context clearly indicates otherwise. Nor is there any indication that the drafters of the Abuse Relief Act intended to exclude from its scope situations in which several parties act as developers.

     The District Court also ignored the fact that the Holders of Unsold Shares are not ordinary apartment owners. Rather, Holders of Unsold Shares are: (1) the Sponsor itself, and (2) other persons expressly produced and designated by the Sponsor who purchase for investment and resale. The rights and powers of the Sponsor and other Holders of Unsold Shares are identical. Moreover, the Sponsor-designated Holders of Unsold Shares had a relationship with the Sponsor such that they could reasonably be expected to, and, in fact did, support the Sponsor's interest in the lease sought to be terminated by the Cooperative. In sum, the Sponsor-designated Holders of Unsold Shares enjoyed all the rights of the Sponsor, and had precisely the type of relationship with the Sponsor contemplated by the Abuse Relief Act in its definition of the term "developer."

     Finally, it is respectfully submitted that all remaining requirements of the Abuse Relief Act have been satisfied. Accordingly, the decision of the District Court should be reversed and summary judgment granted to the Cooperative.

ARGUMENT

POINT I

STANDARD OF REVIEW

     Grants of summary judgment are subject to de novo review by this Court. See, e.g., Burtnieks v. City of New York, 716 F.2d 982, 985 (2d Cir. 1983). A grant of summary judgment may not be sustained unless the moving party establishes that there is no genuine issue of material fact to be tried and that the moving party is therefore entitled to judgment as a matter of law. Azrielli v. Cohen Law Offices, 21 F.3d 512, 516 (2d Cir. 1994). A court faced with a summary judgment motion may not resolve disputed questions of fact, but may only determine whether there is any genuine issue for trial. Eastman Machine Co. v. United States, 841 F.2d 469, 473 (2d Cir. 1988). In other words, the court's task is limited to identifying factual disputes, not resolving them. In determining whether a triable issue exists, the court must resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. Azrielli, 21 F.3d at 517 (emphasis supplied) (collecting authorities); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (court must view the evidence in the light most favorable to the party opposing summary judgment); General Elec. Co. v. Joiner, 118 S. Ct. 512, 517 (1997) ("On a motion for summary judgment, disputed issues of fact are resolved against the moving party - here, petitioners"). It is respectfully submitted that the application of these principles here mandates that the judgment of the District Court be reversed.

POINT II

CALCULATION OF THE TWO YEAR WINDOW FOR
TERMINATION OF SELF-DEALING LEASES UNDER 15 U.S.C. § 3607(b)
MUST TAKE INTO ACCOUNT COMBINATIONS OF
UNITS MADE AFTER THE FORMATION OF THE COOPERATIVE

A.     The District Court Was Correct in Holding That the Sponsor's Ownership Interest
          Must Be Determined by Taking into Consideration All Combinations of Cooperative Units

     Section 3607(b)(2) of the Abuse Relief Act provides that any termination may occur only during the two-year period beginning on the date on which:

     As more fully discussed in Point V(B) below, the developers' powers of "special developer control" are ongoing. The District Court was therefore correct in resting its determination of the two year window on date on which the developers owned "25 per centum or less of the units in the conversion project." We also respectfully submit that the District Court was correct in finding that nothing in the policies or language of the Abuse Relief Act limits the Court to consideration only of the number of units existing at the time the cooperative was formed, without regard to later combinations.

     First, the proposition that the Sponsor is entitled to count units that have been extinguished through combinations is directly contrary to the policy that the two year termination window will not open until control of the Cooperative by the Sponsor has ended:

Darnet Realty Associates, LLC v. 136 East 56th Street Owners, Inc., 153 F.3d 21, 25 (2d Cir. 1998) (emphasis added).

     Continuing to count units that have been combined and which, therefore, no longer exist, is contrary to Abuse Relief Acts' premise that practical control by the Sponsor will not end until 75 percent of the units have independent owners. Self-evidently, when units are combined, the number of unit owners present to oppose the Sponsor's control (the "force of numbers" referred to by the Court) decreases. By counting units that no longer exist when determining the Sponsor's 25 per centum ownership, the Sponsor seeks to make it appear that its control is diminishing in like proportion when, in fact, it is not. It makes no sense in policy terms to count phantom units that do not exist as though they still had separate owners opposed to the Sponsor's "working control."

     Guidance is also provided by the language of Section 3603(12) of the Abuse Relief Act which provides:

(Emphasis added.)

     As in Section 3603(7), this section uses the present tense when referring to units. It also looks to the "cooperative documents" for the definition of a cooperative unit. Here, the cooperative documents expressly specify that the number of units can change after the initial conversion by combination or subdivision. Article 5, Section 4 of the Cooperative's By-laws provides in relevant part that the Cooperative's Board of Directors, upon request of one or more cooperative unit owners: "may in its discretion at any time, permit such owner or owners . . . (1) to subdivide any apartment into two or more apartments: (2) to combined [sic] all or any portions of any such apartments into one or any desired number of apartments; . . ." (A. 194) This provision of the By-laws shows that there is no magic to determining when units have been combined. In order to combine units, unit owners other than the Holders of Unsold Shares require Board of Directors approval. Once approval is granted, as it was in all cases here, the owner's right to exclusive possession is established and the combination is complete. Thus, the language of Section 3603(12) is consistent with the policy objectives of the Abuse Relief Act described above, that the number of units be determined, as combined, after the conversion. Accordingly, the District Court was correct in concluding that combinations of cooperative units should be considered in determining the two year termination window.

     The District Court held, however, that, as a matter of law, no cooperative units had ever been combined. In reaching this conclusion, the Court found that the number of units to be counted in determining the Sponsor's percentage of ownership must be determined by reference to the "cooperative documents." The only documents the Court considered in this regard were the Cooperative's shares and proprietary leases.

     Contrary to the finding of the District Court, these documents, all produced or implemented by Cooperative corporate action, must be characterized as "cooperative documents" within the meaning of the Abuse Relief Act. All of these documents indicate that cooperative units had been combined. Hence, the District Court's finding that no cooperative documents showed combinations of units is contradicted by the record.

C.     It Was Error for the District Court to Look Only to the Shares
         Cooperative's and Proprietary Leases in Determining Unit Combinations

     The District Court's conclusion that the shares and proprietary leases alone were dispositive of unit ownership was also error. In this regard, the District Court was incorrect when it posited, that: "as a legal matter, the owner (of the combined space) . . . held two separate assets, which could be dealt with (e.g., refinanced) separately." (A. 446)

     First, under New York State law, corporate records such as stock certificates or proprietary leases are not conclusive as to ownership and all other competent evidence must be considered. See, e.g., Matter of Steward, 229 A.D.2d 500, 646 N.Y.S.2d 135 (2d Dep't 1996) ("Although the books of a corporation are prima facie evidence of stock ownership, they are not conclusive, and testimony may be taken to aid in the determination as to who is the owner of the stock."), citing, Matter of Ringler & Co., 204 N.Y. 30, 97 N. E. 593 (1912); Kyle v Kyle, 111 A.D.2d 537, 489 N.Y.S.2d 409 (3d Dep't 1985); Matter of Porco, 32 A.D.2d 983, 302 N.Y.S.2d 219 (3d Dep't 1969). This rule of law applies with equal force to the Cooperative, which is a corporation organized and existing under the New York Business Corporation Law.

     As is shown above, there is substantial evidence, in the form of other cooperative documents, that the formerly separate units had been combined. In fact, that evidence is overwhelming. It is respectfully submitted that no reasonable finder of fact could conclude that the units had not been combined, or that the failure to issue new shares and leases was anything other than administrative error. Even more so since responsibility for the error in failing to conform the stock and leases to the facts rests directly on Sponsor. It was the Sponsor's sole principal who had primary responsibility for proper corporate record keeping in his capacities as president, director, managing agent, transfer agent and Cooperative attorney. The Sponsor should not be allowed to use its own misfeasance in this regard to circumvent the protections afforded to the resident unit owners by the Abuse Relief Act.

     The District Court was also in error when it concluded that, once combined, the formerly separate units could still be used separately because new shares and proprietary leases had not been issued. First, such a use would be contrary to the Cooperative's By-laws. Pursuant to Article V, Section 4 of the By-laws. (A. 194-95) Once an apartment has been combined pursuant to the consent of the Board of Directors, the units could not be separately utilized or transferred without further corporate action authorizing separation of the units.

     Moreover, the individual units, once combined, lost their character as separate legal dwelling units under law. This was shown by the Cooperative's Certificate of Occupancy (A. 164), and records of the New York City Department of Buildings showing the combinations of units under New York City local law 77 (A. 321-26). Thus, once combined, the units could not be used separately without violating local law.

     The units could not be used separately from a practical point of view as well. First, it would be impossible to sell or otherwise dispose of the combined space in pieces. No sane buyer would purchase, for example, a bedroom, bathroom or a portion of a living room without the remainder of the apartment.

     For the same reason, the District Court's supposition that the combined units could be refinanced separately is not supported by the record. Although neither party addressed that issue directly below, it defies logic and common sense that any reasonable lender would accept only an apartment fragment, rather than a complete legal dwelling unit, as collateral.

     The Cooperative is mindful that the District Court's reliance on only the shares and leases was motivated by a desire to avoid "undesirable fact-finding difficulties." (A. 446-47, n. 8) The need for fact finding, however, does not justify the District Court's reliance upon clearly erroneous shares and leases that do not conform to corporate realities. Moreover, the fact finding needed here is no more difficult than that required in any dispute over corporate ownership, where the corporate records are incomplete or inaccurate. Any small burden that such fact finding may place on the Court is more than justified by the need to effectuate the consumer protection purposes of the Abuse Relief Act.

D.     The Sponsor May Not Rely on its Own Failure to Obey the Requirements of
         Article 23-A of the New York General Business Law or Its Own Inaccurate Record Keeping

     In arguing to the District Court, and as we expect that it will argue here, the Sponsor contended that the Court could not consider specific unit combinations not disclosed in the Plan. (As we have already shown, amendments to the Plan did mention generally that units had been combined.) The Sponsor contended that, because it had the discretion to determine the scope of the cooperative project, it likewise had the sole authority to fix the number of units. Since the precise number of units combinations were not set forth in the Plan, the Sponsor argued, no such combinations may be said to exist.

     The Sponsor's argument turns the disclosure requirement of the New York State Securities Law on its head. Article 23-A of the New York General Business Law (the "Martin Act") governs the offering and sale of securities in and from New York State. Section 352-e of that Article requires sponsors of real estate syndication offerings, including housing cooperatives, to file an offering plan prior to selling or offering for sale real estate securities. See, General Business Law § 352-e[1][b] [6]. That statute provides that the offering plan must include the detailed terms of the transaction "and such additional information as the attorney general may prescribe in rules and regulations." As described by the Appellate Division of the Supreme Court, First Department:

Phoenix Tenants Ass'n v. 6465 Realty Co., 119 A.D.2d 427, 429, 500 N.Y.S.2d 657, 659 (1st Dep't 1986) (holding that required disclosure of the Abuse Relief Act was adequately made). (We note that no such disclosures regarding the Abuse Relief Act were ever made by the Sponsor in this matter as required by law.)

     Simply put, the Martin Act imposes upon a cooperative sponsor the obligation to make full and complete disclosures of all material facts in the offering plan. Self-evidently, the law does not grant the Sponsor the right to conceal material facts, and, by so doing, claim that such facts do not exist. To the extent that the facts were material, the Sponsor had the obligation to disclose the combinations of apartments shown in the Cooperative's records and those of the New York City Department of Buildings. Even the Sponsor has not argued that he is exempt from the provisions of the Abuse Relief Act due to his failure to disclose its existence. Similarly, the Sponsor may not bootstrap its failure to make disclosure of the details of unit combinations into a purported right to ignore such combinations and fix the Cooperative's units at an artificial number unrelated to the truth.

     Further, the Sponsor should not be able to avoid the reach of the Abuse Relief Act because its Managing Partner, in his capacities as managing agent, transfer agent, board president and sometimes attorney of the Cooperative, failed to update the corporate stock records to conform to the unit combinations that had indisputably occurred. Mr. Newman, as managing agent was responsible for the maintenance of the other corporate records. See Cooperative's Managing Agent Contract, (m) and (r) (A. 353, 355) As transfer agent, he was responsible for implementing the transfer of Cooperative units. As principal of the Sponsor, Mr. Newman was responsible for the making the disclosures required by law in the form of a Cooperative Offering Plan with periodic amendments to insure continuing completeness and accuracy of the disclosures. As attorney, Mr. Newman would frequently provide the Board of Directors with legal advice concerning corporate affairs. (A. 329) If the stock records should have been corrected, Mr. Newman had the responsibility to do so and his failure in this regard was a breach of both his contractual and fiduciary duties. Such misfeasance is no evidence of any intent that the units in question were not in fact combined.

     The Sponsor also argued below that the combination of units should be ignored, because the Cooperative records lack precision as to the exact date the combinations occurred. Apart from the fact that any flaws in the corporate records are the result of the Sponsor's misfeasance, the alleged "confusion" in the records concerning the precise date of unit combinations does not change the result. First, there is sufficient evidence to show the month in which each owner of a combined unit actually occupied that unit as a single dwelling unit, after receiving permission from the Board to combine the unit. Using these dates, the window for termination of the Garage portion of the Master Lease would not open until November 5, 1998 at the earliest. The same result would follow if the Court looked to the date the Cooperative Board approved the combinations as reflected in the Board minutes, or the date permits were issued for the combinations by the New York City Department of Buildings.

     In this regard, the Sponsor's argument to the District Court that the dates of unit combinations should be determined only as of the time that any construction was completed must be rejected. Construction can be ongoing where the owner redecorates or renovates, even in a single unit that was never combined. The critical date, here, is not the time that an owner may have applied the last coat of paint or installed a more expensive sink. Rather the key date is that by which the unit owner was given the right to use the apartment as a single dwelling unit. That date should most properly be consider the date that the Cooperative Board granted permission to combine the apartments pursuant to the Cooperative By-laws. Certainly, that date can be no later than the date the owner actually used and occupied the combined unit with the Cooperative's permission.

POINT III

THE UNITS OWNED BY THE PERSONS DESIGNATED AS
HOLDERS OF UNSOLD SHARES MUST BE COUNTED WHEN
DETERMINING THE PERCENTAGE OF DEVELOPER OWNERSHIP

A.     The Persons designated by the Sponsor as Holders of "Unsold
         Shares" Are "Developers" Within the Meaning of the Abuse Relief Act

     The "25 per centum" trigger of § 3607(b)(2) refers to ownership not by the Sponsor alone but by all "developers." Section 3603(14) defines "developer" as follows:

     It is respectfully submitted that, contrary to the holding of the District Court, the unit owners designated by the Sponsor as Holders of Unsold Shares are "developers" within the meaning of section 3603(14)(B). Two prior cases have considered the issue of whether Holders of Unsold Shares other than the Sponsor may be considered "successors" within the meaning of the Act. The issue was first addressed in 305 East 40th Garage Corp. v. 305 East 40th Owners Corp. 833 F. Supp. 991 (S.D.N.Y. 1993). It was held that the Holders of Unsold Shares were successors within the meaning of the Abuse Relief Act. The Court noted that, as in the case here, the Holders of Unsold Shares had been produced by the Sponsor, and the Sponsor had guaranteed their obligations. The Court also observed that the parties in question had not voted in favor of termination as would be expected of a party independent of the sponsor: "Indeed, the stranger should be expected to favor termination of a contract that robs the owners' association of the fullest exploitation of its assets." Id. at 994.

     Influenced by these factors the Court gave a broad interpretation to the term "successor":

     The same issue was subsequently presented in 136 East 56th Street Owners, Inc. v. Darnet Realty Associates, 1999 WL 47328 (S.D.N.Y.), but on different facts. In that case, the holder of Unsold Shares had not been produced by the Sponsor, the Sponsor had not guaranteed the holder's financial obligations, and the holder had voted in favor of the garage lease termination. While the Darnet Court gave recognition to the reasoning in 305 East 40th Garage Corp. (Id. at n. 11), it concluded that the facts of the case mandated a more narrow test for "successors":

* * *

136 East 56th Street Owners, Inc. 1999 WL 47328 at 6-7.

     Applying this test, the Court found that the holder of Unsold Shares did not qualify as a "successor." In reaching this conclusion, the Court found it significant that, unlike the case here, the holder of Unsold Shares had not voted in favor of the lease termination:      

     Unlike the Holders of Unsold shares in Darnet, the Holders of Unsold Shares in this case fall squarely within the definition of "successor" set forth in that case. Ms. Lomanto can certainly be "said to be controlled" by the Sponsor and "can be expected for other reasons to share the Sponsor's interest in the lease." First, Ms. Lomanto was the personal secretary of Kenneth B. Newman, the Sponsor's principal for a period of not less than fifteen years. As such, she was under his direct supervision and control in the workplace. Moreover, she was dependent upon Mr. Newman for her livelihood. It is difficult to conceive of a more clear cut case of control.

     Aside from control, there are other reasons why Ms. Lomanto could be expected to share the Sponsor's interest in the subject lease. First, Ms. Lomanto was produced by the Sponsor and designated by it as a holder of Unsold Shares, as was the case in 305 East 40th Garage Corp., but not in Darnet. As a holder of Unsold Shares, Ms. Lomanto was given extraordinary powers over the governance of the Cooperative as well as numerous rights, exemptions and financial benefits not available to other shareholders. All of these rights and powers were given to Ms. Lomanto (and later shared by her husband) without tangible consideration. (At this stage in the litigation the Cooperative does not know what price was actual paid by the Holders of Unsold Shares for their units. There is no indication, however, that they paid any additional consideration to obtain the powers and benefits given to them as Holders of Unsold Shares.) In fact, the Sponsor incurred an obligation in order to confer these benefits, namely the commitment to guarantee Ms. Lomanto's obligation to pay maintenance charges and assessments. (A. 236) In view of these rights and powers, Ms. Lomanto, was far more than an "ordinary" owner of an apartment as she was characterized by the District Court.

     Given the control relationship between the Sponsor and Ms. Lomanto, and the many benefits conferred upon her by the Sponsor, it can not only be expected that she would share the Sponsor's interest in the Lease, it would be extraordinary if she did not do so. This is not speculation, but fact. Predictably, Ms. Lomanto and her husband did not vote in favor of termination.

     All of the above factors apply equally to Ms. Iwanczuk, except that the Sponsor's control over her was one step removed. Rather than being employed directly by the Sponsor's principal, she was employed by the Sponsor's attorney who works from the same office as the Sponsor. She also possessed all of the extraordinary rights, powers and benefits possessed by Ms. Lomanto as a holder of Unsold Shares. Thus Ms. Iwanczuk could also be expected to share the Sponsor's interest in maintaining the Lease. Finally, like Ms. Lomanto, this is precisely what Ms. Iwanczuk did, by not voting in favor of termination.

     Given the substantial and multifaceted relationship between the Sponsor and its designated Holders of Unsold Shares, there was more than sufficient identity of interest between them to satisfy the standard for a "successor" set by the District Court and affirmed by this Court in Darnet. To hold to the contrary would violate the policy of the Abuse Relief Act, enunciated by this Court, that the two year termination window should not open until the Sponsor "no longer had the ability to control the owners' organization through the statutory concept of special developer control or through what could constitute practical working control via sheer force of numbers." Darnet Realty Associates, LLC, 153 F.3d at 25. For this reason, the twenty five percent "developer" ownership interest must include not only units owned by the Sponsor itself, but also units owned by persons who are in the Sponsor's pocket.

     The many powers given to the Sponsor-designated Holders of Unsold Shares also satisfies the requirement of Section 3603(14)(B) that "successors" have developer powers. In this regard we note that the statute does not require that the successor have all the powers mentioned, but only some of them. Section 3603(14)(B) provides in relevant part that a "developer" is: "any successor . . . who has the authority to exercise special developer control in the project including the right to: add, convert, or withdraw real estate from the cooperative or condominium project, and maintain sales offices, management offices and rental units; exercise easements through common elements for the purpose of making improvements within the cooperative or condominium; or exercise control of the owners' association. (Emphasis added.) Here, where the Sponsor-designated Holders of Unsold Shares had the very same rights and powers of the Sponsor itself, the requirement of special developer control is certainly satisfied.

     Additionally, the Sponsor's unilateral act of selling shares to persons under its control, who can be expected to support its position, should not be allowed to have the effect of circumventing the statute. Devices, having this effect have been rejected by the courts irrespective of their bona fides. See, e.g., Darnet Realty Associates LLC v. 136 East 56th Street Owners, Inc., 214 F.3d 79, 85-86 (2d Cir. 2000) (rejecting the Sponsor's claim that opening the garage to the public destroys its status as property serving the cooperative unit owners); 2 Tudor City Place Associates v. 2 Tudor City Tenants Corp., 924 F.2d 1247 (2d Cir. 1990) and Penny Lane Owners Corp. v. Contour Development Co., Ltd., 2000 WL 178189 (S.D.N.Y.) (holding that Sponsors may not avoid their obligations under the Abuse Relief Act by assigning a garage lease to third parties).

B.     The District Court Was in Error in Finding That, Under the
         Abuse Relief Act, There May Be Only One "Developer"    

     The District Court's finding that neither the Lomantos and the Iwanczuks could be a "developer" within the meaning of the Abuse Relief Act fails as a matter of simple statutory construction. In this regard, the District Court concluded that there could be only one developer because, when referring to the "developer," Section 3607(b)(2) of the Abuse Relief Act speaks only in the singular. 1 U.S.C. § 1 provides in relevant part, however:

* * *

     There is nothing in context of the Abuse Relief Act to indicate that Congress intended to exclude from the reach of the Abuse Relief Act those situations where more than one party acts as a holder of Unsold Shares. On the contrary, the term "developer" is defined as including "any" person who offers to sell or sells his interest in a cooperative or condominium unit not previously conveyed, and "any" successor to such person with the requisite powers of special developer control. 15 U.S.C. 3603(14). The word "any" means one or more. Webster's Ninth New Collegiate Dictionary, Merriam Webster Inc. [1989], page 93.

C.     The Holders of Unsold Shares Should Not Be Able to Avoid Their Obligations as
         "Developers" Because of Their Own Violations of State Securities Law and Regulations

     The Sponsor argued to the District Court, and can again be expected to argue here, that even if the Holders of Unsold Shares were "developers" initially, they lost their status as Holders of Unsold Shares because of their own failure to register as broker dealers or file Plan amendments as required by Martin Act Regulations. See 13 N.Y.C.R.R. § 18.3(w)(10) and (11).

     It may well be true that the Cooperative or the New York State Attorney General could bring an action to void the powers of the Holders of Unsold Shares because of their violations of Martin Act requirements. No such action has been brought. Nor is there is any law or policy which would allow the Holders of Unsold Shares to use their own violations of law to deprive the cooperative unit owners of their remedies under the Abuse Relief Act.

POINT IV

EVEN IF THE COURT DOES NOT ACCEPT ALL OF THE UNIT
COMBINATIONS OR THAT BOTH OF THE HOLDERS OF UNSOLD
SHARES ARE DEVELOPERS, THE TERMINATION WAS TIMELY

     If the Court accepts all of the unit combinations, the termination of the Lease, which was effective on September 25, 2000, was timely. As a result of these combinations, the Sponsor's holdings were not reduced to twenty five percent until November 5, 1998 when, upon the sale of unit 1E, the Sponsor owned 32 of the then existing 130 cooperative units (24.7%).      If the Court accepts that both the Iwanczuks and the Lomantos are "developers," then the termination of the Lease was timely. Under that scenario, the twenty five percent Sponsor ownership level was not reached until the same date, when the Sponsor plus the two Holders of Unsold Shares owned 34 of the original 137 cooperative units (24.8%)

     The same result can be reached, however, counting only some of the unit combinations along with only one of the Holders of Unsold Shares. For example, if the Court should rely only on the earliest two combinations shown in the Cooperative's Certificate of Occupancy (four units into two units), and only Mr. Newman's long time personal secretary as a "developer," then the twenty five percent ownership level was not reached until November 5, 1998, when the Sponsor and the one holder of Unsold Shares together owned 33 of 135 cooperative units (24.5%). The termination would also be timely if the Court recognized only the combinations where additional shares were issued for the incorporated hallway space (six into two units), and only Ms. Lomanto as a "developer." Under this scenario, the twenty five percent developer ownership level was not reached until November 5, 1998, when the Sponsor and the one holder of Unsold Shares owned a total of 33 of 133 units (24.9%). These possibilities provide additional grounds to reverse the judgment of the District Court.

POINT V

THE REMAINING REQUIREMENTS OF THE
ABUSE RELIEF ACT HAVE BEEN SATISFIED

     The Sponsor does not dispute that the Master Lease was entered into after October 8, 1980, is between such unit owners or such association and the developer and is for a period of more than three years. We turn then to the Abuse Relief Act's remaining requirements.

A.     The Garage Is Property Serving the Cooperative Unit Owners

     The Sponsor also suggests that there is an issue of fact as to whether the Garage is "property serving the . . . cooperative unit owners" as required by 15 U.S.C. § 3607(a)(1) because the Garage is open to the public, and does not rent a majority of spaces to the unit owners. This argument has been expressly rejected by this Court:

* * *

     As we have shown, the Lomantos and the Iwanczuks were given significant control over the governance of the Cooperative. The Sponsor argued before the District Court that the window period of Section 3607(b) opened in July 1988 when an independent board of directors was first elected. This argument has also been rejected by this Court.

* * *

Darnet Realty Associates LLC v. 136 East 56th Street Owners, Inc. 214 F.3d 79, 83 (2d Cir. 2000); see also, Darnet Realty Assocs., LLC v. 136 East 56th St. Owners, Inc., 153 F.3d 21, 27 (2d Cir.1998).

     Additional authority that special developer control is not limited to voting control of the Board of Directors is found in the Southern District's decision in Coliseum Park Apartments Co. v. Coliseum Tenants Corp., 742 F. Supp. 128, 136 (S.D.N.Y. 1990):

(Emphasis added.)

     As discussed above, the powers reserved to the Sponsor and other Holders of Unsold Shares include veto power over amendments to the by-laws, hiring of employees and expenditures of the Cooperative. These powers, which allowed the Sponsor to "exercise substantial control over the business affairs of the Association," are nearly identical to those found to constitute "special developer control" in Darnet and Coliseum Park. Therefore, any argument that special developer ended when the Sponsor lost control of the board must be rejected.

C.     Notice to the Sponsor of the Meeting at Which the Lease Is Terminated Is Not Required

(Emphasis added.)

          The same result was reached in the two New York State cases that have examined the issue. In Talia Management Co. v. 1360 Ocean Parkway Owners Corp., 10/3/94 NYLJ 30, (col. 3) (Sup. Ct. Kings Co.) the Court held:

(citations omitted.); accord, Talia Management Co. v. 200 Corbin Owners Corp., 12/13/95 NYLJ 29, (col. 1) (Sup. Ct. Kings Co. 1995).

     In sum, the cases are uniform that notice to the Sponsor, who is not permitted to take part in the proceedings, is not required.

CONCLUSION

For the foregoing reasons it is respectfully requested that the Judgment of the District Court be reversed and Plaintiff's and Additional Counterclaim Defendant's motion for summary judgment be denied, and that Defendant's cross-motion for summary judgment be granted, or, in the alternative, that the case be remanded for appropriate findings of fact.

Dated: New York, New York
           February 21, 2002

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